Full Year Results

Wednesday 19 June 2013

Statement of Results for the twelve months ended 30 April 2013

- A Year of Significant Change -

Delivering our Strategic Plan - 'Nouvelle Confiance'

·; Market share outperformance in our core markets of France, Belgium and the Netherlands in what remain challenging markets.

·; Continued growth of cross-channel sales, up 11%.

·; Good progress in eliminating losses in our non-core markets of Italy and Spain.

·; Developed new commercial initiatives (the '4Ds') with a focus on France.

·; Cost reduction plans on track, to be delivered in full by the end of 2014/15.

Financial Summary for the twelve months ended 30 April 2013*

·; Group revenue of €3,802.8 million (2012: €3,896.7 million), down 2.5% in constant currency1 and 1.1% on a like-for-like basis.

·; EBITDA2 of €103.8 million (2012: €176.6 million) and Group retail profit3 of €38.7 million (2012: €89.8 million).

·; Adjusted4 Group profit before tax of €26.4 million (2012: €78.7 million).

·; Adjusted earnings per share of 2.5 cents (2012: 10.0 cents). Basic losses per share of 13.8 cents (2012: earnings per share 3.4 cents).

·; Excluding Darty Spain, retail profit of €55.7 million, adjusted4 Group profit before tax of €43.4 million and adjusted earnings per share of 5.6 cents.

·; Total loss of €105.3 million (2012: loss of €313.9 million) for the year including discontinued operations and after exceptional costs of €115.3 million (2012: cost €34.6 million).

·; Net cash outflow including discontinued operations of €20.6 million (2012: outflow €253.5 million) with net debt at the end of the period of €150.6 million (2012: net debt €126.5 million).

·; The Board is recommending a final dividend of 2.625 cents per share (2012: 1.25 cents) bringing the total dividend for the year to 3.5 cents per share (2012: 3.5 cents).

*Excluding results of discontinued operations except where stated otherwise

Alan Parker, Chairman, commented:

"Since I was appointed Chairman last August, we have made significant progress in our priorities, namely to restore shareholder value, renew the Board and review our markets and operations.

"We have substantially renewed our Board with both the appointment of a new Chief Executive with extensive experience in European retailing and five non-executive Directors with in-depth knowledge of European consumer markets.

 "We have taken action to eliminate the losses in our non-core businesses with the disposal of Darty Italy and the managed closure of Darty Spain. Our position is strengthening in France, Belgium and the Netherlands with market share gains and we are on track with our plans to drive greater efficiency at reduced cost across the Group.

 "We continue to plan prudently in what remain challenging market conditions. Nevertheless we are confident that our new management team will deliver an improvement in earnings over the medium term. In the light of this, the Board is recommending a final dividend of 2.625 cents, so maintaining the dividend at 3.5 cents for the full year."

Chief Executive Régis Schultz added:

"In my first few weeks at Darty, I have clearly seen the power of the Darty brand, the strength of our service infrastructure and have been impressed by the high professionalism of all my new colleagues. All this puts us in a very strong position to build on the good progress already made on our Nouvelle Confiance plans.

"The year ahead will be challenging and we anticipate that market conditions and product mix will continue to put pressure on margins. We aim to mitigate this through our cost saving programmes which, given the implementation timeframe, we expect to be more weighted to the second half.

"Our review of the business has identified plans that will deliver an improvement in earnings over the medium-term, and we will deliver these through the '4Ds' - Driving trading, Digitalising Darty, Developing the brand and Delivering cost efficiency. I am looking forward to reporting on our progress throughout the year."

1 Constant exchange rate of 1 Euro = Czech Kr 25.3412, Turkish Lira 2.3139

2 Retail profit before depreciation and amortisation and profit/(loss) on disposal of property, plant and equipment and intangible assets including write-offs.

3 Retail profit/(loss) represents total operating profit/(loss) before the share of joint venture and associates' interest and taxation, the movement in options and related charges over non-controlling interests, impairment of available for sale financial assets, exceptional costs, profit on disposal of business operations and amortisation and impairment of acquisition related intangible assets.

4 Excludes the share of joint venture and associates' interest and taxation, the movement in options and related charges over non-controlling interests, profit on disposal of business operations, impairment of available for sale financial assets, exceptional items and amortisation and impairment of acquisition related intangible assets.

