Virgin Stores: modeFinance Credit report

Wednesday, 09 January 2013

VIRGIN STORES

MORE Credit Rating

C

D

CC CCC

B

BB BBB

A

AA AAA

key

If you want to know more, ASKMORE modeFinance’s credit report.

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Almost every day millions of people around the world are wondering the real creditworthiness of the companies with which they are in business. Every day these questions remain unanswered. modeFinance now aims to answer these questions in a simple, complete and immediate way.

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VIRGIN STORES

Identification number

FR344260286

Country

France

ZIP code and city

75008 - PARIS

Address

52 AVENUE DES CHAMPS ELYSEES +33 1 49535027 www.virginmegastore.fr Not available

Legal form

Limited company management

Account

Unconsolidated

Incorporation date

1988/02/24

NACE 2 Sector

4763 - Retail sale of music and video recordings in specialised stores

TM

ASKMORE is the modeFinance product which gives the chance to evaluate the credit risk for every company from all around the world.

ASKMORE

Company name

Listed Status

Active

MORE Credit limit

1,700,000 e

plans 3 types of reports:

Turnover (th e) Rating s-peek

TM

ASKMORE Basic: This report includes modeFinance ’ s MORE Credit Ratings and MORE Credit Limit to help you in the decision making.

It covers all essential information including financial statements of the last three years and descriptive information including trade description and sector analysis.

This report type is ideally suited for decisions on transactions with each level of credit risk.

31/12/2009

31/12/2008

341,689

354,612

373,000

CCC

CCC

B

19.00%

19.00%

6.00%

100%

100%

100%

Leverage ratio

4.18

8.53

6.15

Total asset/Total liabilities

1.24

1.12

1.16

Current Ratio

1.05

0.96

1.13

Quick Ratio

0.61

0.55

0.67

Probability of default

Plus

Basic

31/12/2010

Confidence Level

TM

Solvency ratios

Liquidity ratios

Profitability and economic equilibrium ratios Return on investement ROI (%)

-0.20

-3.07

-0.39

Return on equity ROE (%)

-6.25

-47.45

36.76

1.96

1.89

1.82

Interest paid weight

-6.59

-0.34

-2.29

EBITDA/Sales

-0.01

0.00

0.02

EBIT interest coverage ratio

-3.61

-3.42

0.20

EBITDA interest coverage ratio

-0.94

0.23

4.10

Asset turnover

Interest Coverage ratios

Analysis and trend of financial strength modeFinance Headquarter Building A - AREA Science Park Padriciano 99 - 34149 Trieste - Italy Ph.: +39 040 375 5337 Fax: +39 040 375 6741 info@modefinance.com TM

key askMORETM is a registered mark of modeFinanceTM

MORE Credit Rating

D not available

non return

C

CC

extremly pathological pathological

CCC

B

BB

BBB

A

AA

AAA

high danger

weak

sufficient

adequate

good

very strong

extremely strong

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Sector Analysis Company

Healthy

Balanced

Vulnerable

Risky

Solvency ratios Leverage ratio

4.18

0.66

2.44

6.48

-3.07

Total asset/Total liabilities

1.24

2.53

1.41

1.11

0.91

Current Ratio

1.05

2.07

1.21

0.98

0.69

Quick Ratio

0.61

1.37

0.69

0.45

0.28

Return on investement ROI (%)

-0.20

17.97

7.44

2.05

-10.48

Return on equity ROE (%)

-6.25

21.67

15.47

0.75

-84.02

Asset turnover

1.96

2.74

2.70

2.19

2.80

Interest paid weight

-6.59

0.01

0.11

0.26

-0.11

EBITDA/Sales

-0.01

0.07

0.04

0.02

-0.02

EBIT interest coverage ratio

-3.61

159.80

8.08

1.15

-7.25

EBITDA interest coverage ratio

-0.94

147.10

13.42

3.05

-3.71

Days Sales Of Inventory (DIO)

54

22

26

34

30

Days Sales Outstanding (DSO)

20

4

7

8

4

Days Payable Outstanding (DPO)

87

18

26

34

40

Cash Conversion Cycle (DIO + DSO - DPO)

-13

18

13

12

-2

-

11,419

28,960

14,271

5,240

CCC

A

BB

B

CC

Liquidity ratios

Profitability and economic equilibrium ratios

Interest Coverage ratios

Cash Conversion Cycle (days)

Numer of analyzed companies (Average) Rating

The sector has been chosen according to: international companies in the sector NACE 2 47 with financial data of year 2010.

