annual report 2006

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(1)WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. annual report 2 00 6.

(2) Interview with the Chairman of the Executive Board We end the year with net income ‘‘ (Group share) of 1.75 million euros, up 126.1% from the previous year, a sound balance sheet and cash in the amount of 11.5 million euros.. ’’. What are ADLPartner’s main strategic focuses?. Could you comment on the 2006 results?. This year, the main strategic direc-. The merger bolstered our loyalty. 2006 was a year of profitable growth.. tions were mapped out. 2006 was. marketing offer based on magazine. The share of open-ended subscriptions. ADLPartner’s first year of operations. subscriptions since it provides us with. increased, provoking a moderate rise. in the new configuration created by the. many advantages. It enables us to. in net sales of 2.4%, but a very signifi-. merger-absorption of the former parent. ensure the long-term improvement of. cant increase in net income. Operating. company, France Abonnements, on. the current profitability of the subscrip-. income was up 11.8% at 4.3% of net. December 21, 2005. As of January 1,. tion portfolio.. sales compared with 4% in 2005.. 2006, the two teams were integrated in a new organization, which in particular transferred certain teams to functions more directly related to marketing and sales.. In terms of distribution, we are. Of course, the total result would. expanding our distribution channels.. have been better if it had not been. In particular, the outlook for the Internet. necessary to consolidate the losses. holds promise. With 66,000 subscrip-. on international activities. Subsidiaries. tions and 14 partners recruited, our. outside of France * reported an operating. This new organization enabled us. progressive, controlled development. loss of 4.5 million euros, due not only. to move away from our single distri-. demonstrates how appropriate the. to IFRS accounting of marketing and. bution channel model as we explored. model is.. sales investments, but also to difficult. the development of postcards and the Internet, which have already produced satisfactory and promising results.. In addition, we benefit from the optimization of our current portfolio through a proactive policy to recruit subscribers and partners. Lastly, we take advantage of market opportunities to diversify our offer. This is why we are developing cultural offers for books, articles, audio and video.. economic situations that we are currently striving to remedy. In France, business continued under excellent conditions of both profitability and growth, with operating income of 9.3 million euros (9.9% of net sales), up 39%. Altogether, we end the year with net income (Group share) of 1.75 million euros, up 126,1% from the previous year, a sound balance sheet and cash in the amount of 11.5 million euros. * After transfer to international activities of international division costs previously charged to the parent company.. 2. ADLPartner. ANNUAL REPORT 2006. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. How would you characterize the year 2006?.

(3) We wanted to highlight the notion of net asset value for the first time, in order to valorize the active open-ended subscription portfolio. NAV per share stood at 15.7 euros, up 8% from 2005.. What are your objectives for 2007? First of all, the recurring income form the subscription portfolio is a guarantee of solid, regular growth. Beyond that, the Group is ready to. I would like to stress the fact that ADLPartner continues to develop while respecting its objectives of profitable growth. The initiatives launched since the merger are progressively bearing fruit. We are confident in the future of ADLPartner. Our 2006 results justify this confidence, and the beginning of the year 2007 strengthens the feeling. That is why the Executive Board decided to ask the Annual Shareholders’ Meeting of June 22, 2007, to approve a dividend. pursue its international development, particularly in Germany and Spain. This geographic development allows us to share the risks and benefit from the different categories of market potential. This is a challenge we want to take up in order to build an enterprise that is know for its performance and dynamism over. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. As a listed company, you are going to pay a first dividend for the year 2006. Could you comment this decision?. the long term. In France, ADLPartner pursues its strategic growth with a dynamic marketing approach that enables us to expand our future prospecting bases. At the same time, we continue to improve marketing techniques, i.e. the increased use of telemarketing and the application of the Group’s expertise to new technologies.. of 0.20 euro per share. This measure translates our determination to boost the Company’s stock market profile and to position it as a stock with a strong Jean-Marie Vigneron Chairman of the Executive Board. asset base and a good yield.. ANNUAL REPORT 2006. ADLPartner. 3.

