ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 31 DECEMBER 1 rentabiliweb group Rapport Financier Annuel 31 December 1 ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 1
ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP
SUMMARY SUMMARY... A WORD FROM THE CHAIRMAN... 4 I...REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS... 5 II... CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 1... 7 III... CORPORATE GOVERNANCE... 66 IV...THE RENTABILIWEB GROUP SHARE... 79 V...STATEMENT BY THE BOARD OF DIRECTORS... 8 VI REPORT OF THE BOARD OF DIRECTORS ON THE PARENT COMPANY FINANCIAL STATEMENTS 84 ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 3
A word from the Chairman Dear shareholders and prospective shareholders, Rentabiliweb has been undergoing a true transformation in recent months. We ve pursued this sectors, but also given that every NICT company is obliged to integrate the fact that the Internet is group s future. We didn t choose that option. I didn t choose that option. The adopted strategy was the same one that my board of directors and I have been pursuing since the creation of our in the last 1 years. We anticipated the economic slowdown that s still affecting our traditional sectors, we anticipated the slower growth of the that fewer than 3% of web surfers who visit an online shop end up purchasing a product over the Internet, versus more than one out of every payment. Of course, all of this has a price. deliberate choice in order to prepare the coming decade. I ve assumed my responsibilities. We ve lengthened our investment horizon which, I merits of our choices. Jean-Baptiste Descroix-Vernier, Chairman ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 4
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 5
Summary 1. KEY CONSOLIDATED FINANCIAL DATA... 7. ABOUT RENTABILIWEB... 1 3. BUSINESS DEVELOPMENTS DURING THE YEAR... 17 4. COMPARISON OF CONSOLIDATED ANNUAL FINANCIAL RESULTS FOR THE YEARS ENDED 31 DECEMBER 1 AND 31 DECEMBER 11... 5. LIQUIDITY, CAPITAL RESOURCES AND MAIN RISKS... 3 6. RESEARCH AND DEVELOPMENT ACTIVITIES... 5 7. USAGE OF FINANCIAL INSTRUMENTS... 5 8. PRICE, CREDIT, LIQUIDITY AND CASH FLOW RISKS... 5 9. AUDIT COMMITTEE... 5 1... FACTORS LIABLE TO HAVE AN IMPACT IN THE EVENT OF A PUBLIC TAKEOVER OFFER... 6 ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 6
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 1 1.1. Consolidated balance sheet ASSETS (in thousands) Note 1 11 Goodwill 1 5 64 5 8 Intangible assets 4 1 4 6 3 1 161 1 38 4 46 364 Deferred tax assets 3 67 1 11 Non-current assets 58 86 58 83 6 7 344 3 899 4 179 4 7 7 86 11 53 Current assets 39 39 44 373 TOTAL ASSETS 98 189 1 456 EQUITY AND LIABILITIES (in thousands) Note 1 11 8 3 396 3 37 43 578 37 155 (46) (56) 1 114 1 575 9 (1 589) (63) 1 13 1 56 1 Equity 68 585 71 435 11 751 86 1-14 3 3 Deferred tax liabilities 3 46 616 Non-current liabilities 1 181 75 11 171 1-14 5 3 Trade and other payables 13 3 784 4 593 4 433 5 55 Current liabilities 8 43 3 316 TOTAL EQUITY AND LIABILITIES 98 189 1 456 ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 7
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 1 1.. Consolidated income statement INCOME STATEMENT (in thousands) Note 1 11 16 7 13 83 64 Gross Margin 41 17 47 595 % of revenue 58,9% Other operational earnings 17 35 33 18 (4 694) (3 661) Payroll expenses 19 (11 118) (8 11) ( 33) (11) Recurring operating income 3 18 15 955 % of revenue 4,4% 1 (844) 688 19 (1 76) (46) Operating income 1 188 18 183 % of revenue 1,7% (141) 34 3 67 (5 5) 3 ( 635) Consolidated net Income 1 113 1 576 % of revenue ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 8
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 1 1.3. Change in consolidated equity (in thousands) Share capital Premiums Group Currency translation differences for the year Treasury shares Instruments settled in the Company s shares Equity Group share Non-controlling interests Equity Position at 31.1.1 3 99 13 981 18 711 (35) 8 15 (615) 63 356 63 356 8 1 18 18 Appropriation of earnings 8 15 (8 15) paid (3 477) (3 477) (3 477) the period 1 575 1 575 1 1 576 () () () () Changes in 134 134 134 Other () () (1) 1 1 56 848 848 Position at 31.1.11 3 37 13 991 3 164 (56) 1 575 (63) 1 56 71 434 1 71 435 88 114 3 3 Appropriation of earnings 1 575 (1 575) paid (3 59) (3 59) (3 59) the period 1 114 1 114 (1) 1 113 11 11 11 Changes in 16 16 16 Other (884) (987) 1 76 (795) () (795) Position at 31.1.1 3 396 14 15 9 473 (46) 1 114 (1 589) 13 68 585 68 585 ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 9
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS About Rentabiliweb.1. B to B business sector: Third-party audiences Payment Direct marketing Business sector B to C: Proprietary audiences Astrology Dating Community sites ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 1
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS About Rentabiliweb....1. Supplier of monetisation solutions (B to B) PAYMENT Bank card collection The functionalities offered by the platform include: In 1, Rentabiliweb Europe: ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 11
