GOWEX : GOWEX exceeds its turnover forecast and reaches 182.8 million euros in 2013

PRELIMINARY CONSOLIDATED SALES 2013

GOWEX exceeds its turnover forecast and reaches 182.8 million euros in 2013

GOWEX has undergone organic growth of 60%: from €114.3 million in 2012 to €182.8 million in 2013

Both international sales and recurring revenue have enhanced their growth and consolidation.

The "Network Effect", the entrance of new operators and contracts in cities such as New York and San Francisco are the main reasons for this growth

Madrid, March 20th, 2014.GOWEX (GOW-MAB, ALGOW-NYSE Alternext, LGWXY-OTC Market), the leading firm in creating Wireless Smart Cities®,  has just publicised its Preliminary Consolidated Sales Figures for 2013 which are more than outstanding, a reflection of the good progress of this company specialising in creating Wi-Fi Cities. In 2013, GOWEX's turnover totalled 182.8 million euros, growth of 60% compared with 2012's figure.

GOWEX once again exceeds its own forecasts

This updated sales figure for GOWEX exceeds the company's own forecasts for 2013 by 7.53%: from the figure of 170 million euros projected by Jenaro García's team to the final figure of 182.8 million euros.
This figure consolidates the upward trend observed in the company's sales for the last few years: €66.7 million in 2011, €114.3 million in 2012 and €182.8 million last year. Great achievements such as those seen in Francisco and New York, the creation of We2 as the definitive boost for Social Wi-Fi and alliances with giants such as ZTE, AT&T and PCCW are just some of GOWEX's accomplishments in 2013 endorsed by these figures.

Consolidated Sales 2013  2013 2012 % Change 2013/2012 Share of total sales 2013 In million euros, at December 31st      GOWEX Telecom25.623.5 9% 14%       GOWEX Wireless157.290.8 73% 86%       Consolidated Sales182.8114.360%

See annex

Wireless Smart Cities®

Particularly of note is the development of the Wireless Smart Cities® business, GOWEX's flagship product that has transformed rapidly in a short space of time; going from a supply-driven product to one in great demand, especially among key cities that want to incorporate smart services quickly and effectively.

Thanks to this, the generation of recurring revenue from users, councils, advertisers, operators, associations, etc. has led to significant growth in turnover in the last year.

Turnover by business line

'GOWEX Wireless', the Group's main business line, achieved a total turnover of 157.2 million euros in 2013, an increase of 73% on 2012. Its share of the total revenue has also risen to 86%.

The turnover for the Group's historical businesses totalled 25.6 million euros, up by 9% on the previous year with a 14% share of the total sales. This figure, similar to the company's forecasts, is in line with the standard figures for a mature market.

About GOWEX (GOW-MAB, ALGOW-NYSE Alternext, LGWXY --OTC Market)

GOWEX has been operating in the telecommunications sector for 14 years and is currently leader in the creation of Wi-Fi Cities, providing Free and Premium Wi-Fi connectivity on the streets and on public transport. The company's reach currently extends to over 75 cities both nationally and internationally, thanks to agreements with public administrations, franchises, operators, associations and transportation companies.

In 2010 GOWEX become the first and only Spanish SME to achieve a "dual listing", on both the MAB (GOW) and Nyse-Alternext (ALGOW) stock exchanges. The company's overall turnover reached 114 million in 2012, which represents a 71% increase compared with 2011. In December 2012 GOWEX successfully finalised a capital increase in which it raised almost 18 million Euros, adding 1,528,404 new shares to the market. In February 2012, the SEC approved the launch of an ADR programme (American Depositary Receipt) allowing the Group to be quoted on the OTQXC market in the United States.

With offices in Madrid, Paris, Dubai, London, Buenos Aires, Shanghai and Costa Rica, GOWEX develops a sustainable business model in its Wi-Fi network, based on the efficiency and technical quality of its patented platforms: the Roaming Platform, which allows users to be freely connected in all cities, and the Advertising and Geo-localized Content Platform, which allows a financing system by means of advertising and marketing agreements.

In 2011 GOWEX joined the Wireless Broadband Alliance and was awarded with the Internet Day's prize for "Best Company". In 2013, the Company was awarded with the "Best New Listed Company" in the first edition of the "European Small &Mid-Cap Awards".

In 2014 GOWEX has been selected to be part of the "All Seen Alliance and has received from the Spain Government the START-EX award for its Wireless Smart City international business model strategy.

* APPENDIX: Intermediation
Recognition of income and expenses arising from mere intermediation activity of Gowex Telecom
The Board of Directors of Let's Gowex, S.A. in its meeting held on April 29th, 2010 agreed to conduct all negotiations, agreements, processes and procedures, both internal from the company and external to it, were necessary or appropriate in order to suppress the accounting and reporting of the amounts included in the items income and expenses arising from mere intermediation activity from Gowex Telecom.
The aforementioned activity from Gowex Telecom mainly corresponds to trading business in buying and selling telecommunications capacity services, wholesale.
Therefore there are going to be no longer recognized and accounted for in the profit & loss account, on one hand, expenditure on the purchase of the above services and intended for sale and on the other hand, revenues directly derived from such sale and amount equal to the expenses incurred on your purchase. Only recognized and accounted for, those involving value-added income to the Company and the fees charged by the intermediary services and, on the other hand, expenditure on cost of sales of value-added services.

Impact on financial statements
The impact that this decision has on the financial statements of the Company will be:
- In the Profit & Loss Account a decrease in sales revenue by the amount resulting from the non-recognition of accounting and concepts relating to capacity services and, correspondingly, a decrease in the cost of the same amount and capacity for such services.
- In the Balance will be reduced the amounts of outstanding balances and pending payments from customers and suppliers, respectively, by the amount of those operations whose income and expenses are no longer recognized and therefore be accounted for.
From the foregoing, gross margin in absolute terms obtained by Let's Gowex, S.A. in their ordinary activities will not be affected and from this, none of the rest of the magnitudes of the profit and loss account which depend on the gross margin, which is determined mainly by the net result of the sale of value-added services plus commissions earned by the brokerage services.
Moreover, the amount of Assets and Liabilities on the Balance Sheet from Let's Gowex, S.A. is reduced by the amount of the service concepts that have capacity and they were billed and have pending payment or charge.
Objective measurement
The objective of this decision is to adapt and align as far as possible, the economic flows to financial flows and vice versa from Gowex Telecom activity, providing, the financial information of the Company with clarity, comprehension in its reading and analysis; as well as a better match to the same reality that means the intermediary in the purchase and sales of telecommunications capacity in bulk (wholesale).
Degree of implementation and impact on the financial statements of 2013
The implementation and coordination of the decision reached by the Board in this matter is not immediate, since it requires a corresponding change in the contracts between Let's Gowex, S.A. and their customers and capacity providers, which is gradually being realized. The impact of this measure on sales of 2013 is reflected in the following table:

Gowex Group Consolidated (million €)2013GOWEX Telecom 2013GOWEX Wireless 2013 Net Revenues 182.8 25.6 157.2 Amounts not recognized in the figures of sales revenue and cost of sales. 29.3 29.3 0 If we recognize the amounts reflected in the table above 212.1 54.9 152.2 GOWEX exceeds its turnover forecast, 182.8 million euros in 2013


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Source: Gowex via Globenewswire
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