(4) Financial highlights. In 2006, ADLPartner expanded its consolidation base following the successful mergerabsorption with France Abonnements in December 2005, and implemented the first synergies as early as 2006. In France, the Group pursued its strategic growth. The increased pace of business was paralleled by continued improvement in marketing techniques and greater use of new technologies (Internet, digital magazines, etc.). Internationally, performance was contrasted. The Group now applies a different approach in each country. Germany was resized with greater focus on postcards. Brazil was in the last stages of a series of tests. The United Kingdom adjusted its position to focus on inserts and call centers. The future in the Group of the last two countries will be subject to a new evaluation in the third quarter of 2007.. Gross sales volume in millions of euros. 241.2 227.4. 2005. 2006. Net income * in millions of euros. Net sales. in millions of euros. 109.6. 2005. 112.2. 2006. Portfolio value * in millions of euros. 1.7. 63.2 60.4. 0.8. 2005. * Group share. 4. ADLPartner. ANNUAL REPORT 2006. 2006. 2005. 2006. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. A reference in loyalty marketing • 30 years of experience • An international dimension • 2.5 million active subscriptions • 66,000 Internet subscribers • New partnerships in 2006: La Poste, Crédit Agricole, La Redoute.fr, Mistergooddeal, etc..

(5) Operating income in millions of euros. Breakdown of gross sales volume by. 4.9. ty p. Other 1.9%. e. 4.4. of. pr odu. 12.4% Books-articles-audio-video. ct 62.0% Open-ended subscriptions 23.7% Fixed-term subscriptions. 2006. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. 2005. Net asset value * in millions of euros. by. 70.4. o p. hi. Spain 2.5%. e. ra. United Kingdom 2.2%. g. g. 65.4. c. Switzerland 0.4%. reg. io n. Germany 8.9%. Brazil 0.3%. 2005. 2006. 85.7% France. ANNUAL REPORT 2006. ADLPartner. 5.

(6) An innovative business focused on operational marketing. A specialized operator in loyalty marketing, ADLPartner develops, markets and implements online and offline turnkey services to ensure customer loyalty, mainly for banks, mass-market distributors and service providers. ADLPartner has developed its concept based on two key areas of expertise – its experience in the magazine market and its mastery of communication and promotional techniques. The company offers solutions to meet customer loyalty objectives in terms of the creation of events, subscription renewal, personalization and enhancement, so that partners can better optimize the capital their customer base represents.. European leader in loyalty marketing through press subscriptions • More than 120 million contacts initiated in 2006 • Almost 4 million orders per year • 2.5 million active subscriptions. ADLPartner is positioned at the. For almost 30 years, the Company. crossroads of two markets character-. has developed specific know-how with. ized by sustained growth – the individual. real value added in the efficiency of its. customer loyalty market for commercial. customer acquisition and loyalty initia-. partners, and subscriber acquisition. tives under its own masthead or that of. solutions for magazine publishers.. its customers. The relevance of its offerings has enabled the Company to forge many. CON. SULTING. partnerships. By enhancing customer loyalty based on open-ended and discounted press subscriptions, ADLPart-. Front office for services. ner offers real “home newsstands”. Its. Personalized call center. Internet. IN T E. S O U R CI N G. direct mailing, e-mail or telemarketing. Mailing. OUT. GRATION. Monitoring and reporting for publishers and partners. Multimedia design and production. Logistic platform. Back office. MA. 6. tomer databases that feed personalized. Multi-channel interaction. ADLPartner. NAGE MENT. ANNUAL REPORT 2006. Hosting, processing, enhancement of databases. campaigns. In response to the various expectations of magazine publishers, ADLPartner recruits new subscribers in all socio-professional categories, and manages active subscribers using proven promotional techniques.. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. partners have large nominative cusDevelopment of promotional operations.

