ADLPartner 2013 annual report 0

Transcription

1 Disclaimer: This document is a free translation and an extract of the original French Financial Annual Report 2013 and of the French consolidated financial statements. Only the French version is legally binding. A copy of the whole Annual Report 2013 (in French) or of the consolidated financial statements (in French) may be obtained inter alia either on the ADLPartner s websitee ( or on demand calling +33(0) , or by relations.investisseurs@adlpartner.fr. ADLPartner 2013 annual report 0

2 MESSAGE FROM THE CHAIRMAN Dear Shareholders, In a relatively sluggish market environment, with volatile consumption trends, ADLPartner has continued to optimize its prospecting campaigns across its various product lines, while supporting the development of its new digital digi marketing activities. Our core business activities have achieved solid performances, thanks to our ongoing commercial prioritization initiatives. The development of new partnerships is also being facilitated by continuing to improve our marketing mixes, mixes strengthening our various areas of expertise and expanding our offers to include new media. Alongside this, ADLPartner has continued moving forward with the diversification of its business into digital marketing, notably drawing on its online marketing capabilities. apabilities. Positioned on growing sectors with different risk profiles, these new activities are opening up synergies and will enable us to achieve lasting improvements in our value creation potential. Overall, while the business volume is down slightly, contracting 2.8% to million, the results for the year are satisfactory. In particular, effective control over our costs has made it possible to improve our operating margin, despite the costs of the new activities. Our consolidated net profit came to t 7.3 million in 2013, compared with 5.7 million for The relevance of our strategy is underpinned by our sound balance sheet, with 26.5 million in cash at 31 December Our robust fundamentals are also reflected in the positive performance achieved achieved in terms of our net asset value (group share)1, climbing 5.2% to million. In view of these performances, the Management Board has decided to submit a dividend of 0.73 per share for approval by shareholders at the General Meeting on 13 June We are continuing to move forward with our value creation strategy, focusing on generating value through our know-how know how on new media. The actions taken are making it possible to further strengthen our positions on our longstanding business lines, while also supporting the development of new growth drivers in digital marketing, in synergy with ADLPartner s know-how know and assets. Jean-Marie Vigneron Chairman of the Management Board 1 I would like to thank all our partners and our shareholders for their confidence, trust and loyalty. Calculated based on shareholders' equity and the present value of the active open-ended ended subscription portfolio annual report ADLPartner

3 2013 KEY FIGURES ( 000,000) GROSS SALES VOLUME SALES O OPERATING INCOME NET INCOME (GROUP SHARE) PORTFOLIO VALUE N NET ASSET VALUE (GROUP SHARE) GROSS SALES VOLUME BREAKDOWN by product type by geographic region Open-ended subscription Fixed-term subscription Books - Merchandise- Audio - Video Other France Spain GROSS SALES VOLUME AND NET SALES The gross sales volume represents the value of subscriptions and other products sold, while sales (which are determined on the basis of the relevant professional status for subscription sales) only include the amounts of revenue paid by magazine publishers. For subscription sales, sales thus actually correspond to a gross margin, since the cost of magazines sold is deducted from the amount of sales recorded. ADLPartner 2013 annual report 2

4 STRONG VALU UE-ADDED MARKETING EXPERTISE A leading player for relational marketing, ADLPartner designs, markets and implements customer recruitment, management and retention services on its own behalf or on behalf of its major partners. Over more than 40 years, ADLPartnerr has developed its unique expertise, built around promotional marketing and press subscriptions. Its marketing engineering knowbeing developed how and expertise are continuously and enhanced, reflected in the wide range of products and services offered today. On its own behalf or that of its partners, the group develops high value-added services tailored to the various distribution channels (mail, inserts, direct sales, telemarketing, internet, social networks, etc.). Managing and building loyalty among retail customers With extensive customer bases, ADLPartner's partner brands are able to count on the group's marketing expertise to devise and implement innovative recruitment, management and loyalty-building operations. Its bespoke and integrated customer relations solutions make it possible to enhance the offers of partner brands, while strengthening their communication through operations delivering high returns. They help create value by building more in-depth knowledge and a finer-grained qualification of their customers in particular through the marketing and CRM data generated, compiled and analyzed by ADLPartner. Recruiting magazine press subscribers ADLPartner builds its business around close ties with the leading publishers for press and cultural products. Its press experience and its expertise in various promotional techniques give it a key role today in the recruitment of new subscribers for magazine press publishers. With this in mind, ADLPartner is constantly developing new solutions to support their distribution. Wide range of offers ADLPartner s business can be broken down into three categories of offers: Fixed-term subscriptions The Group s historical business, with fixed-term subscriptions distributed under the France Abonnements, France Abonnements Entreprises and OFUP brands, offers a wide range of magazines and newspapers at significantly discounted prices, for a fixed period, generally 12 months annual report ADLPartner