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

key

Sector Analysis - Graphs

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Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

AA AAA

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

C

D

CC CCC

B

BB BBB

A

AA AAA

key

Balance Sheet BALANCE SHEET (th e)

31/12/2010

31/12/2009

31/12/2008

Accounting practice

Local GAAP

Local GAAP

Local GAAP

Exchange rate EUR - EUR

1

1

1

Number of months

12

12

12

Total assets

169,064

179,907

198,973

Fixed assets

46,925

50,718

50,458

Intangible fixed assets

23,633

24,126

23,712

Tangible fixed assets

17,512

20,637

20,754

5,781

5,955

5,992

122,139

129,189

148,515

Stocks

51,001

54,733

60,686

Debtors

18,906

20,340

30,099

Other current assets

52,232

54,115

57,730

20,882

21,989

22,677

Shareholders funds

32,627

18,885

27,846

Capital

22,700

42,336

42,336

9,927

-23,451

-14,490

136,437

161,021

171,128

Non current liabilities

20,199

26,714

39,485

Long term debt

17,430

25,318

12,500

2,768

1,396

26,985

116,239

134,308

131,643

Other fixed assets Current assets

Cash & cash equivalent

Other shareholders funds Total liabilities

Other non-current liabilities Current liabilities

1,438

14,133

387

Creditors

81,499

83,617

96,410

Other current liabilities

33,302

36,557

34,846

169,064

179,906

198,973

31/12/2010

31/12/2009

31/12/2008

Loans

Total shareh. funds & liab.

NET DEBT (th e) Short term debts

1,438

14,133

387

Long term debt

17,430

25,318

12,500

Cash & cash equivalent

20,882

21,989

22,677

Net debt

-2,013

17,461

-9,791

31/12/2010 Working capital Net Current Assets

31/12/2009

31/12/2008

-11,592

-8,544

-5,625

5,900

-5,119

16,873

31/12/2010

31/12/2009

31/12/2008

Days Sales Of Inventory (DIO)

54

56

59

Days Sales Outstanding (DSO)

20

21

29

Days Payable Outstanding (DPO)

87

86

94

-13

-9

-6

Cash Conversion Cycle (DIO + DSO - DPO)

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

C

D

CC CCC

B

BB BBB

A

AA AAA

key

Income Statement INCOME STATEMENT (th e)

31/12/2010

31/12/2009

31/12/2008

Accounting practice

Local GAAP

Local GAAP

Local GAAP

Exchange rate EUR - EUR

1

1

1

Number of months

12

12

12

Sales

330,775

340,698

361,708

-3

-6

-

10,914

13,914

11,292

Operating revenue / turnover

341,689

354,612

373,000

Total costs

343,725

354,180

365,761

Costs growth (%)

-3

-3

-

Service costs

73,236

73,631

71,847

Material costs

227,316

238,114

251,928

43,173

42,435

41,987

-2,036

432

7,239 6,883

Revenues growth (%) Other revenues +/- variation in inventories and contract in progress + Fixed assets own construction capitalized

Costs of employees EBITDA Depreciation

5,806

6,793

-7,842

-6,361

356

5,337

-1,025

-2,893

Financial revenue

9,240

2,209

1,666

Financial expenses

3,903

3,234

4,560

2,175

1,858

1,766

-2,505

-7,386

-2,537

459

-1,587

12,762

Extr. and other revenue

5,754

1,035

35,373

Extr. and other expenses

5,294

2,622

22,610

-2,046

-8,973

10,225

-8

-12

-10

-2,038

-8,961

10,235

EBIT Financial P/L

Interest paid P/L before tax Extr. and other P/L

P/L before tax + Extr. and other P/L Taxation P/L for period

31/12/2010 Cash flow

31/12/2008

3,768

-2,168

17,118

49,109

42,113

60,860

31/12/2010

31/12/2009

31/12/2008

Added value

Number of employees

1,326

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

31/12/2009

1,326

1,486

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

key

Evolutions and trends

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

AA AAA

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Qualitative information Full overview