(7) Fixed-term subscriptions. The merger with France Abonne-. ADLPartner has operational market-. ments in December 2005 made it pos-. ing know-how with creative teams that. New subscribers are recruited for a. sible to diversify distribution channels. constantly enhance the range of skills. fixed period, usually a year. At the end. for commercial offerings by adding the. the Group makes available to its cus-. of the first subscription, the customer. development of telemarketing and the. tomers and partners. Three categories. is offered the opportunity to renew the. Internet to existing direct mailing and. of services are offered.. subscription at a reduced rate. This is the system most magazine publishers. Open-ended subscriptions. use since it makes it possible to regroup. The objective in this category is to. operations directly targeting consumers. recruit subscribers who pay by bank. (for example, promotional initiatives. Gross sales volume or net sales. transfer at regular intervals, and the sub-. to encourage participation in lotteries). Gross sales volume represents the. scription is extended by tacit agreement. and operations, often conducted with. value of subscriptions and other. each month. This system is developing. partners, proposing subscriptions at. products sold, while net sales. rapidly, based on other subscription. very attractive prices. This category is. (which are determined on the basis. channels such as the telephone or the. an opportunity for partners to introduce. of the relevant professional status. Internet. Recruitment initiatives have. loyalty programs (e.g. distribution of. for subscription sales) only include. been expanded by developing new tech-. points/miles).. the amount of the compensation. niques to promote commercial offerings,. paid by magazine publishers.. such as online sales and telemarketing,. With subscription sales, net sales. with encouraging results in 2006.. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. insert campaigns.. Books-Articles-Audio-Video In addition to books, sales concern. thus actually correspond to a. cultural products (audio and video),. gross margin, since the cost of. as well as household items related. magazines sold is deducted from. to healthcare, well-being and leisure. the amount of sales recorded.. activities.. ANNUAL REPORT 2006. ADLPartner. 7.

(8) Strategic growth boosted by quality assets Net asset value. The value of the portfolio of open-ended subscriptions is calculated by determining the present value of the future net revenues these subscriptions will generate throughout their useful life. The life curve of subscriptions recruited via a promotional operation makes it possible to determine the residual life expectancy of the remaining subscriptions accurately. The net contribution still to be received from residual subscriptions corresponding to an operation is 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 the money market rate, gives the value of this number of subscriptions. The total value of the portfolio of subscriptions held is thus determined by cumulating all the values attached to all subscriptions. Portfolio value is corrected for any latent tax. The value of the portfolio, plus consolidated shareholders’ equity, represents net asset value.. The three key factors in ADLPartner’s success • Close ties with France’s major press publishers. Banks. > ADLPartner works with 120 press publishers > More than 350 newspapers and magazines are offered. • The quality of its active customer lists > Proprietary list: an active database of approximately three million customers > Through partnerships: access to several million customers within the framework of a loyalty marketing strategy. • Unique know-how in direct marketing > From writing messages to optimizing rates of response > From boosting sales to segmenting approaches > From optimizing customer relations to increasing the value of the customer base. Distribution. Telemarketing. Services. 8. ADLPartner. ANNUAL REPORT 2006. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. > Know-how that can be adapted and applied to other cultural products.