5 Open-ended subscriptions Based primarily on partnerships, recruitments for open-ended subscriptions are supported by a framework for direct debits on set schedules, with each subscription tacitly renewed each month. ADLPartner draws on its outstanding direct marketing expertise, geared to all distribution channels, to manage and build loyalty among its partners customer lists. This range makes it possible to benefit from major promotional offers for subscriptions, as well as opportunities to take part in exclusive prize draws. Books, merchandise, audio and video This is based on a distance selling service for cultural products (books, audio, video) and practical items focused on health, wellbeing and leisure. Integrated expertise across the marketing value chain ADLPartner has expertise across the entire marketing value chain, from the creation of materials on all channels through to the management of customer contacts and orders. ADLPartner s team of experts overseee and manage full programs from building loyalty to distance selling, e-commerce, subscriptions, customer recruitment and coordination, combining first-class industrial and technological capabilities with a demanding management model, rigorous cost management, a quality culture and a strong level of responsiveness, in order to ensure the total efficiency and effectiveness of marketing techniques. ADLPartner deploys its technologies across all offline and online channels (mail, inserts, direct sales, telemarketing, internet, etc.). While further strengthening the appeal of the offers, this multichannel presence contributes towards improving the Group s commercial performances and expanding the range of partnerhips. Trust-based relationship with well-known partner brands ADLPartner 2013 annual report 4

6 GENERATING VALUE THROUGH KNOW-HOW To support its growth and profitability, ADLPartner is rolling out a strategy to expand and create value through its know-how. The actions taken are making it possible to further strengthen its positions on its longstanding business lines, while also supporting the development of new value-creating business models in new high-growth markets. Marketing businesses are constantly changing and evolving. To maintain its leading-edge capabilities, ADLPartner is constantly perfecting and enhancing its expertise in order to deliver effective solutions for businesses looking to optimize their customer relations, and in this way meet the challenges associated with conquering, retaining and building value through customer files. Further strengthening core business quality ADLPartner harnesses its marketing know-how to offer strong value-added solutions, benefiting from the effective fit between its distribution channels. These services and solutions are renowned for their quality and effective commercial results, supporting the development and strengthening of partnerships. This commitment to quality is underpinned by work to make the offers even more appealing, while extending them to include new media. As part of its investments, ADLPartner is therefore maintaining a major focus on enhancing its sales techniques and adapting them to new technologies. With this in mind, ADLPartner is diversifying its services, by increasingly developing innovative services for its partners factoring in the growingg use of internet media. Against a backdrop of changes on the press market, ADLPartner also aims to offer publishers more solutions to support their distributions. Continuing to enhance marketing mixes In addition to commercial actions based on mailings and inserts, ADLPartner has been stepping up prospecting on new media for several years. These developments are reflected in more diverse recruitment methods, particularly in terms of website management and specific content geared to target customer segments. They are supported by new marketing mixes and new customer and prospect canvassing techniques. ADLPartner is developing its offers and services while looking into and testing out opportunities to capitalize on its expertise with new channels, new customers and new products. ADLPartner is promoting online sales on the various partners' ad hoc sites which are managed by the Group, as well as on its own platforms. Working in this way to fine-tune marketing techniques helps make it possible to achieve lasting optimizations for multichannel campaigns. Sound fundamentals Leading player for relational marketing Quality profile and customer bases Segmented print bases Growing bases for opt-in profiles Close ties with leading publishers Recurrent subscription portfolio Sound financial foundations annual report ADLPartner