It is a private limited company primarily engaged in the retail trade of records, books, video and other related products. Since Sir Richard Branson opened Virgin’s first record store in 1971, focus has been on delivering market leading products and quality customer service to shoppers across the globe, making Virgin one of the world’s successful entertainment retailers. The company has a registered office located in Paris, France. It also offers computer hardware, clothing and even musical instruments - easily - transportable, high - value goods which are also popular theft - prone lines. The company has one of the biggest collections of music, film and games available on the high street. Products sold here are not just Virgin branded items. Its stores have a wide selection of CD’s, games, books, DVD’s, vinyl LPs, mp3 players, magazines, accessories and additional products, such as calenders and board games. Virgin Mobile products can also be found in separately run Virgin Mobile Concessions within most Virgin Megastores. Some stores also house cafes/coffee shops run by external companies.

History

Opened by Sir Richard Branson.

Primary business line

Engaged in the retail trade of records, books, video and other related products.

Secondary business line

Offers computer hardware, clothing and even musical instruments - easily - transportable, high - value goods which are also popular theft - prone lines.

Main activity

Retail.

Secondary activity

Not available.

Main products and services

CD’s, games, books, DVD’s, vinyl LPs, mp3 players, magazines, accessories and additional products, such as calenders and board games.

Size estimate

Not available.

Strategy, organization and policy

Not available.

Strategic alliances

Not available.

Membership of a network

Not available.

Main brand names

Virgin.

Main domestic country

France.

Main foreign countries or regions

Not available.

Main production sites

Not available.

Main distribution sites

Not available.

Main sales representation sites

Not available.

Main customers

Not available.

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Auditor/Advisor/Bank name

type

address

GRANT THORNTON

Auditor

-

STE BARBIER FRINAULT ET AUTRES INSTITUT DE GESTION ET D’EXPER NATIXIS - AG SIEGE SOCIA

Auditor Auditor Banker

-

Board name

date of birth

nationality

function

Mrs. Christine Mondollot Mrs. Laure Hauseux

30/08/1954 -

-

Chairman of the executive board Member of the executive board

Sharehoders (the first twenty shareholders ordered by Direct %) Rating:

VSSA HOLDING Country ISO code NACE Rev. 2, Core code Direct % Total % Address : Not available

Operating Revenue (MIL $) Total Assets (MIL $) Number of Employees Information date

FR

Operating Revenue (MIL $)

Rating:

BUTLER CAPITAL PARTNERS Country ISO code NACE Rev. 2, Core code Direct % Total % Address : Not available

-

FR 99.00 -

-

B

Total Assets (MIL $) Number of Employees Information date

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

0.42 0.19 0 2012/02

6.33 13.7 14 2012/12

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Subsidiaries (the first twenty subsidiaries ordered by Direct %) VIRGINMEGA Country ISO code NACE Rev. 2, Core code Direct % Total %

FR 100.00 100.00

NACE Rev. 2, Core code Direct % Total %

NACE Rev. 2, Core code Direct % Total %

NACE Rev. 2, Core code Direct % Total %

-

Operating Revenue (MIL $)

99.00 -

Total Assets (MIL $) Number of Employees Information date

FR 99.00 -

Rating:

-

Operating Revenue (MIL $)

3.22 1.02 48 2012/02

Rating: FR

A

Operating Revenue (MIL $)

34.00 -

Total Assets (MIL $) Number of Employees Information date

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3.2 1.33 2012/02

Total Assets (MIL $) Number of Employees Information date

DISTICKET Country ISO code

3.34 6 2012/02

Rating: FR

VIRGIN CAFE Country ISO code

6.32

Total Assets (MIL $) Number of Employees Information date

VIP 400 Country ISO code

Rating: Operating Revenue (MIL $)

0 6.37 2012/02

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

ASKMORE rating guide General vision

A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk factors.

The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial companies by using data included in financial statements.

The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the model are obtained by applying newly developed numerical methodologies, drawing together financial theory, data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective algorithm that produces a classification of each company, by taking into account any attributes (such as sector and country) characterizing a firm.

The model gives the opportunity to assign a rating to a company even without considering a complete data analysis and allows to process quality information. It induces a better understanding of a company’s strength and weakness thanks to sophisticated data mining tools and taking into account the analyst knowledge.