(9) Development focuses Controlled approach to international activities. As a vector of visibility and growth,. In 2006, ADLPartner reported con-. Germany: The subsidiary developed. subscription renewal is a key factor in. trasting performance by geographic. innovative telemarketing programs and. ADLPartner’s economic model. The. region that requires the Group to be. seized growth opportunities by intro-. Group has data on more than ten years. more vigilant as to the level and quality. ducing certain new techniques into its. of operations so that it can calculate the. of its commercial investments.. marketing strategy. In large measure,. average life of a subscription and thus forecast the potential of the subscription portfolio at the start of every year.. Segmenting approaches to boost sales. United Kingdom: Operations at ADLPartner UK continued to be divided between open-ended subscriptions, in partnership, and fixed-term subscriptions. Nevertheless, the latter business. the mass distribution of postcards, a new vector to encourage telephone calls and subscription sales, took the place of traditional direct mailing operations. This shift produced good results.. ADLPartner improves the attrac-. was voluntarily reduced and a close. Spain: The strategy focuses on the. tiveness of its offers in order to ensure. watch is being kept on all the company’s. capitalization of the innovative concept. continuous improvement of marketing. activities until re-evaluation in the third. of open-ended subscriptions and the. techniques and to boost growth. In addi-. quarter of 2007.. development of database reactivation. tion to marketing initiatives based on. Brazil: The tests conducted in 2006,. direct mailing and inserts, the Company has stepped up its prospecting activities through telemarketing and new media campaigns. A special campaign was launched to promote the sale of subscriptions through gift offers in partnerships and for works councils.. bolstered by generous promotional campaigns, reported high response rates. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. Greater visibility through renewals. services. New, promising partnerships were signed, and they are expected to give rise to major projects by 2007.. from a customer base that does not seem to be very loyal, and as a result, subscription lives are very short. For 2007, the Group intends to optimize its marketing mix to achieve both response rates and subscription lives capable of ensuring that operations generate a satisfactory level of profitability. As in the United Kingdom, a decision will be taken about the future of the Brazilian subsidiary in the third quarter of 2007.. ANNUAL REPORT 2006. ADLPartner. 9.

(10) Outlook: continued growth is ready to pursue ‘‘ itsADLPartner development in France and. internationally. The Internet is at the heart of the Group’s strategy, which already has a strong position as a major player in Internet loyalty marketing.. ’’. Internet: significant progress in record time Sales over the Internet are a major. The year 2006 illustrated the wis-. focus in the development of ADLPartner.. dom of the Group’s strategic choices.. To promote this ambition, the Group. With significant progress in this new. developed a unique model to recruit. channel and the recruitment of 14 new. electronic addresses. It is based on the. partners, including Alapage and Pix-. organization of lotteries and serves to. mania, results are encouraging, since. develop online sales managed by the. 66,000 subscribers were recruited in. Group at partners’ ad hoc sites, as well. 2006 via this new promotional channel.. as at its own sites (france-. These accomplishments are expected to. abonnements.fr and. be confirmed in 2007. The Group aims to. plusdemags.com).. recruit more than 100,000 subscriptions, and thus become a full-fledged player. Moreover, the new technologies open up new horizons. The Group plans to implement a digital magazine solution. This project is part of the Company’s strategic development of new channels. It targets the digitalization of magazines and the creation of online newsstands with partners.. 10. ADLPartner. ANNUAL REPORT 2006. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. in Internet loyalty marketing..

(11) The outlook for 2007 is favorable.. In France, business should receive a. The Company should report a further. boost from the policy that targets com-. increase in profitability. To meet this. mercial development in all product lines. objective, ADLPartner plans to pur-. and the promotion of new opportunities. sue a strategy focused on the creation. for marketing operations in partnership. of shareholder value through targeted. or under the Group’s own masthead.. investments that remain measured in. ADLPartner aims to increase market. terms of funding. The Group thus strives. share, since subscriptions tend to be. to optimize its current portfolio so as to. more popular than spot purchases.. Objectives for 2007 • Increase market share in France • Refocus investments internationally • Be a full-fledged Internet player • Improve profitability. Postcards, a promising vector Introduced in Germany in 2006, postcards are designed to encourage telephone calls, thereby generating sales of subscriptions.. The redefinition of international. More generally, and to enhance its. offerings will help improve performance.. dynamism, the Group remains open to. To this end, ADLPartner intends to imple-. new opportunities for cross-division. ment a policy of selective, measured. development in order to acquire and. investment in regions with the highest. develop new offers in new channels if. value added, with the prime aim of bol-. the latter contribute to the continued. stering economic profitability.. growth of profitability.. This innovation is increasingly taking the place of direct mailing operations. In 2006, this distribution channel reported encouraging results. This innovative system will be developed in 2007.. ANNUAL REPORT 2006. ADLPartner. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. improve overall profitability.. 11.

