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04/12/2005 - 05:25 PM

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Enrico Parazzini illustrates Telecom Italia Media's strategic objectives for the period 2005-2007 (following the restructuring of the Internet sector) to the Financial community

SAFE HARBOUR


This press release contains statements that constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this press release and include statements regarding the intent, belief or current expectations with respect to our customer base, estimates regarding future growth in the different business lines and the global business, market share, financial results and other aspects of the activities and situation relating to the Company.
Such forward looking statements are not guarantees of future performance and involve risks and uncertainties that could significantly affect expected results and actual results may differ materially from those projected or implied in the forward looking statements as a result of various factors.
Analysts and investors are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of this press release. Telecom Italia Media Spa undertakes no obligation to release publicly the results of any revisions to these forward looking statements which may be made to reflect events and circumstances after the date of this press release, including, without limitation, changes in Telecom Italia Media Spa business or acquisition strategy or to reflect the occurrence of unanticipated events. Analysts and investors are encouraged to consult the Company’s Annual Report on Form 20-F as well as periodic filings made on Form 6-K, which are on file with the United States Securities and Exchange Commission.


ENRICO PARAZZINI ILLUSTRATES TELECOM ITALIA MEDIA’S STRATEGIC OBJECTIVES FOR THE PERIOD 2005 – 2007 (FOLLOWING THE RESTRUCTURING OF THE INTERNET SECTOR) TO THE FINANCIAL COMMUNITY

TI Media: expected average annual revenue growth of around 15-20% and net positive EBITDA in 2007 – the planned investment for the period amounts to €165 million (to be supplemented by financial resources totalling €250 million generated from sale of internet activities)

Television: expected annual revenue growth of 25-30%, and net positive EBITDA  in 2007

Major improvements expected also for APCom and Buffetti


 Enrico Parazzini, Managing Director of Telecom Italia Media, will today present the Group’s strategic objectives for the period 2005–2007, following the restructuring of the internet sector.

Foreword
On  April 4 2005, the Boards of Telecom Italia Media and Telecom Italia approved a restructuring plan that envisaged concentrating all the Group’s internet assets so as to allow TI Media to focus on its media activities and sufficient financial resources to develop its business. Specifically, the plan entails the acquisition of Virgilio and Tin.it from TI Media by Telecom Italia for a price of €950 million. Using the financial resources obtained from the sale of these assets, TI Media will: make new investments in its media business for approximately €250 million in  the period 2005-2007; buy back own shares in the first half of 2005, within the limits permitted by law, for an amount of around €148 million; distribute dividends in 2006, for current estimated value is €550 million. Also, before the end of 2005, La7 Televisioni is to be merged into TI Media.

With reference to the new structure of the Telecom Italia Media Group and in line with the new international accounting and financial reporting standards (IAS/IFRS), in the three financial years 2005-2007 we expect the following results:

  •  an average annual growth in revenues of around 15-20%;
  •  net positive EBITDA in 2007;
  •  planned investments of €165 million.

As indicated above, the sale of Virgilio and Tin.it to Telecom Italia generate an additional for approximately €250 million in financial resources, which will be channelled into further investments.


Television (La7-MTV)
The following IAS/IFRS-compliant results are expected for 2005-2007:

  •  an average annual growth of 25-30% in revenues;
  •  net positive EBITDA  in 2007.

These goals may be achieved by expanding digital terrestrial television, where both the technology and the business models are evolving rapidly (especially after the launch of the pay-per-view service), and by enhancing both La7 and MTV’s position in the analogue market, where we intend to continue with our ongoing process of improvement.

Telecom Italia Media is currently one of the most active digital terrestrial operators. Its multiplex covers 70% of the Italian population and it has already sold 560,000 prepaid cards (for pay-per-view football broadcasts).

The company plans to extend and improve its coverage over the next three years, especially in digital terrestrial broadcasting, and aims to enrich the content it delivers (both free-to-air and pay-TV) as well as its interactive services. By leveraging the television skills of the Group, the company will also be able to develop new channels (free-to-air and pay-TV) to meet the growing demand for diversified content (music, culture, news entertainment etc).

News (APCom)

The following IAS/IFRS-compliant results are expected for 2005-2007:

  •  an average annual growth of 40% in revenues;
  •  net positive EBITDA in 2007.

These targets may be achieved through the development of innovative and customised multimedia content (audio/video news), the expansion of the portfolio of institutional customers and the delivery of new services.

Office Products (Buffetti)
The following IAS/IFRS-compliant results are expected for 2005-2007:

  •  an average annual growth of around 5-10% in revenues;
  •  net EBITDA amounting to 9% of revenues in 2007 (6.4% in 2004);
  •  a total cash-flow of €22 million.

These results may be reached by expanding the range of products and innovative services, consolidating the supply of traditional products, developing Buffetti-branded products with higher profit margins, and strengthening all sales channels (direct sales and affiliated).

Preliminary results for the first quarter of 2005

Preliminary results at 31 March 2005, compared with those for the corresponding period of 2004, show that gross advertising revenues increased for both La7 and MTV. The former rose from €19 million to €23 million (+23%) and MTV from €13.5 million to €16.2 million (+20%). Viewers for La7 have also increased: the average audience share in the period rose to 2.5%, an improvement of 13% compared with the corresponding period of the previous year (2.2%). In the same period, APCom continued to enlarge its portfolio of institutional clients (+18% year to date), and, by  following a multi-channel sales strategy, Buffetti increased sales from its direct outlets by 3%. As regards the internet business, in the first quarter of 2005, the number of Tin.it ADSL customers rose to 319,000 (+72% compared with the first quarter of 2004), while Virgilio registered a total of 2.3 billion page views (+18% compared with the corresponding period of the previous year).

Milan, 12 April 2005