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17 November 2009


3S maintains positive cash flow despite 10% annual revenue drop

For its fiscal year 2008/2009 (ended June 2009), 3S Photonics of Nozay, France, which manufactures laser chips, optical discrete modules and passive components for telecom networks, has reported revenue of €23.04m.

Despite the challenging worldwide economic and financial environment, this is down just 10% on fiscal 2008, compared to declines of about 30% for the firm’s main competitors, it is claimed.

Operating expenses were lower, in line with turnover. “Great efforts have been made to reduce our operating expenditure,” says chairman, president & CEO Alexandre Krivine. “At the end of the first quarter of our fiscal year 2010, our expenses are fully in line with our budget,” he adds.

Net income and cash flow has remained positive in 2009, without taking into account the funds raised in July from three investment funds (Fonds Stratégique d’Investissement, Alto Invest and Midi Capital), which are being devoted mainly to supporting the firm’s acquisition strategy. Equity capital has risen from €12m to €20m.

“Despite adverse economic conditions, we are pleased to sustain a healthy financial position with positive operating profit and a stable debt [which has been reduced in 2009],” says Krivine.

3S was deep in debt when, in April 2007, Alexandre Krivine and Didier Sauvage acquired what was Avanex France SA from optical communications component and module maker Avanex Corp of Fremont, CA, USA (which in 2003 had acquired what was then Alcatel Optronics). In two years, 3S recovered its financial stability by leveraging its existing product portfolio and diversifying to new segments of the telecoms market such as pump modules for terrestrial applications or transmission lasers for FTTH (fiber-to-the-home) and PON (passive optical networks).

3S says that it is resilient to the current economic situation due to its positioning in niche markets with strong added value or growth markets such as wavelength division multiplexing (WDM), long-term projects, and R&D activities partly financed by industrial partners.

In addition to demand provided by the market, 3S says that growth over the next few years will depend on merger & acquisition activities, facilitated by the funding from its new shareholders.

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