(12) Stock market and shareholders Stock market and shareholders Stock market ISIN code Number of shares Parent company net income Distribution Rate of distribution Dividend per share Yield Share price: highest/lowest/end of period Market capitalization as of 12/31/06 Share price in euros. Euronext Paris (France) FR0000062978 – ALP 4,500,000 2,389,000 euros 831,000 (accounting for treasury shares) 35% 0.20 euro 1.7% 24.84 euros/10.40 euros/12.01 euros 53,100,000 euros. ADLPartner aims to provide its. 30. shareholders with long-term profitability. To meet this necessary objective, the. 25. Group makes sure its financial communication is clear and transparent, 20. Transactions in thousands of shares. 60. and since 2006, it is committed to an active policy of distribution.. 15. 10. 0. Annual Shareholders’ Meeting of June. 30. 22, 2007, to approve a first dividend. 20. 5. 2004. 2005. 2006. 2007. The Executive Board will ask the. 40. of 0.20 euro per share. This measure, which reflects the Company’s strong. 10. financial base and significant cash flow,. 0. maintains the Group’s full capacity to seize any new opportunities to lock in strategic growth. On the basis of a share price of 12.01. Shareholders as of December 31, 2006. Treasury shares 7.63%. 35.14% Vigneron family group (voting rights 43%). euros (as of December 29, 2006), the share’s yield was 1.7%. Dividends paid for the year 2006 would total 831,000 euros (accounting for treasury shares), with distribution representing 35% of parent company net income. The Group plans to continue to. Stock market 23.46% (voting rights 14%). pay a dividend annually. It also intends to boost the Company’s stock market profile and to position itself as a stock with a strong asset base and a good 33.77% Publishers Clearing House (voting rights 41%). 12. ADLPartner. ANNUAL REPORT 2006. yield.. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. 50.

(13) WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. consolidated financial statements as of December 31, 2006. ANNUAL REPORT 2006. ADLPartner. 13.

(14) consolidated balance sheet. ASSETS thousands of euros. Goodwill. 12/31/06. 12/31/05. 12/31/04 pro forma. 172. 172. 0. Intangible assets. 1,697. 1,930. 1,811. Tangible assets. 5,053. 5,097. 2,202. 667. 640. 710. Other long-term investments Deferred tax assets. 4,580. 4,948. 6,619. Non-current assets. 12,168. 12,787. 11,341. 5,161. 3,550. 2,722. 29,922. 26,515. 22,215. 4,486. 5,882. 5,034. Cash and cash equivalents. 11,511. 10,738. 12,282. Current assets. 51,080. 46,685. 42,252. Total assets. 63,248. 59,472. 53,594. 12/31/06. 12/31/05. 12/31/04 pro forma. Capital. 7,001. 7,001. 6,251. Consolidated reserves. 3,644. 2,499. -2,290. Consolidated net income. 1,956. 1,031. 5,321. Inventory Accounts receivable Other receivables. thousands of euros. Shareholders’ equity. 12,600. 10,531. 9,282. - Group share. 7,281. 5,038. 4,317. - Minority interests. 5,319. 5,493. 4,966. Long-term provisions. 395. 371. 388. Financial debt. 924. 1,214. 458. Deferred taxes. 1,006. 1,126. 0. Non-current liabilities. 2,326. 2,711. 847. 259. 550. 828. Short-term provisions Tax and social contributions. 12,126. 7,793. 7,898. Payables. 35,044. 35,325. 32,984. Financial debt. 303. 2,423. 1,625. Other debt. 591. 138. 129. Current liabilities. 48,322. 46,230. 43,464. Total shareholders’ equity and liabilities. 63,248. 59,472. 53,594. The 2006 and 2005 financial statements correspond to the financial statements of the new entity; the 2004 financial statements, which are presented for purposes of comparison, correspond to the 2004 pro forma financial statements of the new entity as if the merger had taken place on January 1, 2004.. 14. ADLPartner. ANNUAL REPORT 2006. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. SHAREHOLDERS’ EQUITY AND LIABILITIES.