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS About Rentabiliweb Micro-payment DIRECT MARKETING Direct marketing and loyalty programs ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 1
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS About Rentabiliweb on app stores. Personalised e-mail retargeting solutions ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 13
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS About Rentabiliweb TELECOM SERVICES astrology. ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 14
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS About Rentabiliweb... Publisher of a broad portfolio of digital entertainment content (B to C) Rentabiliweb has developed a broad range of entertainment and leisure websites. From being simply a monetiser of online audiences, the Group has evolved into an audience generator, with a portfolio of websites and services that covers all consumer entertainment and leisure needs, including casual gaming, dating, personal services, well-being, women s interest content, live entertainment, astrology, fortune-telling and humour. The group s total audience for all of its Web properties is estimated at over 5 million visitors a month, which puts Rentabiliweb among the global Top 1 in terms of French-speaking audience. Rentabiliweb s business model is underpinned by the massive audience it aggregates through its network of entertainment and special interest websites, which covers the full spectrum of loyalty-building content. Expertise in such monetisation techniques as subscription management, add-ons, database enhancement and customer acquisition cost optimisation helps ensure the revenue-generating capacity of the Rentabiliweb Group s content. Furthermore, in line with current trends in new technologies, the Group is still developing products compatible with all browsers and sites able and brochures. Apart from technical improvements in ease-of-use and navigation, many marketing enhancements have been introduced for sites. Dating In 11, Rentabiliweb released a new version of Yes! Messenger (www.yesmessenger.com), its successful instant messaging system, in use by many ensures a better and optimised user experience, thanks to a more up-to-date design and improved ease of use. This expertise has also helped to raise the Community sites and Jeu portals in early 13. For its part, the Jeu.org site has been completely overhauled in order to improve its positioning in search engines and to facilitate the integration of new paid social games. Moreover, the Toox.com site has been in a redevelopment phase since September 1, with the objective of rejuvenating the site and providing it with new remuneration channels. Its development using new technologies (HTML5/Javascript) will ensure its compatibility with tablets and mobiles as of its release. ClicBienEtre : Targeted exclusively for women; The Rentabiliweb group has thus built up a portfolio of very popular websites, such as : Astrology The design of the Purevoyance site (www.purevoyance.fr) has been improved, thereby making it easier for users to enjoy comfortably. New services are now available for web surfers, ensuring a better customer experience. www.rmobile.fr www.purflirt.com/ www.reflexfleurs.com www.jeu.org ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 15
R E P O R T O F T H E B O A R D O F D I R E C TO R S O N T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S About Rentabiliweb.3. Rentabiliweb s organisational structure Listed on Alternext Paris, a multilateral trading facility (MTF) of NYSE Euronext Paris, from December 6 and on Alternext Brussels, an MTF of NYSE Euronext Brussels, from January 9 following the introduction of NYSE Euronext s single order book, Rentabiliweb subsequently decided to change its market listing and was listed on Compartment C of NYSE Euronext s markets in Brussels and Paris from 15 February 1. Rentabiliweb Group shares obtained the Entreprise Innovante label in April 9, thus becoming eligible for inclusion in FCPIs (fonds communs de placement pour l innovation, closed-end mutual funds invested in innovative companies). Currently, Rentabiliweb Group shares are therefore traded continuously on Compartment C of NYSE Euronext s markets in Brussels and Paris under the ticker symbol BIL and the ISIN code BE9466946 through NYSE Euronext s single order book. In addition, following the decision by NYSE Euronext s Steering Committee for the French family of indices on September 11, Rentabiliweb has been a member of the indices CAC Small, CAC Mid & Small, CAC AllTradable and CAC All-Share since 19 September 11. Added to its memberships in the Belgian indices BEL Soft. & C.S., BEL Technology, BEL Small Index and BEL Small NR, this measure is giving fresh momentum to Rentabiliweb s stock market performance, in keeping with its aim of enhancing the visibility of Rentabiliweb Group shares among investors. Rentabiliweb s shareholders include its founders, and most notably Jean-Baptiste Descroix-Vernier, Chairman of Rentabiliweb s Board of