There will be a presentation to analysts and institutions at 09:00 today at UBS, 100 Liverpool Street, London, EC2M 2RH. A live audio webcast of the event will be available via our website www.dartygroup.com, and recorded for access later in the day.

Darty plc will issue an Interim Management Statement on 12 September 2013 for the first quarter trading period of 1 May 2013 to 31 July 2013.

Enquiries

France

Le Public Système

Ségolène de Saint Martin +33 1 41 34 23 31 / +33 6 16 40 90 73

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future results in forward looking statements. Unless otherwise required by applicable laws, regulations or accounting standards, Darty plc does not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise.

NOUVELLE CONFIANCE

At the time of the appointment of a new Chairman in August 2012 we announced a review of the Group, its markets and its operations in order to restore profitability and establish the foundations for long term success and rebuilding shareholder value.

In reviewing the Group we identified four key conditions for success in choosing our core markets:

·; A fundamentally sound market - large markets which have growth prospects with a sizeable profit pool;

·; The Darty DNA - demand for a high service proposition which resonates with consumers;

·; Current business built on a solid platform - relevant local market share and cross-channel capabilities;

·; A clear path to future profit growth opportunities - to grow profitable market share and develop new revenue streams.

We concluded that, while our businesses in France, Belgium and the Netherlands met these conditions, our businesses in Italy, Spain, the Czech Republic and Slovakia did not, and our business in Turkey was to remain under review.

We have made good progress in eliminating losses at our non-core businesses. The disposal of the operations of Darty Italy to D.P.S. completed on 1 March demonstrated our commitment to eliminating losses and focusing on our core businesses with a rapid impact on financial performance. Given the poorer market conditions and larger business, it was not possible to take a similar course of action in Spain at a reasonable cost. Therefore we started a managed closure of Darty Spain in April and all the stores are now closed. For Datart in the Czech Republic and Slovakia, we continue to work on options for our shareholding with our partners in that business. In Turkey we are taking actions to improve performance of the business, reducing costs and improving our store portfolio.

As first announced in December, 'Nouvelle Confiance' is our plan to build a newly focussed business. We have five unique competitive strengths at the heart of our business that provide a platform for our future growth:

·; Market leadership;

·; Established brand equity;

·; A powerful online business;

·; Service leadership;

·; Leading cross-channel retailer with national reach and unrivalled infrastructure.

Darty France is the key driver of our future profitability. Here, we are the leader in the consumer electricals market with scope to grow; we have huge brand equity with 93 per cent brand awareness; we have a large and a growing share of the online market; more customers than for any of our competitors rate Darty's service proposition as number one in the market; and we have national reach and infrastructure.

We have started to leverage these strengths further and our review identified a number of immediate opportunities for improvement, as well as some longer term options.

'Nouvelle Confiance' will capitalise on these opportunities in France and our other core markets in three stages: 

·; Refocus on core markets with new commercial initiatives;

·; Create value from our market leadership and efficiency savings; and

·; Develop future growth opportunities.

The '4Ds'

When we launched Nouvelle Confiance we also highlighted a number of areas of focus in our core markets to improve performance. These were around pricing, the store experience, improving margin and further leveraging our successful cross channel proposition.

Since his arrival, Régis Schultz has developed these areas as the '4Ds', focussing on our principal business in France:

1. Drive trading;

2. Digitalise Darty;

3. Develop our brand; and

4. Deliver cost efficiency.

1. Drive Trading

This focuses on delivering on our promise to customers and building on our market leading service offer.

Over the last year our stores have been being revitalised to provide a modern experience that befits our position as market leader and makes it easier for customers to buy. We have introduced improved in-store merchandising in the majority of stores, particularly in Multimedia, with the introduction of new displays and dedicated Apple product tables. New marketing campaigns have been launched to improve our price perception and to get more credit for our value proposition and we have simplified the buying process with a self-service offer for small domestic appliances in the majority of stores which improves our ability to capture impulse buyers.

A new credit offer has been introduced, with both improved integration into the sales process and communication. Our national infrastructure has been leveraged to provide a premium paid-for delivery service which was launched in the Paris region last summer.

We are now building on our price promise by introducing a wider range of entry price products and have launched "Darty Days", where customers can accumulate points through their level of spend and specifically promoted products to redeem discounts on future purchases.

We will develop our service offer with the introduction of "Atelier Darty", dedicated service desks for on-site repair and assistance, and improved in-store marketing.

2. Digitalise Darty

This ensures we fully exploit our cross-channel offer and leading web site.