7 Developing digital marketing know-how To further strengthen the foundations for its future development, ADLPartner is focusing part of its actions on the development of new sources of growth in digital marketing. With different risk profiles, these new activities are opening up synergies with the long-standinvalue. business, while further strengthening the potential for creating More specifically, this business diversification strategy is harnessing the Group's know-how for third parties in connection with ADLP Digital. This is reflected in a wide range of multichannel solutions and qualified databases to support businesses on all customer marketing issues. With this in mind, significant developments have been made to grow monetizable opt-in databases and release new b2b services (innovative brand content platforms or gratification marketing services for instance). It is also reflected in the stronger capital interest taken up in Activis, specialized in the promotion and creation of strong value-added web solutions. This subsidiary's development will make it possible to reinforce ADLPartner's online channel know-how, bringing various areas of technical expertise on board to enhance the marketing mixes and optimize the interactive marketing strategies. Lastly, to further strengthen its dynamic growth over the longer term, the Group remains open to new opportunities for development, both transversely and horizontally, with a view to acquiring and developing new offers on new channels, provided that they help deliver improvements in profitability. The quality of ADLPartner s financial position makes this ambition possible. Proprietary brands developing ADLPartner 2013 annual report 6

8 STOCK MARKET AND SHAREHOLDING Change in the share price 16 closing price ( ) janv.-11 avr.-11 juil.-11 oct.-11 janv.-12 avr.-12 juil.-12 oct.-12 janv.-13 avr.-13 juil.-13 oct.-13 janv % Breakdown of capital 20.2% 72.2% volume Vigneron family Group Treasury stock Public Shareholder dashboard Listing market ISIN Number of shares Parent company net income Proposed payout After deducting treasury stock Payout rate Proposed dividend per share Yield Based on average share price for 2013 Share price: average share price high low - End of period Market capitalization (at 31 Dec 2013) Euronext Paris (France) FR ALP 4,294,725 5,822 k 2,899 k 49.8 % % ,585,553 Theoretical breakdown of voting rights 12.4% 4.4% 83.2% Legal structure at 31 Decembe 2013 (% of capital) annual report ADLPartner

9 2013 CONSOLIDATED FINANC CIAL STATEME ENTS Consolidated balance sheet 9 Consolidated statement of income 11 Statement of consolidated net cash flows 12 Change in consolidated shareholder s equity 13 Key performance indicators 14 ADLPartner 2013 annual report 8

10 CONSOLIDATE ED BALANCE SHEET ASSETS Consolidated financial statements Consolidated balance sheet ( thousands) NON-CURRENT ASSETS Goodwill Intangible assets Tangible assets Investments in associates Assets held for sale Other financial assets Deferred tax assets Total Non-current assets CURRENT ASSETS Inventory Trade and other receivables Other current assets Cash and cash equivalents Total Current assets Assets held for disposal TOTAL ASSETS 12/31/ /31/ ,904 1,841 3,972 4,418 1,843 3, , ,022 1,8411 2,505 27,754 27,768 2,9422 3,403 26,501 24,116 59,037 57, ,359 68, annual report ADLPartner

11 Consolidated financial statements Consolidated balance sheet EQUITY AND LIABILITIES ( thousands) 12/31/ /31/2012 Restated Share capital 6,681 6,785 Consolidated reserves 4,281 2,229 Consolidated net income 7,276 5,650 Shareholders' equity 18,238 14,664 Of which: Group share 17,940 14,338 Minority interests NON-CURRENT LIABILITIES Long-term provisions 1,787 1,733 Financial debt 454 1,767 Deferred taxes liabilities Total Non-current liabilities 2,759 4,178 CURRENT LIABILITIES Short-term provisions Tax, personnel and fringe benefits 9,805 10,143 Trade and other payables 36,408 38,503 Financial debt 5 5 Other liabilities Total Current liabilities 47,191 49,575 Liabilities held for disposal TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 68,359 68,622 ADLPartner 2013 annual report 10

12 Consolidated financial statements Consolidated statement of income CONSOLIDATE ED STATEMENT OF INCOME ( thousands) Net sales (excluding VAT) Purchases Personnel costs External charges Taxes and duties Depreciation and amortization Other operating income (expense Current operating income Other income (expenses) Operating income Income from cash and cash equivalents Gross cost of financial debt Net financial income Other financial income (expense) Income tax charge Share of Associates' net income NET INCOME BEFORE INCOME FROM DISCONTINUED OPERATIONS OR HELD FOR DISPOSAL Net income (loss) on discontinued operations or held for disposal NET INCOME Group share Minority interests Basic net income (Group share) per share ( ) Diluted net income (Group share) per share ( ) Restated 111,482 (21,164) (23,087) (50,625) (2,089) (1,124) 113,719 (20,911) (22,782) (53,455) (2,035) (907) es) (3,397) (9,995) (3,562) 10, ,029 10, (63) (78) (38) (2,750) (4,169) (301) (30) 7,363 6,368 (87) (718) 7,276 5,650 7,304 5,741 (28) (91) 1,85 1,43 1,82 1,39 Statement of comprehensive income 2013 Net income Income and expenses directly taken to equity: Translation adjustment relating to the conversion of foreign currency-denominated operations Net actuarial (losses)/gains on defined benefit pension schemes, net of tax Comprehensive income Group share Minority interests 2012 Restated 7,276 5, ,329 5,650 7,357 5,741 (28) (91) annual report ADLPartner