Directors directly, and via his holding company Saint-Georges Finance, together with Financière LOV, the family holding company of Stéphane Courbit, as well as the company Le Peigné PA and PPR group. media and entertainment worlds, such as Gilles Lioret, Eric Licoys and Jean-Marie Messier, and from the telecom sector, including Franck Esser. The Group s executive directors are Mr. Jean-Baptiste DescroixVernier, Mr. Thibaut Faures Fustel de Coulanges, Vice-Chairman and Mrs. Corinne Chatal, Group HRD. At 31 December 1, the Rentabiliweb Group had 19 subsidiaries and more than 3 employees in France, Belgium, Romania, Bulgaria and Russia. Rentabiliweb Group SA is the parent company and controls all of these subsidiaries, either directly or indirectly. Group organisation chart to 31 December 1 ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 16
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 3 Business developments during the year all of the operating expenses that are directly related to its production, notably commissions paid to partners. related to Group activities, whether these proceeds and expenses are recurring or result from isolated and atypical decisions or operations. Non-current operating proceeds and expenses, that include any unusual, abnormal or infrequent elements, can disturb the tracking of the group s performance. Accordingly, for the tracking of the operational the other non-current operating proceeds and expenses, the cost of warrants or shares distributed to the personnel, and the possible goodwill amortisation expenses. customer loyalty and the optimisation of the transformation tunnel (from visiting a site to payment for the purchase). This division is structured around three complementary activities: The streamlining around these three activities has led the Group to reorganise the management and legal structure of certain subsidiaries. a lever for competence surrounding e-commerce issues. This division is made up of three segments: New high potential people have been recruited, and the group currently has dedicated teams that are experts in their market. 3.1. Activity report Highlights of the year The strategic orientation of the Rentabiliweb Group is structured around two axes: its development in line both with its organic growth strategy, with a priority focus on the launch of the new product bebill (www.bebill.com), and with its culture that targets performance, notably in the B to C segment. This restructuring of certain subsidiaries and the massive investment in the most earnings as of 13. Consolidated income statement INCOME STATEMENT (in thousands) Note 1 11 Revenue 16 7 13 83 64 Gross Margin 41 17 47 595 % of revenue 58,9% 57,% Other operational earnings 17 35 33 Recurring operating expenses 18 (4 694) (3 661) Payroll expenses 19 (11 118) (8 11) Depreciation and amortisation charges ( 33) (11) Recurring operating income 3 18 15 955 % of revenue 4,4% 19,% Other non-recurring operating income and expenses 1 (844) 688 Other payroll expenses and payments in shares 19 (1 76) (46) Operating income 1 188 18 183 % of revenue 1,7% 1,8% Financial results (141) 34 3 67 (5 5) Tax non-current elements 3 ( 635) Consolidated net Income 1 113 1 576 % of revenue 1,6% 1,7% ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 17
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 3 Business developments during the year 3.1.1. Comments on the consolidated revenue On 31 December 1, consolidated sales were equal to 7.13 million, a 15.9% decline relative to 11. The distribution of the sales between the different activity segments is the following: REVENUE (in thousands) B to B B to C TOTAL B to B segment 1 11 Change 6 7 43 986 34 133 49 131 7 13 83 64-3,7% -1,5% -15,9% In 1, the B to B activity generated revenue of 6.7 million, versus 34.133 million in 11. In the payment segment, consisting of micro-payment and bank card collections (Bebill), the lower revenue notably resulted from the discontinued marketing of Facebook Credits that represented 3.5 million activity s client portfolio. In the second half of the year, the Bebill collection offer asserted its unique positioning in the online payment market. Its very encouraging commercial dynamism resulted in the signing of contracts with major references, such as Winamax, Kenzo and pêcheur.com (Oxylane of its customers. Finally, Bebill consolidated the relations with its partners, notably through partnerships with CMS (Content Management Systems): Prestashop, Magento, etc. In the direct marketing segment, the revenue was impacted by the tightening of the marketing budgets of advertisers. As such, to maintain its leadership, the offers were streamlined around the ones that generate the increasingly adopted by advertisers and e-retailers since it makes it possible to generate additional sales thanks to an e-mail retargeting system. This shopping carts and failed payments, and it has already attracted major e-retailers such as Pixmania, Last Minute, MisterGoodDeal, Spartoo, Zalando etc. In the telecom segment, synergy has begun to develop between the company Rentabiliweb