Over the last year we have continued to be successful as a cross-channel retailer, growing our web generated sales faster than the market and delivering a positive net contribution ahead of the stores. We have further leveraged our infrastructure as a cross-channel retailer and accelerated our online offer through improved site traffic; developing accessory bundles; a greater emphasis on the service offering with a dedicated services and subscription section to the website and a dedicated social media website.

We are extending this with greater use of technology to connect our stores, sales staff, delivery and after-sales teams. Improved integration between the store and web channels will come from the roll-out of dedicated "click and collect" points and allocated parking at stores.

In the autumn a reinvigorated format will be introduced in a new store at Beaugrenelle, Paris. This store will have a more modern fit-out and include improved demonstrations around product interconnectivity, better instore links with the web site and staff equipped with tablets to better demonstrate products and extended ranges.

3. Develop our Brand

This continues our focus on exclusive products and bringing the Darty offer to a wider consumer base.

We have been defending margin through better sourcing and growing our service revenues. In sourcing we already have a better partnership with suppliers and greater frequency of co-branding with leading manufacturers. Work is continually ongoing to develop exclusive, own label and licensed products where the margin can be significantly higher. We are further developing our own brand, licensed and exclusive products, with particular emphasis on being first to market for new products.

The review of our operations also demonstrated how we can build on our competitive strengths to generate new profit streams for the Group. Our kitchens business at Darty France is one example of our ability to move into a new product area, build a relevant market position and drive profitability. We believe there are further similar opportunities to develop new revenue and profit streams, which are complementary to the core business.

Darty is the market leader in France with 70 per cent of consumers within a 30 minute drive time of a store. The remaining 30 per cent represent an opportunity to further exploit the existing infrastructure of the cross-channel offer and we continue to work on ways to capitalise on this.

4. Deliver cost efficiency

Throughout the Group, we had targeted annual cost savings of €50 million per annum by 2015/16 from delivering a more efficient operating model, continuing to adapt our cost structure and leveraging synergies between our operating companies.

Additional plans are now being implemented to rationalise the Group and Darty France head office functions, including sourcing and the merger of regions in France, with no impact on the leading service offer Darty provides to its customers. These plans will allow us to deliver the €50 million cost savings by the end of 2014/15.

There is also scope to improve our balance sheet efficiency. Our freehold property underpins the operating and credit strength of the Group, supporting good relationships with our suppliers and finance providers. It also provides flexibility to adapt our store portfolio as the business evolves but it requires active management to ensure maximum value to the Group. A major sale and leaseback option was investigated but we concluded that it was not in the long-term interests of the business and its stakeholders. We have however identified non-core property disposals which we expect to release circa €35 million of net proceeds over the next three years, largely funding the cost savings programme.  We have started with €10 million net proceeds in 2012/13 and we expect to continue the programme at a similar rate in 2013/14.

Conclusion

A new focus at the heart of our Group - 'Nouvelle Confiance' - is restoring shareholder value by eliminating losses at our non-core businesses, strengthening our core businesses from our market leadership and developing growth initiatives, and by improving efficiencies in the cost base.

These plans have allowed us to recommend maintaining our current dividend this year and, subject to trading, over the medium term having regard for an appropriate capital structure and shareholder returns, to adopt a dividend policy reflecting the progress we make as we execute our plans.

Outlook

The year ahead will be challenging and we anticipate that market conditions and product mix will continue to put pressure on margins. We aim to mitigate this through our cost saving programmes which, given the implementation timeframe, we expect to be more weighted to the second half.

Over the medium term, our review of the business has identified plans that will deliver an improvement in earnings and we will deliver these through the '4Ds' - Driving trading, Digitalising Darty, Developing the brand and Delivering cost efficiency.

GROUP OVERVIEW

Results

* Datart and Darty Turkey.

** Continuing Group, excluding Darty Italy.

Financial review

Revenue and retail profit

Group revenue at €3,802.8 million, was down 2.4 per cent on a reported basis and 2.5 per cent in constant currency. Excluding the impact of the sale of Darty Telecom in July 2012, total revenue was down 0.7 per cent. On a like-for-like basis Group revenue fell by 1.1 per cent, with a deterioration in trading conditions and increase in competitor promotional activity through the year. We saw significant growth in Multimedia and Communications and, to a lesser extent, White Goods. Vision volumes however remained very weak, particularly in France. We continue to grow web-generated sales successfully with overall growth of 11 per cent, now representing over 12 per cent of total product sales.

