ADVEO results during first semester still affected by the lack of stock

  • Negative net result of €18.3m, however cost reduction has enabled thecompany to maintain an EBITDA of €2m.

  • ADVEO has received from the Banks an additional loan of €20 millionthat has allowed the company some recovery of its stock levels and its operational activity.

  • Staples Solutions has made a non-binding offer to the Banks for the acquisition of the whole financial debt of the Company in order to capitalize it.

  • Such a transaction would imply the elimination of the Financial Debt, which would definitively solve the structural debt problem that the Company was dragging, and contribute to build a multichannel leading group in Europe in the workspace solutions area.

Madrid, September 24, 2018.In the first semester of the year, ADVEO obtained anegative net result of €18.3m due essentially to the lack of stock availability, linked to the refinancing process, as explained in the last 2 quarters. Results continue hampered by this issue, a circumstance that will be solved gradually, starting with the liquidity injectionof €20 millionvia additional loan obtained from the financial entities.

On the other side, the company has agreed a sale option for its warehouse in Tres Cantos (Madrid)for €22 million.

In parallel, Staples Solutions B.V. has made a non-binding offer to the financial entities for the acquisition of the whole financial debt of the Company, in order to capitalize it. Such a transaction would imply the elimination of the Financial Debt, which would definitively solve the structural debt problem that the Company was dragging, and contribute to build a multichannel, leading group in Europe in the workspace solutions area.

On the results, revenue in the semester fell by 21.3% due to the lack of stock availability which penalized primarily the German and Spanish subsidiaries, that carries an inherent fall of 24.3% of Gross Margin.

As a consequence, EBITDA in 1S reached€2m, 72% less.Despite this severe situation, the continuous reduction of structural costs -€12.7m after theactions undertaken in Germany, France and Spain- has enabled ADVEO to maintain an EBITDA level in accordance with the budget.

Despite the difficulties due to the lack of stock, last quarter the company has made considerable progress in its the Strategic Plan 2017-2020. Thus, at the end of June ADVEO celebrated the European Partner Event 2018 in Paris. The event involved the presentation of the Group news regarding the new organizational and business model

to approximately 100 distributors. In this same event Calipage new image was presented, which will be implemented progressively in the second half of the year.

On the other hand, ADVEO has continued progressing in the implementation of a new technological platform to adapt the business model to the current reality of the market and increase efficiency and competitiveness. In the last quarter, ERP in the French subsidiary has successfully gone live, and it joins the ones already implemented in Italy, Germany, Corporate Headquarters, and Shared Services Center.

In addition, ADVEO has launched a new demand management model (Sales & Operations Planning) to coordinate sales, logistics and procurement areas. This will allow the company to have better working capital levels.

Working capital during first semester, due partly to a lack of commercial credit, reached€57.2m, 20% less than in the same period last year. Net financial debt reached€146.7m, 2 less than in December but 9 million more than in the first semester 2017.

About ADVEO

ADVEOis the European leader in office supplies and services from traditional office supplies to electronic office supplies, facilities management and managed printing services.ADVEOemploys more than 900 experienced professionals and attends 17,000 customers-distributors all over Europe with the best offer of products and services through a wide range of brands.

With headquarters in MadridADVEOis listed on the Spanish Stock Exchange (Madrid and Valencia) and is present in nine European countries: Spain, France, Germany, Italy, Portugal, Austria and Benelux.www.adveo.com.

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If you would like further information, please contact:

Investor Relations

Gerardo Gorostiza Tel: +34 91 678 98 22gerardo.gorostiza@adveo.com

Media Relations

Laura Villuendas Tel: +34 91 678 98 04laura.villuendas@adveo.com

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Adveo Group International SA published this content on 24 September 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 24 September 2018 18:03:06 UTC