Interactive (ex-vidalia, company acquired in December 1) and Rentabiliweb Telecom, the group s historical operator. The work carried out in 1 allowed the Rentabiliweb Group to provide its customers with a structured offer that includes SMS campaign routing, the supply of company telephone services and call centres, facilities management as well as the processing of surcharged numbers (8 platform). This structuring and effects on the revenue that will be felt as of 13. B to C segment The revenue of the B to C segment was equal to 43.986 million in 1, versus 49.131 million in 11. context, was brought under control and is now being offset by astrology, that has seen continuous growth since its integration into the Group. market. Combined with the kick-off of new products and the exploitation of new distribution channels such as mobile phones, this transformation is providing the basis for a solid revenue increase. 3.1.. Analysis of the operational performances B to B segment B to B (in thousands) 1 11 Change Revenue 6 7 34 133-3,7% Gross margin 11 8 1 68-6,5% % of revenue 43,3% 35,4% +8,% Other operational earnings 1 3-57,% Recurring operating expenses (8 19) (5 63) +45,1% Payroll expenses (4 993) (1 991) +15,8% Depreciation and amortisation changes (1 556) 48-76,6% Recurring operating income (3 388) 4 746-171,4% % of revenue -13,% 13,9% -6,9% from in-depth work on the micro-payment activity s client portfolio. t expenses consisting of employment costs, marketing costs and consulting. Rentabiliweb had decided that, from the kick-off of this activity, it would have a structure that is equal to its ambitions in terms of market shares. s well as the generate positive results in ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 18
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 3 Business developments during the year B to C segment B to C (in thousands) 1 11 Change Revenue 43 986 49 131-1,5% Gross margin 9 937 35 57-15,7% % of revenue 68,1% 7,3% -4,% Other operational earnings 4 97-98,7% Recurring operating expenses (14 833) (15 868) -6,5% Payroll expenses (3 819) (4 188) -8,8% Depreciation and amortisation changes (63) (316) -16,8% Recurring operating income 11 6 15 453-8,6% % of revenue 5,1% 31,5% -6,4% well-established and long-standing relations with its partners. costs focused on certain expense items, but had no impact on the marketing investments for the astrology activity, such as to avoid compromising this segment s constant improvement. Holding company segment and central departments Holding (in thousands) 1 11 Change Revenue n/a Gross margin n/a % of revenue n/a n/a n/a Other operational earnings 1 1 n/a Recurring operating expenses (1 733) ( 19) -,9% Payroll expenses ( 36) (1 9) +,% Depreciation and amortisation changes (513) (143) +58,% Recurring operating income (4 531) (4 44) +6,8% % of revenue n/a n/a n/a of the technical services. versus 4.44 million in 11. The control and rationalisation of certain expense items made it possible for the group to rein in its level of operating expenses (.9% decline) and to acquire new key competences. 3.1.3. Comments on the consolidated net earnings Over and above the decline posted on the level of the ROC, the decline of the Operational income, amounting to 1 million, can primarily be explained by the existence of exceptional and non-recurring costs during the year (primarily the non-payment of a price supplement and a payment default by one of our customers after the bankruptcy of one of its partners), whereas the Group had recorded, in 11, exceptional income of.5 million (unwinding of a guarantee of liabilities related to a previous acquisition). In the end, the Consolidated Net Earnings at the 31 December 1 are equal to 1 million. ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 19
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 4 years ended 31 December 1 and 31 December 11 4.1. Analysis of balance sheet items At 31 December 1, the consolidated balance sheet total was equal to 98,188,885. 4.1.1. Assets Goodwill The goodwill was equal to 5.64 million at 31 December 1. This total includes the goodwill recorded upon the acquisition of Montorgueil, that recognised when the Edencast and Vidalia groups were purchased in 1, and goodwill upon SBSR s acquisition in 11. The net carrying amount of goodwill is reviewed at least twice a year and whenever events or circumstances indicate that an impairment loss may have occurred. Such events or circumstances relate to material adverse changes of a lasting nature, having an impact either on the economic environment or on the assumptions used or objectives set at the acquisition date. At 31 December 1, the Group reviewed the net carrying amount of its goodwill. As indicated in Note.5, the recoverable amount of CGUs or groups of CGUs is determined on the basis of the market value, generally estimated using earnings multiples, or the value in use, calculated as from the CGU or group of CGUs in question. As indicated in Note.5, and taking into account the results obtained for the Group s various subsidiaries, it did not seem necessary to