13 Consolidated financial statements Statement of consolidated net cash flows STATEMENT OF CONSOLIDATED NET CASH FLOWS ( thousands) Restated CONSOLIDATED NET INCOME (INCLUDING MINORITY INTERESTS) 7,276 5,650 +/- Net depreciation, amortization and provisions (excluding items linked to current assets) 1,502 1,941 -/+ Unrealized capital gains (losses) relating to fair value movements +/- Calculated (expenses) income linked to stock options and related items /+ Other calculated (expenses) income (34) -/+ Capital gains losses on disposal of assets /+ Dilution gains (losses) +/- Share of Associates' net income Dividends (unconsolidated securities) Cash flow after cost of net financial debt and tax 9,125 7,693 - Net financial income (383) (539) +/- Income tax charge (including deferred taxes) 2,750 4,169 Cash flow before net financial income and income tax (A) 11,492 11,324 - Income tax paid (B) (3,489) (7,510) +/- Change in WCR linked to operations (including debt linked to employee benefits) (C) (1,410) 856 = NET CASH FLOW FROM OPERATIONS (D) = (A + B + C) 6,594 4,670 - Funds paid for acquisition of tangible and intangible assets (805) (1,183) + Funds received from the sale of tangible and intangible assets 19 - Funds paid for acquisition of long-term investments (unconsolidated securities) + Funds received from the sale of long-term investments (unconsolidated securities) +/- Impact of changes in group structure (27) (1,702) + Dividends received (equity accounted companies, unconsolidated securities) +/- Movements in loans and advances granted (250) + Investments grants received +/- Other cash flows from (used in) investing operations 92 (122) = NET CASH FLOW FROM (USED IN) INVESTING ACTIVITIES (E) (970) (3,006) + Proceeds from share capital increases. Paid by parent company shareholders. Paid by minority interests in consolidated companies + Sums received upon exercise of stock options /+ Purchase and sale of treasury shares 67 (2,172) - Dividends paid over the fiscal year. Dividends paid to parent company shareholders (3,971) (4,458). Paid to minority interests in consolidated companies + Proceeds from new borrowings - Repayment of loans (including lease finance agreements) (4) -/+ Net financial interest (including lease finance agreements) /- Other cash flows used in financing operations = NET CASH FLOW FROM (USED IN) FINANCING ACTIVITIES (F) (3,344) (5,821) +/- Impact of fluctuations in currency exchange rates (G) (1) = CHANGE IN NET CASH (D + E + F + G) 2,279 (4,157) Cash and cash equivalents at the beginning of the year * 24,907 29,063 Cash and cash equivalents at the end of the year * 27,185 24,907 * Including cash and cash equivalents on discontinued operations or held for disposal for 690 k at December 31, 2013 and 795 k at December 31, ADLPartner 2013 annual report 12