The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium between the different aspects, better will be the final rating.

This is done studying, evaluating and aggregating the most important sections of the financial and economic behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.

modeFinance srl VAT number 01168840328 info@modefinance.com www.modefinance.com TM

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Rating scale Rating class

Rating macro class

The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent

AAA

AA

Assessment

economic and financial flow and fund equilibrium.

Healthy

The company has very strong creditworthiness. It also has a good capital structure and economic and financial equilibrium. Difference from AAA is slight.

The company has a high solvency. The company is however more susceptible to the adverse effects of changes in

A

circumstances and economic conditions than companies in higher rated categories.

Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial commitments could be affected by serious unfavourable events.

BBB Balanced

A company rated BB is more vulnerable than companies rated BBB. Furthermore the company faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions.

BB

The company presents vulnerable signals with regards to its fundamentals. Adverse business, financial, or economic

B

conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments.

Vulnerable

CCC

A company rated CCC has a dangerous disequilibrium on the capital structure and on its economic and financial fundamentals. Adverse market events and an inadequate management could affect with high probability the company’s solvency.

CC

The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the company’s strong disequilibrium could increase.

Risky

C

The company shows considerable pathological situations. commitments is very low.

D

The company has not any longer the capacity to meet its financial commitments.

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The company’s capacity to meet its financial

Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Fundamental Credit Rating Ratios Analysis area

Ratio

Assessment This measures the level of total liabilities of the company in comparison

Leverage ratio

with equity.

Solvency ratios

Financial ratios

Assets to debt

This indicates company’s solvency. The company shows a level of deficit when the value of this ratio is under one unit.

Fixed Assets coverage ratio

This is calculated only for holdings. It measures the capital structure i.e. whether a company covers the fixed assets with long term capital.

Current ratio

This measures whether a company has sufficient short-term assets to cover its short-term liabilities.

Liquidity ratios This compares current liabilities only to those assets that can be readily

Quick ratio

turned into cash.

Return on Investement(ROI)

This measures the profitability of company investments without regard to the way the investment is financed.

Return on Equity(ROE)

This measures the profitability of the equity.

Asset turnover

This indicates the investments turnover with regards to sales. The level assumed from the ratio depends on the sector in which the company operates.

Profit margin

This indicates the profitability of sales.

Interest Paid coverage

This indicate the ability of the company to cover interest expenses through the economic margins (Gross profit and EBIT) and through the cash flow from operating activities.

Profitability and economic ratios

Interest coverage ratio

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Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

MORE Credit Limit, Probability of default and Confidence Level MORE Credit Limit

MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial relationship with the analyzed company with an outlook of one year. modeFinance used the following values associated with the company analyzed while computing the credit limit:

• Size; • Years in Business; • Average number of suppliers; • Liquidity of the company and the comparison with its sector; • The funds dedicated to be paid to suppliers; • The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).

The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual public data. This value should be reviewed by paying attention to the Confidence Level value and by using other information such as other business information, news... etc; and private information such as the relationship with client, history of payments, guarantees and the knowledge of the sector.

Probability of default e Confidence Level

In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go into default.

As the probability of default is strongly affected by the economic climate that the company is operating in, companies in the same MORE class will not necessarily have the same probability of default.

The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:

Confidence =

P Available Information P Total Information

The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the MORE rating is able to take into account for each company.

For companies with fully populated records a confidence level of 100% would be applied: companies where no financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.

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Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741

VIRGIN STORES

Wednesday, 09 January 2013 MORE Credit Rating

D

C

CC CCC

B

BB BBB

A

AA AAA

key

Notes and disclaimer NOTES

modeFinance has based the present analysis on the company available financial statements, coming from one or more of the following sources: local providers, Commercial Register (Companies House), websites, modeFinance’s database etc.

DISCLAIMER

All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Contacts

Info web

modeFinance MORE rating AREA Science Park 34149 Trieste, via Padriciano 99 - ITALY info@modefinance.com www.modefinance.com

Phone

+39 040 3755337

Company Products Where

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Area Science Park, Padriciano 99. 34149 Trieste, Italy Tel. +39 040 3755337 Fax +39 040 3756741