Gross margin saw an improving trend through the year aided by the new Darty Telecom agreement, but overall declined by 90 basis points for the period. This reflected ongoing product category margin pressure in challenging and promotional market conditions, alignment of store and web prices and strong performance of lower margin Multimedia and Communications in the sales mix.

Total costs were down €25 million, 2 per cent, largely reflecting a staff FTE reduction of over 300, as we start to see the benefits of our cost reduction programmes. This reduction however was insufficient to off-set revenue and gross margin pressures. EBITDA was €103.8 million (2012: €176.6 million) and group retail profit for the period was €38.7 million compared to €89.8 million for the same period last year. Excluding Spain, EBITDA was €119.8 million and retail profit was €55.7 million.

Net interest

The net finance cost increased to €12.3 million (2012: €11.1 million), principally comprising interest on borrowings of €10.1 million (2012: €11.7 million) and IAS 19 pension interest of €2.2 million (2012: €2.2 million). The €2.2 million increase on the prior year was largely due to the increase in net debt following the disposal of Comet in February 2012. The net finance cost excluding IAS 19 pension interest is expected to be circa €12 million for 2013/14.

Adjusted profit before tax

The adjusted profit before tax was €26.4 million (2012: €78.7 million). Adjusted profit before tax excluding Spain was €43.4 million (2012: €94.2 million).

Exceptional items

During the period, exceptional items before tax for the Continuing Group of €115.3 million (2012: €34.6 million) were incurred relating to the closure of Darty Spain, asset impairments and restructuring charges.

Darty Spain's assets were impaired by €10.8 million and restructuring and other costs were incurred and provisions made of €30.9 million for the managed closure of the business. In addition, fees totalling €0.4 million have been accrued at Head Office relating to the closure.

Asset impairment reviews have identified exceptional impairments totalling €49.2 million. These related to intangible asset impairments in France and asset impairments in the Netherlands and Turkey due to recent performance.

Part of our programme to rationalise functions between Darty Group and Darty France resulted in costs of €19.1 million, with a further €2.9 million incurred to restructure Darty Turkey. In addition, as a result of Comet entering into administration, Darty France incurred losses of €1.3 million for trading receivables being written down and Head Office incurred €0.8 million relating to other related losses and costs.

A profit of €7.4 million was recorded on the sale of Darty Telecom to Bouygues Telecom, which completed on 24 July 2012.

In the period, cash costs of these exceptional items were €12.8 million, excluding the cash inflow from the sale of Darty Telecom of €39.1 million. A further €45 million cash costs from these exceptional items is expected in 2013/14 including the €30 million for the managed closure of Darty Spain.

Profit before tax

As a result of the exceptional charges of €115.3 million detailed above, the reported loss before tax was €72.5 million (2012: profit €38.6 million).

Taxation

The effective tax rate on adjusted profit before exceptional items, including the share of joint venture and associates' tax, was 62.5 per cent (2012: 34.9 per cent). Increased losses in the Other businesses and Darty Spain, on which no tax relief is recognised, have contributed to the increased tax rate, which is sensitive to changes in geographical mix of profits and losses. The effective tax rate on adjusted profit before exceptional items for 2013/14 is expected to be around 40 per cent.

The overall tax rate was (5.4) per cent (2012: 59.0 per cent). An increase in exceptional items and losses in the Other businesses and Darty Spain, in which there is limited tax relief, have contributed to the overall tax rate rising compared to last year.

Profit for the year

The loss for the year from continuing operations was €75.7 million (2012: profit €16.2 million). Loss for the year from discontinued operations was €29.6 million (2012: loss €330.1 million). Total loss for the year was €105.3 million (2012: loss €313.9 million).

Earnings per share

Adjusted earnings per share was 2.5 cents (2012: earnings per share 10.0 cents) and continuing basic diluted loss per share was 13.8 cents (2012: continuing earnings per share 3.4 cents). Adjusted earnings per share excluding Spain was 5.6 cents.

Cash flow

Free cash inflow5 was €1.2 million (2012: €154.0 million outflow). Cash generated from operations was an inflow of €20.0 million (2012: €83.8 million) largely reflecting the lower retail profit. Net capital expenditure was €53.5 million (2012: €99.1 million), before the €39.1m received for the new Darty Telecom agreement. With lower cash tax payments of €3.1 million (2012: €54.4 million) and a lower dividend payment to shareholders of €11.2 million (2012 €37.0 million), net cash outflow was €20.6 million (2012: €253.5 million).