recognise any impairment losses for goodwill. Other intangible assets Other intangible assets totalled 4.1 million, and fell by 379, relative to 31 December 11. They consist mainly of Montorgueil s business assets acquired in late 7, consisting of website domain names, technology and clientele. The decline recorded in 1 is mainly attributable to the software programs, IT developments and new functions required for the payments business launched in early 1. Trade and other receivables At 31 December 1, trade and other receivables decreased by 1% to 7.344 million, compared to 3.899 million at 31 December 11. Given the credit-worthiness of its main clients, especially those of the Group s Micro-payment and Telecoms divisions, with receivables due from telecoms operators, the Group considers that it is not exposed either to a material credit risk or to a marked dependence on any single client. Current tax assets At 31 December 1, current tax assets amounted to 4.179 million, representing an increase of 1.757 million compared to their amount of.4 million the previous year. The increase is primarily due to the size of the advances on corporate tax paid during the year relative to the tax payable on 31 December 1, to the Research Tax Credit posted for the French subsidiaries in the amount of 967,, and the corporate tax savings from the tax integration posted by Rentabiliweb Europe according to the principle of the reallocation of the Net cash position and investment securities The Group s net cash position was 7.86 million at 31 December 11, lower than its level at 31 December 11, but still corresponding to a surplus. made. The Group holds investment securities issued by leading counterparties, in the total amount of 3.475 million at 31 December 1, as opposed to 7.697 million at 31 December 1. The objective of the cash management policy The Group strengthened its cash management policy after the set-up of cashpooling for which the general objective is the best possible management of the cash surpluses generated on the Group level, for the purposes of their investment. Automatically managed by Natixis, this investment is liquid and represents no risk for the group. Property, plant and equipment Property, plant and equipment totalled 1.161 million and consisted mainly of B to B servers and other infrastructure. that Rentabiliweb holds in unlisted French start-ups, as well as security deposits and guarantees for the Group s premises. Deferred tax assets Deferred tax assets totalled.67 million at 31 December 1 versus 1.11 million at 31 December 1. They consist mainly of the temporary differences observed between the consolidated earnings and the taxable earnings of the consolidated companies and tax loss carry-forwards that could reduce future tax liabilities. 4.1.. Equity and liabilities Equity Consolidated equity amounted to 68.585 million at 31 December 1, compared to 71.435 million a year earlier. Detailed information on the table entitled Changes in consolidated equity included in the consolidated million of dividends. Provision for contingencies and losses risks, as well as provisions for general and personal risks. Provisions are recognised whenever a loss seems probable and measurable, particularly as a result of legal proceedings or claims brought against the Company or any of its subsidiaries, in the ordinary course of business. Provisions are written ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 4 years ended 31 December 1 and 31 December 11 back once settlement has been made or the risk is considered as no longer pertinent. The level of provisions for contingencies and losses increased from 57, at 31 December 11 to 953, at 31 December 1. This change is attributable to provisions for contingencies and losses relating to various trade or legal disputes. In addition, there were no detailed breakdown of changes is shown in Note 11. Financial liabilities respectively, at 31 December 11). Trade and other payables The fair value of trade and other payables is considered as approximately equivalent to their net carrying amount due to the shortterm maturity of these items. Trade and other payables thus amounted to 3.784 million at 31 December 1, as against 4.593 million a year earlier. Current tax liabilities Current tax liabilities amounted to 4.433 million at 31 December 1, representing a decrease of 1.117 million from their level a year earlier. Deferred tax liabilities Deferred tax liabilities totalled 46, at 31 December 1 versus 616, a year earlier. They are mainly attributable to temporary differences between the consolidated earnings and taxable earnings of the consolidated companies. 