(15) consolidated statement of income. 2006. 2005. 2004 pro forma. 112,245. 109,638. 100,118. Input. (24,058). (23,569). (18,770). Payroll. (20,404). (20,900). (18,740). External charges. (57,472). (56,107). (50,961). Taxes. (1,169). (1,128). (963). Depreciation and amortization. (1,091). (1,038). (1,675). Provisions. (1,188). (1,091). (1,285). Other operating income (expense). (2,004). (1,487). (1,188). 4,860. 4,347. 6,537. Net sales (excluding VAT) Other income. Operating income. 28. Income from cash and cash equivalents. 328. 239. 155. Cost of gross financial debt. (85). (132). (173). Cost of net financial debt. 243. 107. (18). Other financial income (expense). (130). 115. 55. (3,233). (2,856). (3,677). 1,740. 1,713. 2,897. 216. (682). 2,424. Net income. 1,956. 1,031. 5,321. - Group share. Tax charge Net income before income from discontinued activities Income (loss), net of taxes, on discontinued activities. 1,745. 772. 3,783. - Minority interests. 210. 259. 1,538. Basic net income (Group share) per share in euros. 0.42. 0.19. 0.91. Diluted net income (Group share) per share in euros. 0.41. 0.18. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. thousands of euros. The 2006 and 2005 financial statements correspond to the financial statements of the new entity; the 2004 financial statements, which are presented for purposes of comparison, correspond to the 2004 pro forma financial statements of the new entity as if the merger had taken place on January 1, 2004.. ANNUAL REPORT 2006. ADLPartner. 15.

(16) statement of consolidated net cash flows. thousands of euros. 2006. 2005. 2004 pro forma. Consolidated net income (including minority interests). 1,956. 1,031. 5,321. +/- Net depreciation, amortization and provisions (excluding items linked to current assets). 798. 757. 747. +/- Calculated (expense) income linked to stock options and related items. 337. 126. 142. -/+ Capital gains and losses on disposal of assets. 16. 25. (5). Cash flow after cost of net financial debt and tax. 3,108. 1,939. 6,205. (243). (107). 18. +/- Tax charge (including deferred taxes). 3,233. 2,856. 3,941. Cash flow before cost of net financial debt and tax (A). 6,098. 4,688. 10,164. + Cost of net financial debt. 454. (2,623). (1,835). +/- Change in working capital requirements linked to activities (including debt linked to employee benefits) (C). - Taxes paid (B). (2,342). (1,758). 3,695. = Net cash flow generated by activities (D) = (A + B + C). 4,210. 306. 12,024. - Monies paid linked to acquisition of tangible and intangible assets. (811). (1,996). (1,142). 9. 23. 189. (342). (1,501). + Monies received linked to disposal of tangible and intangible assets +/- Impact of changes in the consolidated entity +/- Other flows linked to investing activities = Net cash used in investing activities (E). (36). (252). (206). (1,181). (3,726). (1,159). 537. 60. (118). (481). + Sums received upon exercise of stock options -/+ Acquisition and resale of treasury shares. 25. - Dividends paid during the year - Dividends paid to the shareholders of the parent company (3). + Monies received linked to new loans - Repayment of loans (including lease finance agreements) - Net financial interest paid (including lease finance agreements) +/- Other flows linked to financing activities = Net cash flow linked to financing activities (F) +/- Impact of fluctuations in currency exchange rates (G) = Change in net cash (D + E + F + G) Cash at the beginning of the year Cash at the end of the year. 1,100 (342). (122). (2,874). 199. 10. 20. (297). 1,406. (3,275). 92. (85). 69. 2,824. (2,099). 7,659. 8,683. 10,782. 3,123. 11,507. 8,683. 10,782. (176). The 2006 and 2005 financial statements correspond to the financial statements of the new entity; the 2004 financial statements, which are presented for purposes of comparison, correspond to the 2004 pro forma financial statements of the new entity as if the merger had taken place on January 1, 2004.. 16. ADLPartner. ANNUAL REPORT 2006. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. - Paid by the minority interests in consolidated companies.

