Telecom Italia Media: The Board of Directors Approves First Half Report at June 30, 2007

09/06/2007 - 11:00 AM

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Revenues INCREASED TO Euro 125.0 million, up 27.8% (Euro 97.8 million IN H1 2006), BOOSTED by advertising REVENUES and Digital Terrestrial Television

STRONG GROWTH Of La7 Free-to-Air advertising sales in the Q2 +18.3% (+15.8% in Q1), july-august boom up approximately 30%;

ONGOING success OF MTV, which celebrateS its 10TH anniversary: 10% GROWTH IN ADVERTISING SALES THANKS TO THE CONTRIBUTION OF ALL PLATFORMS. initial july-august results consolidate h1 trend with a growth of approximately 11%

Revenues FROM Digital Terrestrial TELEVISION doubled (+154.7%); Euro 21.9 million (€9.6 million in Q2 2007);

Strong growth of la7 cartapiu commerical offer for the 2007-2008 season: in the first 2 weeks of the championship approximately 47,000 subscriptions, an increase of 74% compared with the previous season

OPERATING LOSS MORE THAN HALVED: EBITDA -€20.8 million, +60.3% (-€52.4 million in h1 2006), EBIT -€51.6 million, +34.7%(-€79.0 million in h1 2006)

NET RESULT -€42.2 MILLION (-€54.9 IN H1 2006)

Net debt DECREASED from FIRST QUARTER: €165.1 million (€190.6 million at March 31, 2007)

Positive results for the new activity of “Content Competence Center” for the Telecom Group. With the 32nd edition of the 2007 America’s Cup, broadcast exclusively on all Group platforms, achieving excellent audience results

 

Milan, September 6, 2007 – The Board of Directors of Telecom Italia Media, chaired by Enrico Parazzini, examined and approved the Report for the first half of 2007.

Consolidated revenues for the six-month period amounted to €125.0 million, up 27.8% (€97.8 million in H1 2006), mainly boosted both by the strong growth in domestic advertising revenues (+14.3%), which significantly outperformed the market (down by 2.6% in the first six months 2007 - source: Nielsen), and the strong increase in revenues from the Digital Terrestrial Television platform.

EBITDA stood at -€20.8 million, thus improving by 60.3% compared to H1 2006 (-€52.4 million in the same period of 2006). This result was achieved both thanks to an improvement of analogue Free to Air activities by €9.9 million, driven by advertising sales, and the profitability growth of Digital Terrestrial Television, which benefited both from the increase in revenues, an improved efficiency of the platform, and cost rationalization of Free to Air digital channels.

EBIT, after amortization and depreciation for the period, was -€51.6 million, a 34.7% improvement (-€79.0 million in H1 2006). Depreciation and amortization impacted H1 2007 operating profitability by €30.8 million and are mainly attributable to investments in DTT (€14.1 million), whose return shifted in time due to the already known postponement of the switch off.

Net Result attributable to the Parent Company, including the result of assets held for sale, amounted to -€42.2 million (€-54.9 million for H1 2006).

Industrial investments amounted to €46.2 million in H1 2007 (€58.6 million in the same period of 2006). The decrease in investments is attributable to the completion of the development phase of the digital networks. Investments for the six-month period include €19.2 million for the purchase of television rights and €20.8 million mainly for the extension of the digital coverage of the 2nd multiplex in Sicily, completed in the first quarter of the year.

In the second quarter, net financial debt decreased to €165.1 million compared to €190.6 million at March 31. The decrease was mainly achieved through the collection of the amount receivable for the Fiscal Consolidation at Telecom Italia Group totaling €48.4 million (financial debt was €128.2 million at 31 December 2006).

Results by Business Unit

Free to Air Television

The financial results for the first six months of 2007 of the Free to Air were very positive: revenues were €85.9 million, improving 13.8% (€75.5 million in 2006), and both EBITDA (-€9.0 million; +52.4%) and EBIT (-€25.0 million; +23.8%) improved significantly.

The positive performance in terms of revenues was achieved mainly thanks to the growth of advertising sales in Italy (up 12.9%), which strongly outperformed the market.

La7 revenues, amounting to €53.4 million, showed a significant increase (up 17.4% compared to €45.5 million in H1 2006), thanks to the large contribution of advertising sales which grew 18.3% in Q2 2007 (up 15.8% in Q1). In July and August advertising revenues surged by approximately 30%. The positive sales result led to an increase in profitability, improving both EBITDA (+€6.1 million, up 29.3% compared to 2006), and EBIT (+€4.3 million, up 13.4% compared to 2006). 

In H1 2007, La7 consolidated its average daily audience share at 3% in a period marked by a total drop in audience and a high contraction of generalist TV.
 
MTV revenues amounted to €35.5 million, up 8.6% compared to the first half of 2006 (€32.7 million). In H1 2007, MTV consolidated its position thanks to an increase in domestic and international advertising sales. The aggregate value of MTV’s advertising sales, distributed across all platforms, was 10% (+6.2% on Fta TV). This trend was confirmed by results posted in July/August and increase of approximately 11% (+13% on Fta TV). EBITDA and EBIT improved by about €4 million compared to 2006.

Multimedia

In the first half of 2007, multimedia activities continued along the growth trend which characterized Q1, recording revenues of €13.2 million, up 33.3% compared to the same period of 2006 (€9.9 million). In Q2 2007 alone, revenues stood at €8.1 million. The positive results of the first half was achieved on all platforms also thanks to advertising sales, which increased by 61.2%. The good performance of this business area is confirmed also by the positive EBITDA results (€4.5 million compared to €2.8 million in H1 2006; up 60.7%) and EBIT (3.9 million, compared to €2.2 million in H1 2006; up 77.3%) The multimedia activities of the Telecom Italia Media Group include satellite activities and interactive events, as well as the new activities of the Content Competence Center for Telecom Italia.

Digital Terrestrial Television

Revenues for the first half of 2007, more than doubled, reaching €21.9 million and growing 154.7% (€8.6 million in H1 2006). Profitability also improved significantly both in terms of EBITDA (-€7.9 million compared to -€26.7 million in H1 2006; +70.4%) and EBIT (€-22.0 million compared to €-38.5 million in H1 2006; +42.9%). Strong growth in the La7 Cartapiù commercial offer for the 2007-2008 football season: in the first two weeks of the championship approximately 47,000 subscriptions were sold with an increase of 74% compared with the previous season.

News

In H1 2007, revenues of the “News” Business area (APCom press agency) amounted to €4.7 million, up 4.4% compared to the same period of 2006. Profitability is in line with the first half of 2006.

Enclosures (file .pdf, 179 Kb)