4.. Analysis of income statement items Revenue Consolidated revenue declined 16% in 1, to 7.1 million, as shown below: It breaks down in the following manner: Gross margin the operating expenses that are directly related to its production, notably commissions paid to partners. i.e. 58.9% of the revenue, an increase of 1.7 points relative to 31 December 11. These expenses correspond with: in the B to B segment: commissions paid to providers of content that Internet users accessed by purchasing codes on Rentabiliweb s micro-payment platforms; in the B to C segment: commissions paid to webmasters that deliver qualified audiences to Rentabiliweb s sites. Other operating income Other operating income totalled 35, at the end of the 1 versus 33, at 31 December 11, for a decrease of 97,. This item was high in 11 after the various adjustments related to the absorption of the company Montorgueil by the company RSA. Other operating expenses This item is equal to 4.694 million at 31 December 1, versus 3.661 million at 31 December 11. It primarily includes: in the B to B segment: bank charges incurred on the collection of bank card payments; in the B to C segment: sub-contracting expenses for the production of certain services, promotional and marketing expenses; in the Holding company segment: rental of premises and general expenses, sub-contracting expenses and other fees, promotional and marketing expenses (e.g. online advertising, etc.). Employment costs These costs totalled 11.118 million at end-1 versus 8.11 million a year efforts to acquire the talent it needs to further develop its core businesses and to launch its B to B e-money business. In keeping with the group s recruitment policy and human resources strategy, the increase in these costs is the direct result of the group s determination to obtain the Internet-related expertise it needs to establish positions in market segments that will generate future growth, without jeopardising current Depreciation, amortisation and provisions REVENUE (in thousands of euros) B to B 1 11 Change 6 7 34 133-3,7% This item, net of reversals, totalled.33 million at end-1 versus 11, at 31 December 11. At year-end 1, this item comprised 1.394 million in amortisation and assets and 69, in provisions and reversals for contingencies and losses. B to C 43 986 49 131-1,5% TOTAL 7 13 83 64-15,9% ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 1
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 4 years ended 31 December 1 and 31 December 11 Other non-current proceeds and expenses The other non-current proceeds and expenses item includes elements that are part of the earnings but cannot be considered as included in the The other non-current proceeds and expenses are negative, totalling 844 million at 31 December 1, versus proceeds of.688 million to 31 December 11. the purchase agreement for a previously completed acquisition, and secondly, a non-recurring expense and a payment default by one of our clients as a result of the insolvency of one of its partners. The group s follow-up and alarm procedures were immediately strengthened in order to include cases of late payments. Income tax expense The income tax item corresponds with the some of the taxes payable by all Group entities, plus any deferred taxation. includes an income tax expense of 1.719 million and proceeds due to deferred taxes of 1.785 million. 4.3. Post balance sheet events No events occurred after the balance sheet date of 31 December 1 with the potential to call into question the fair and true nature of the disclosures ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP
REPORT OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 5 Liquidity, capital resources and main risks 5.1 investments required for its operations and the distribution of dividends. (in thousands) 1 11 Net earnings from integrated companies 1 113 1 575 Elimination of the amortisations and provisions 8 (86) Elimination of the variation of deferred taxes (1 785) (51) Elimination of disposal capital gains or losses Other proceeds and expenses having no incidence on the cash (18) (79) Incidence of the change in working capital requirements 1 3 1 14 (859) (3 18) Net cash from operating activities * A 1 57 7 471 Financial acquisitions and price supplement payments (75) (1 346) 4 (1) Impact of changes in scope of consolidation 193 Capital increase 3 18 Dividends paid (3 59) (3 477) Treasury shares transactions (779) 1 Repayment of loans and other debts 673 B (4 89) (14 97) Change of the cash and cash equivalents A+B (3 57) (7 456) Net cash and cash equivalents at beginning of the period Net cash and cash equivalents at end of the period Impact of exchange rate variations 11 53 7 86 1 18 58 11 53 (19) Net increase (decrease) in cash and cash equivalents (3 57) (7 456) million. change in working capital requirements. 3 88 Investments made in 1 directly relating to the Payment division came to 484,. Adjusted for these investments for which the generation of the At 31 December 1, the Group s cash position was 7.86 million. The 3.57 million decrease in cash is mainly attributable to: the price supplements on the acquisition of the companies SBSR and Edencast; investments related to the new Payment segment; We also note that the WCR variation had a positive impact on the cash position, for 1.3 million. The group s working capital requirement is structurally positive and totalled 3.4 million at 31 December 1, versus 4.6 million to 31 December 11. ENGLISH TRANSLATION OF THE FRENCH RAPPORT FINANCIER ANNUEL 1 RENTABILIWEB GROUP 3