14 CHANGE IN CONSOLIDATED SHAREHOLDE ERS EQUITY Consolidated financial statements Change in consolidated shareholders' equity ( thousands) Share capital Parent company surplus (1) Group share Consolidated reserves (2) Net income for the year TOTAL Minority interests Total consolidated entity SHAREHOLDERS' EQUITY PUBLISHED AS AT 12/31/11 Impact of the change of method IAS 19 SHAREHOLDERS' EQUITY RESTATED AS AT 12/31/11 Net income for the year Translation adjustment relating to the conversion of foreign currency-denominated operations Net actuarial (losses)/gains on defined benefit pension schemes, net of tax Comprehensive income for the year Net income allocation ADLPartner dividends Impact of treasury shares Impact of stock options SHAREHOLDERS' EQUITY RESTATED AS AT 12/31/12 Net income for the year Translation adjustment relating to the conversion of foreign currency-denominated operations Net actuarial (losses)/gains on defined benefit pension schemes, net of tax Comprehensive income for the year Net income allocation ADLPartner dividends Capital reduction by cancellation of treasury shares Impact of treasury shares Impact of stock options Other SHAREHOLDERS' EQUITY AS AT 12/31/13 6,785 8,504 (7,732) 7,992 (573) 6,785 8,504 (8,305) 7,992 5, ,741 8,245 (253) (7,992) (4,458) (1,991) 71 6,785 12,291 (10,479) 5, , ,304 7,231 (1,491) (5,741) (3,971) (104) (744) (2) 6,681 14,807 (10,852) 7,304 15, ,965 (573) (573) 14, ,392 5,741 (91) 5, ,741 (91) 5, (4,458) (4,458) (1,991) (1,991) , ,664 7,304 (28) 7, ,357 (28) 7, (3,971) (3,971) (2) (2) 17, ,238 (1) Additional Paid-in capital + legal reserve + (2) Group reserves + translation adjustment other reserves + retained earnings in the financial statements of ADLPartner annual report ADLPartner

15 Consolidated financial statements Key performance indicators KEY PERFORMANCE INDICATORS GROSS SALES VOLUME Gross sales volume represents the value of subscriptions and other products sold. Net sales are represented: As regards subscription sales, by the amounts paid by magazine publishers, with sales being generated by the company in its capacity as a press agent. Sales thus actually correspond to a gross margin, since the cost of magazines sold is deducted from the amount of sales recorded, As regards other products sold, by sales revenue. Gross sales volume is reported before any discount or cancellation. Therefore it represents the most stable and standard indicator of the Group's performances. Gross sales volume from continuing operations decreased by 2.7% to 268,281 thousand in 2013 compared with 275,806 thousand in Gross sales volume can be broken down as follows. By geographic region ( thousands) ADLPartner France 260, ,500 ADLPartner Hispania 8,244 8,454 TOTAL 268, ,953 By product offering ( thousands) Open-ended subscriptions 194, ,065 Fixed-term subscriptions 41,952 44,285 Books-merchandises-audio-video 26,481 27,728 Others 5,246 3,874 TOTAL 268, ,953 ADLPartner 2013 annual report 14

16 Consolidated financial statements Key performance indicators NET ASSET VALUE The portfolio of open-ended subscriptions managed by the Company and its subsidiaries amounted to units as of December 31, It totaled 3,051,674 subscriptions as of December 31, It should be noted that all Group companies hold the financial rights related to each open-ended subscription. The value of the portfolio of open-ended subscriptions, net of taxes (Group share), rose December 31, 2012, to million as of December 31, from 98.3 million as of This increase in real asset value is not reflected in the consolidated financial statements. The value of the portfolio of open-ended subscriptions may be calculated by determining the current value of the future net revenues these subscriptions will generate throughout their useful life. These revenues may be determined in a precise manner by using the statistical information accumulated by the Company over several years concerning the behavior of such subscriptions in France and in its subsidiaries. The life curve of subscriptions recruited by a promotional campaign makes it possible to determine, at any time, the residual life expectancy of the subscriptions with great accuracy. The net contribution still to be received can be computed by applying to the number of remaining subscriptions the average revenues observed and the margin on direct costs (with discounts deducted). The present value of this contribution, calculated by applying a rate based on the money market rate, gives the value of this number of subscriptions. These portfolio values are then corrected for any underlying tax. The value of the portfolio of open-endedd subscriptions, net of taxes (Group share), can be broken down as follows: ( thousands) Value of ADL S portfolio (exclusivee of tax) (Group share) at 12/31/2013 ADLPartner France 97,328 ADLPartner Hispania 3,155 at 12/31/ ,294 4,051 Total 100,483 98,345 The value of the portfolio (Group share), plus consolidated shareholders equity (Group share), represented net asset value (Group share) that increased by 5..2% from million at December 31, 2012, to million at December 31, annual report ADLPartner

17 Consolidated financial statements Key performance indicators Net asset value can be analyzed as follows: ( thousands) 12/31/ /31/2012 (restated) Total Group share Minority Interests Total Group share Minority Interests Consolidated shareholders' equity 18,238 17, ,664 14, Value of ADL's portfolio (net of taxes) 100, , ,345 98,345 0 NET ASSET VALUE 118, , , , Net asset value (Group share) represents 29.8 per share (excluding treasury stock). ADLPartner 2013 annual report 16

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