(17) change in consolidated shareholders’ equity. thousands of euros. Shareholders’ equity as of 1/1/2005 Capital increase. Group share Reserves Consol- Net income linked to idated of the year capital (1) reserves (2). 6,251. 29,452. 750. (750). Translation adjustment. (31,387). 4,316. 772 (1,248). 9,282 0. (128). (128). Impact of components. 4,966. 0. Income for the year Impact of client lists. Minority interests. Total consolidated entity. Total. 1,248. 5. 772. (128) 259. 1,031. 0. 0. 5. 5. 18,784. 0. 0. Impact of deferred taxes on client lists. 436. 436. 436. Impact of treasury shares. (90). (90). (90). 60. 60. 60. Impact of deferred charges. (18,784). Impact of stock options. (333). 268. (65). 8,675. (11,410). 772. 5,038. 5,493. 10,531. 2,346. (1,574). (772). 0. 1,745. 1,745. Change in the consolidated entity Shareholders’ equity as of 12/31/2005. (333) 7,001. Allocation of net income Translation adjustment. 94. 94. Income for the year. 0 94 210. 1,955. Payment of SCI de la Rue de Chartres dividend. 0. (3). (3). Reimbursement ADLP Marketing Capital Reserve. 0. (174). (174). 1. 1. (1). 0. (64). (64). 56. (8). (262). (267). Change in the consolidated entity ASI Change in the consolidated entity ADLP Marketing. (5). (5). Impact of treasury shares. (18). (18). (18). Impact of stock options. 101. 101. 101. Impact of plan to grant bonus shares. 237. 237. 237. Change in the consolidated entity SCI de la Rue de Chartres. Consolidation of income of ADLP Italia. 177. 177. 177. Capital gains (losses) on disposal of ADLP Italia. (15). (15). (15). Deconsolidation of ADLP Italia. (10). (10). (10). Shareholders’ equity as of 12/31/2006. 7,001. 11,021. (12,486). 1,745. 7,281. 5,319. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. Capital. 12,600. (1) Paid-in capital + legal reserve + other reserves + retained earnings. (2) Group reserves + translation adjustment.. ANNUAL REPORT 2006. ADLPartner. 17.