Excluding the cash flow and exceptional cash costs of disposing of the Darty Italy operations and managed closure of Darty Spain totalling €40.6 million, there was a cash inflow of €20.0 million.

Net debt

Closing net debt was €150.6 million compared to €126.5 million on 30 April 2012. As at 30 April 2013 €220 million of the Group's €455 million revolving credit facility was drawn down (30 April 2012: €220 million).

Retirement benefit obligations

The IAS 19 net pension liability increased from €69.6 million to €80.7 million, split €40.4 million (2012: €40.0 million) in the UK and €40.3 million (2012: €29.6 million) in France. The increase in the defined benefit obligation in the France schemes is mainly due to the lower discount rates.

Dividends

The Board is recommending a final dividend of 2.625 cents per share. The final dividend date will be 11 September 2013, the record date will be 13 September 2013 and the payment date will be 4 October 2013.

Discontinued operations

Darty Italy has been reclassified as a discontinued operation following the disposal of the operations to DPS in March 2013. The prior year comparatives have been restated accordingly.

5 Free cash flow defined as cash generated from operations and net sale of business operations and subsidiary less net capital expenditure.

BUSINESS REVIEW

Darty France

* EBITDA is defined as retail profit before depreciation and amortisation and profit/(loss) on disposal of property, plant and equipment and

 intangible assets including write-offs.

At Darty France total revenue was down 4.0 per cent and by 1.8 per cent on a like-for-like basis. Excluding the impact of the new Darty Telecom agreement that completed towards the end of the first quarter total revenue was down 1.5 per cent, ahead of a market estimated to have declined by 3.5 per cent. At a product category level, growth in White Goods, Multimedia and Communications was more than off-set by the continued weak Vision market.

With 120 million visits over the year to Darty.com, web-generated sales at well over €300 million continued to outperform the market, growing by 10 per cent to over 13 per cent of total product sales. Market share of Major Domestic Appliances sales is now at 23 per cent, "Click and collect" grew 20 per cent and 7 per cent of web sales were transacted using mobile phones. Towards the end of the period a dedicated services and subscription section was introduced to the Darty.com website and a new social media website, www.36000solutions.com, was launched allowing users to interact with, and benefit from, the Darty expert advice and solutions. The website won the 'Favori' customer award for the best website in its category. Darty's continually improving cross-channel offer was also supported with the receiving of the Research Q&A Consultancy award for best electrical and multimedia retail network, the "IMC" award for best cross-channel retailer and the "Images d'or" award for expert photo retailer.

Gross margin was down 20 basis points for the year. Product margin continued to be under pressure from competitive market conditions and ongoing price alignment. However, the overall gross margin trend improved through the period against a weaker comparative and benefitting from a greater contribution from the new Darty Telecom agreement.

Total costs reduced by €21 million, over 2 per cent, more than off-setting inflationary pressures and new space increases. Significant efficiencies have been made to the store back office and after sales service operations with a reduction in over 250 FTEs. However, these cost measures were insufficient to compensate for the fall in revenue, and gross margin erosion in the period, leading to a decline in retail profit to €74.3 million compared to €106.8 million in the prior year. EBITDA was €118.5 million (2012: €168.3 million) reflecting the reduction in retail profit and reduced depreciation and amortisation following the new Darty Telecom agreement.

During the period Darty opened three new stores and closed three stores. One store was relocated and three refurbishments/extensions were completed. A similar level of activity is planned for 2013/14 with the number of stores remaining broadly unchanged. The successful in store kitchen offer was rolled out to a further eight stores in the period, bringing the total to 48, with an additional five planned for 2013/14. An authorative range of over 20 kitchens can be displayed in an average 350 sqm of selling space within the larger stores in the portfolio. Total kitchen orders are now running at around 10,000 per year.

The new telecom agreement with Bouygues completed on 24 July 2012 with Darty editions of the Bbox offers introduced to all stores and the web site. Both new and existing subscribers continue to be provided with Darty's market leading service support, including phone assistance 24 hours a day / seven days a week and home assistance as necessary within 48 hours.

After the period closed, the three loss making stores in Luxembourg were sold to a local trade buyer.

