Seat PG: Riccardo Perissich appointed as Chairman. Results for the first half of 2002 approved

09/04/2002 - 00:00 PM

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SEAT PG GROUP
• Consolidated revenues amounted to Euro 871 million (+ 5.5% compared to the first half of 2001)
• Gross operating profit amounted to Euro 209 million (+46% compared to the first half of 2001)
• Operating profit before goodwill was about Euro 108 million (+113% compared to the first half of 2001)
• Debt decreased to Euro 784 million (Euro -138 million compared to year-end 2001)
• Net result: net loss was sharply reduced to Euro -14 million (Euro -77 million in the first half of 2001).

SEAT PAGINE GIALLE S.p.A
• Revenues: Euro 409 million (+5.2% compared to the first half of 2001)
• Gross operating profit: Euro 209 million (+17.7% compared to the first half of 2001)
• Operating income: Euro 100 million (+30.7% compared to the first half of 2001)

The Board of Directors of Seat Pagine Gialle, met today in Rome and, following the resignation of Mr. Enrico Bondi from his posts as Chairman and member of the Board of Directors, replaced him by co-opting Mr. Riccardo Perissich, appointing him Chairman. The Board expressed its sincere gratitude to Mr. Bondi for his work on behalf of the company.
The Board of Directors also approved the Group’s half-year report for 2002.

Despite the particularly difficult situation of the Italian advertising market that declined more than 4%, consolidated revenues topped Euro 870 million, up 5.5% compared to the first half of 2001*, equal to a growth of 2.6% based on the same consolidation area.

During the six-month period, the management focused on enhancing efficiency, streamlining the structure and businesses and developing synergies among different business areas. In fact, all areas, including the internet business area, reached a gross operating profit, with the only exception of the TV area, which is still undergoing a streamlining and relaunching phase.
Consolidated gross operating profit increased, reaching Euro 209 million, up 46% compared to Euro 143 million in the period from January-June 2001*, and a ratio of about 24% to revenues (17% in the first half of 2001).

Consolidated gross operating income before amortization of goodwill was about Euro 108 million (+113% compared to the first half of 2001*). Operating income was also positive for Euro 19 million, compared to the loss of Euro 42 million posted in the first half of 2001*.
A significant operating improvement is expected for this financial year compared to the previous year, with a further acceleration in the second half of the year thanks to the seasonality of the Directories Area, which generates over 60% of revenues in the second half of the year.
After net financial expenses of Euro 43 million, the consolidated statement of income closed with a pre-tax result negative by Euro 40 million. This is a significant improvement compared to a loss of Euro 98 million in the first half of 2001. Net loss attributable to the Group amounted to Euro 14 million (77 million in the first half of 2001).
Operating free cash flow reached Euro 122 million (Euro -258 million in the first half of 2001), significantly contributing to reducing consolidated net financial debt to Euro 784 million, compared to Euro 922 million at the end of 2001.

Work continued to achieve a leaner corporate structure for the Group. As a result, the number of operative companies dropped from over 200 to 143. In the first six-month period, after the transfer of Mondus, several stakes in the Internet business were also divested. After the end of the six-month period, in July and August the sale of Datahouse and of the stake held in the closed-end investment fund Wisequity were finalized. The financial effects of these most recent transfers will be reflected in the report for the second half of the year.
At the end of the six-month period Group personnel decreased from 9264 at December 31, 2001 to 8300.

* The statement of income for the first half of 2001 was reclassified to adapt it to the format used by the Telecom Italia Group, including among operating costs several one-time expenses that were previously entered below the operating results. Due to the adoption of this new format, the consolidated gross operating profit for the first half of 2001 thus came to Euro 143.5 million (compared to Euro 151.4 million reported in the half-year report of the Seat Pagine Gialle Group for 2001), operating profit before the amortization of goodwill came to Euro 50.7 million (as opposed to Euro 64 million) and the operating result came to a negative Euro 41.8 million (against a loss of Euro 32.6 million).
These differences are merely a result of the reclassification of the statement of income and were thus perfectly offset by reduced financial expense and reduced charges for extraordinary items.

Seat Pagine Gialle S.p.A.

Revenues of Seat PG S.p.A. for the first half of 2002 were Euro 459 million (+5.2% compared to the first half of 2001). Gross operating profit was Euro 209 million, up 17.7% compared to the same period of the previous year, with a ratio of 45.3% to revenues (40.6% in the first half of 2001). Operating income was Euro 100 million, up 30.7% (Euro 77 million in the first half of 2001), whereas net result was negative by Euro 8 million (in the first half of 2001 the loss amounted to Euro 64 million).

Performance of the Business Areas

The difficult trend of the advertising market did not prevent the Directories area from posting sales of approximately Euro 456 million, up 4.6% compared to the same period in 2001. This marks a significant improvement in profitability, with an increase in gross operating profit from 46% to 51%. The growth of Pagine Gialle On Line and of the recently marketed products, as well as the 5.8% increase in revenues posted by Thomson – due largely to the development of its customer base – are especially important.
The streamlining process of the Internet businesses and the development of ADSL services made it possible for the Area to generate a gross operating profit (about Euro 1 million for the six-month period) for the second consecutive quarter, despite the advertising costs tied to the launch of the new range of Internet access products. Seat is the only Internet operator listed on the stock exchange that succeeded in achieving this result. Based on comparable terms (taking into account that some of the companies that have been divested or are being divested were excluded from the consolidation area for 2002), revenues are essentially stable compared to the first half of 2001 and amount to Euro 66 million. At the end of June, active users at 45 days reached the number of 1.98 million (274,000 of them are ADSL subscribers), and the preliminary results of the launch of Virgilio Presenza and PG Net – the new products offering space on the Virgilio search engine for a fee – were satisfactory.
Revenues in the Office Products & Services area (Gruppo Buffetti) for the first half of the year amounted to Euro 147 million, up 16% compared to the first half of 2001 (in comparable terms, this item increased by about 12%), while revenues reached Euro 41 million (+8%) in the Television area (La7 – MTV Italia), Euro 79 million (-3.9%) in the Directory Assistance area, and Euro 80 million (+25% as a result of the expanded consolidation area) in the Business Information area.

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Significant choices for Corporate Governance

In keeping with the decision of the parent company to strengthen its Rules of Corporate Governance to make them even more efficient and aligned with the best international practices and the new regulations issued by the Regulator, the Board of Directors has approved a set of behavioral principles concerning the procedures for conducting operations with correlated parties, first and foremost the directors and statutory auditors. The principles also cover intra-group transactions.
These principles of behavior focus in particular on guaranteeing effective fairness as well as procedural and essential transparency in this area, while also ensuring the joint responsibility of the entire Board of Directors in its decision-making process.
At the same time, a specific procedure was followed to formalize the internal regulations – as provided for by Article 150, paragraph 1, of the T.U.F. (Consolidated Financial Act) – for obtaining the most detailed information on operations with correlated parties, the most important economic, financial and equity transactions, and any atypical or unusual operations, and then submitting this information to the Board of Statutory Auditors.
The procedures and principles will be detailed at the Website http://www.seat.it/.

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On Thursday, September 5 at 2.30 pm (Italian time), a conference call will be held to present half-year results of the Group and of the Parent Company to the financial community.
Journalists can attend the conference call by calling the number:

06 33168   (from Italy)       
+39 06 33168   (from abroad)

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