A NOVO

As anticipated, the half-year results for 2007/2008 showed a downturn. However, the closure of ANOVO Americas, the re-organisation of the Videocom business in UK as well as the ramp-up of new contracts in Malaga should lead to an EBIT above 4% in H2, in a context that is favourable.

Half-year sales revenue

The sales revenue for H1 is at €168.3M, up by 12.6% compared to H1 of the previous year.

The progress in sales revenue is as follows:

Mobility: mobile phones; Access: set-top boxes, infrastructure & network; Displays: flat panel displays & IT equipment

At equivalent perimeter and constant exchange rate, the H1 sales revenue is at €172.7M, up by 17.3% compared to H1 of the previous year.

In accordance to the IFRS5 standard, the sales revenue does not take into account discontinued activities, i.e. the assembly plant in Malaga (€4.3M in H1 2006/2007) and the USA (€3.3M in H1 2007/2008 and €10.4M in H1 2006/2007).

Courant operating margin

The courant operating margin by strategic business area are detailed as follows:

The progress in the courant operating margin by strategic business area is analysed as follows:

Mobility : The activities in UK continue to perform well whereas the Nordic countries is progressing. However, the realisation of a one-off operation in France in H1 2006/2007 and the slower than expected ramp-up of the Malaga site explains the downturn in the margin in H1 2007/2008. In H2, the operating margin should recover back the level of last year’s half-yearly figure.

Access : In France, the Videocom business made a recovery in H1 2007/2008 to attain the level of H1 2005/2006 which took a downturn due to the merger of the satellite platforms. However, the industrial re-organisation in UK (Shipley site closure) and occasional quality problems in Italy have penalised the results. Favourable perspectives should allow a return to a norminal margin in H2 2007/2008.

Multimedia / Displays : The strong growth in Italy and the Nordic countries (Vasteras) could not compensate the On-site activity in France, which is today at equilibrium, as well as the delayed launch of new contracts in UK.
The profit loss of this activity will be greatly reduced in H2 and should attain breakeven towards the end of the financial year.

• Operating income : The non-recurring items amount to -€4.3M of which -€3.5M of non cash items (amortization of goodwill at -€3.1M, provision in Spain of -€0.3M) and -€0.8M of cash items (closure of Shipley in UK); the operating income is therefore negative at -€3M.

• Financial income/expenses is at -€3.2M as compared to -€2.7M in H1 last year. Financial expenses was stable at -€2.4M, taking into account exchange rate coverage. However, the application of the IFRS standards means that the variation of the right value of these coverage has to be taken into account in the results, i.e. a non cash expense of -€0.8M. This right value is extremely volatile due to current market conditions.

• Tax expenses are stable compared to last year (€-0.4M); no tax activation has been accounted for in the first half.

• Net income from discontinued operations : The amount of €8.6M included in the accounts of the year corresponds to the cost of the closure of the North American subsidiaryn, of which €0.7M of cash impact.

• Share of Group income is therefore at -€15.2M, with non cash items amounting to -€13.3M.

• Cash et balance sheet : In a context of accelerating growth, the company continues to limit the impact of the increase in WCR. It represents 6,5% of sales revenue end March 2008 (i.e. €22M), against 8.0% of sales revenue end March 2007 (i.e. €25M).

In addition, the Group which has the right scale in industrial equipment, has limited investments to 2% of sales revenue during the current half-yearly, i.e. €3M, against €6.0M last year, i.e. 3.3% of sales revenue.

Net debt amounts to €75M as at end March 2008 against €70M end September 2007.

• Perspectives : With the problems that have weighed down the H1 2007/2008 results under control, the Group anticipate an acceleration in sales revenue growth that may reach more than €340M in 2007/2008 and a courant operating margin that should go up to more than 4% in H2 2007/2008.

About ANOVO: With revenue of €317 million and 5,200 employees (2006/2007), ANOVO is the leading pan-European provider of maintenance and customisation services for the digital technologies used by major Telecommunications and Multimedia companies to deliver Triple Play (Voice/Data/Image) solutions. ANOVO runs more than 20 Centres of Excellence, and handles a high product turnover with an acknowledged level of quality. For more information, please visit our website www.a-novo.com.

P&L

Balance sheet

Cash Flow