* EBITDA is defined as retail profit before depreciation and amortisation and profit/(loss) on disposal of property, plant and equipment and

 intangible assets including write-offs.

At Vanden Borre in Belgium and BCC in the Netherlands, total revenue increased by 4.7 per cent and by 3.8 per cent on a like-for-like basis. Vanden Borre, with its strong service position in the market, continued to take significant share across most product categories and resisted well against increased competitor promotional activity as the year progressed. In the second half of the year BCC further improved its proposition with the introduction of an enhanced service offering of the roll-out of free delivery which supported sales and market share gains in a very promotional market. Overall, web-generated sales grew over 20 per cent to over 9 per cent of total product sales.

Strong growth of Communications and Multimedia in the sales mix had a negative impact on gross margin in both markets. This together with general market conditions, particularly in the Netherlands where free delivery was introduced, resulted in overall gross margin being down 230 basis points.

With three additional stores compared to last year and service investment at BCC, total costs increased by 2.5 per cent. This coupled with the gross margin pressure saw retail profit fall to €7.5 million compared to €19.2 million in the prior year and EBITDA fall to €19.5 million (2012: €32.3 million), despite a resilient performance at Vanden Borre.

Overall a further two new stores are planned for 2013/14, plus one closure and four refurbishments.

Other businesses - Datart and Darty Turkey

* EBITDA is defined as retail profit before depreciation and amortisation and profit/(loss) on disposal of property, plant and equipment and

 intangible assets including write-offs.

At our Other businesses, Datart in the Czech Republic and Slovakia and Darty Turkey, revenue fell by 3.3 percent in constant currency and by 7.0 per cent on a like-for-like basis.

Datart was awarded the MasterCard Electrical Retailer of the Year award but conditions in the Czech Republic were challenging throughout the year. In Turkey total sales declined on a like-for-like basis reflecting a very competitive, discount driven, market, together with the business's focus on margin. Overall, web-generated sales grew by 6 per cent to over 16 per cent of total product sales.

Gross margin saw an improving trend in Turkey but overall for the segment was down 150 basis points for the period, impacted by an adverse sales mix from strong growth in lower margin Multimedia, increased promotional activity in the Turkish market and generally challenging conditions in the Czech Republic. As a result the overall retail loss for the segment increased from €5.5 million to €14.1 million and EBITDA fell to €(8.0) million (2012: €1.1 million).

In the period the store portfolio continued to be improved with the closure and/or refurbishment of underperforming stores. In Turkey, there were two openings and four closures and a further five openings and three closures are planned for 2013/14. Datart opened one new store, completed two refurbishments and closed two stores over the period and four further refurbishments are planned for 2013/14.

Darty Spain

* EBITDA is defined as retail profit before depreciation and amortisation and profit/(loss) on disposal of property, plant and equipment and

 intangible assets including write-offs.

In Spain the sales performance outperformed the market but, with pressure on gross margins and a sub-scale business, no reduction in retail loss was achieved for the year. EBITDA was €(16.0) million (2012: €(11.4) million).

A managed closure of the business was commenced on 4 April 2013 and the stores ceased trading in June. The managed closure of the business is expected to cost circa €30 million. This will be a cash cost incurred in the year to 30 April 2014. In addition for the 2013/14 financial year there will be an expected retail loss of circa €5 million for the final two months of trading.

BOARD CHANGES

David Newlands retired as Chairman on 9 August 2012 and was succeeded by Alan Parker. Thierry Falque-Pierrotin, Chief Executive left the Group on 4 January 2013 and was succeeded by Regis Schultz on 23 April 2013. On 13 September 2012, Non-Executive Director, Andrew Robb retired at the Annual General Meeting. On 15 October 2012, Antoine Metzger and Pascal Bazin were appointed as independent Non-Executive Directors. On 30 October 2012, Agnès Touraine and Carlo D'Asaro Biondo were appointed as independent Non-Executive Directors and Non-Executive Director Bernard Dufau retired from the Board on 31 December 2012. Eric Knight was appointed a Non-Executive Director on 22 February 2013.

a) The notes on pages 24 to 40 form part of this financial information.

b) Restated following the sale of the Italian operations, now classified as discontinued operations.

 1 Accounting policies

The new commercial agreement for Darty Telecom completed on 24 July 2012, from which date subscription based revenues were replacedwith new revenues determined on a cost plus basis for customer service agreements and brand royalty income. All such revenues have beenincluded within service revenue.