(18) key performance indicators Gross sales volume. Net asset value. Gross sales volume represents the value of subscriptions and. The portfolio of open-ended subscriptions managed by. other products sold, while net sales (which are determined on. the Company and its subsidiaries counted 2,425,370 units. the basis of the relevant professional status for subscription. as of December 31, 2005, and totaled 2,586,459 subscrip-. sales) only include the amount of the compensation paid. tions as of December 31, 2006. It should be noted that all. by magazine publishers. With subscription sales, net sales. Group companies hold the financial rights related to each. thus actually correspond to a gross margin, since the cost. open-ended subscription.. of magazines sold is deducted from the amount of sales recorded, whereas with other products sold, they correspond. The value of the portfolio of open-ended subscriptions, net. to net sales in the usual sense of the term.. of taxes (Group share), rose from 60.4 million euros as of December 31, 2005, to 63.2 million euros as of December. Gross sales volume is understood before any discount or. 31, 2006.. cancellation. That is why it represents the most stable and homogeneous indicator of the Group’s business.. This increase in real asset value is not reflected in the consolidated financial statements.. Gross sales volume totaled 241,164,000 euros in 2006, compared with 227,423,000 euros in 2005.. The value of the portfolio of open-ended subscriptions may be calculated by determining the present value of the future net. Gross sales volume can be broken down as follows.. revenues these subscriptions will generate throughout their useful life. These revenues may be determined in a precise. By geographic region France Abo Service International. manner by using the statistical information accumulated by 2006. 2005. 206,710. 195,153. 21,376. 22,555. the Company over several years concerning the behavior of such subscriptions in France and in its subsidiaries.. ADLPartner Suisse *. 995. 968. The life curve of subscriptions makes it possible to determine. ADLPartner Hispania. 6,007. 3,653. the residual life expectancy of the subscriptions accurately.. ADLPartner UK. 5,319. 5,023. The net contribution still to be received can be computed. 758. 71. by applying to the number of remaining subscriptions the. 34,454. 32,270. average revenues observed and the margin on direct costs. 241,164. 227,423. (with discounts deducted). The present value of this contri-. ADLPartner Brésil International Total. bution, calculated by applying the money market rate, gives. * prorata consolidation.. the value of this number of subscriptions.. By product offering thousands of euros. 2006. 2005. Open-ended subscriptions. 149,463. 132,486. Fixed-term subscriptions. 57,118. 58,732. Books-articles-audio-video. 29,901. 31,009. 4,683. 5,196. 241,164. 227,423. Other offerings Total. The total value of the portfolio of subscriptions held can be determined by cumulating all the values attached to all subscriptions. These portfolio values are then corrected for any latent tax. Finally, only the Group share is recognized in the value of the subscriptions portfolio. The value of the portfolio, net of taxes (Group share), can be broken down as follows.. 18. ADLPartner. ANNUAL REPORT 2006. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. thousands of euros.

(19) thousands of euros. 12/31/06. 12/31/05. The value of the portfolio (Group share), plus consolidated. 55,101. 52,521. shareholders’ equity (Group share), represented net asset. 8,072. 7,658. value (Group share) that rose from 65.4 million euros as of. 63,173. 60,179. December 31, 2005, to 70.5 million euros as of December. 228. 31, 2006, an increase of 5.1 million euros for the period. France International Total Discontinued activities * Total value of the open-ended portfolio. 63,173. 60,407. (+7.8%). Net asset value can be analyzed as follows.. * ADLPartner Italia.. 12/31/06 Group share. Minority interests. Total. 12/31/05 Group share. Minority interests. Consolidated shareholders’ equity. 12,600. 7,280. 5,320. 10,531. 5,038. 5,493. Value of the open-ended portfolio (net of taxes). 64,542. 63,173. 1,369. 62,000. 60,407. 1,593. Net asset value. 77,142. 70,453. 6,689. 72,531. 65,445. 7,086. thousands of euros. WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. Total. ANNUAL REPORT 2006. ADLPartner. 19.

(20) Abo-Service International AMV Admiralitätstrasse 58 – 20459 Hamburg – Germany Tel. +49 40 377 00 000 ADLPartner Suisse 38 avenue Vibert – 1227 Carouge/Ge – Switzerland Tel. +41 22 308 08 80 ADLPartner UK 18B Somerset House – Westside View – Waterlooville Hampshire PO7 7SG – United Kingdom Tel. +44 239 244 7600 ADLPartner Hispania Plaza de Castilla 3, 16° D1 – 28046 Madrid – Spain Tel. +34 902 36 26 11. 3, rue Henri Rol-Tanguy 93100 Montreuil – France Tel. +33 1 41 58 72 03 Fax +33 1 41 58 70 53 www.adlpartner.fr. CALYPTUS English translation: Thomas Michael Gunther WorldReginfo - 08a5ced2-3d60-476c-a18e-d970e463c8c3. ADL Servicos de Fidelização Alameda Franca, 1439/212 São Paulo – SP – 01422-001 – Brazil Tel. +51 11 30647637.

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