Telecom Italia Media: Group’s Preliminary Results at 31 December 2011 Presented to the Board of Directors

02/21/2012 - 04:00 PM

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The growth of advertising revenues for the La7 channels continued (+32.1%); La7 reached an average daily audience share of 3.85% (+24.6%) and 4.40% in prime time (+46.2%)

Gross advertising revenues of La7 channels increased also in the first two months of 2012 (about +35%)

TIMB meets full occupancy of the three Mux digital bandwidth

REVENUES: 238.2 million euro; -7.9% compared to 2010 (258.5 million euro)

EBITDA: 28.0 million euro; +14.8 million euro compared to 2010 (13.2 million euro)

COMPARABLE EBITDA: 7.5 million euro; -5.7 million euro compared to 2010

EBIT: -30.7 million euro; +15.3 million euro compared to 2010 (-46.0 million euro)

COMPARABLE EBIT: -51.2 million euro; -5.2 million euro compared to 2010

NET FINANCIAL POSITION: 138.7 million euro; +23.2 million euro compared to year-end 2010 (115.5 million euro)

The Telecom Italia Media Board of Directors, chaired by Severino Salvemini, examined the Group’s preliminary results at 31 December 2011.

The preliminary results for financial year 2011 show a significant improvement compared to 2010: EBITDA amounted to 28.0 million euro, increasing by 14.8 million euro, whereas EBIT was -30.7 million euro, up 15.3 million euro.

These results were achieved also thanks to the contribution of the proceeds of 20.5 million euro related to the indemnity for early resolution of the Competence Center agreement with Telecom Italia, which was set to expire on 31 December 2012.

More in detail:

The trend of the Group’s consolidated revenues was marked by a significant growth of gross advertising revenues of the La7 channels (+32.1%), in strong contrast with the decrease of the television market[1]; this partly offset the drop in revenues from Network Operator activities and the decline in MTV revenues. Revenues for 2011 amounted to 238.2 million euro, down by 20,3 million euro compared to 2010.

EBITDA was positive at 28.0 million euro, a 14.8 million euro improvement compared to 2010 (13.2 million euro). In comparable terms2, EBITDA amounted to 7,5 million euro, down by 5,7 million euro compared to 2010.

EBIT was -30.7 million euro, improving by 15.3 million euro compared to 2010.

(-46.0 million euro) In comparable terms2, EBIT amounted to -51.2 million euro, down by 5.2 million euro compared to 2010.

Net financial debt amounted to 138.7 million euro, up by 23.2 million euro compared to year-end 2010 (115.5 million euro). This change was mainly related to investment requirements, which were partly offset by the positive contribution of operating activities (including the Competence Center indemnity) and working capital improvement. At 30 September 2011, net financial debt amounted to 133.5 million euro.

Results by Business Unit

1. TI Media – La7

The TI Media – La7 revenues for 2011 amounted to 139.9 million euro, a 21.0% increase compared to 2010 (115.6 million euro) thanks to higher gross advertising revenues of 185.7 million euro (+32.1%).

The improvement in advertising revenues was driven by the excellent performance of the audience share of La7, whose daily average reached 3.85%, up 24.6% compared to 2010; this figure was even more significant as it bucked the trend of the television market1.

The excellent performance of gross advertising revenues also continued in the first two months of 2012, with an increase of about 35% compared to the same period of 2011, bucking the first figures on the trend of the Italian advertising market.

During the year, also La7d  grew constantly with an average daily audience share of 0.28%, substantially doubling the 2010 result. This trend continues in the first months of 2012, and to date the La7d average audience daily share reaches 0.34%, up 42% compared with the same period of last year.

Revenues from Digital Content activities (Competence Center for Telecom Italia, an activity terminated as of 1 October 2011) amounted to 13.3 million euro.

EBITDA was -1.5 million euro, a 34.1 million euro improvement compared to 2010 (-35.6 million euro). In comparable terms2, EBITDA amounted to -22.0 million euro, a 13.6 million euro improvement compared to 2010.

EBIT amounted to -29.0 million euro, a 34,0 million euro improvement compared to 2010 (-63.0 million euro). In comparable terms2, EBIT amounted to -49.5 million euro, improving by 13.5 million euro compared to 2010.

2. MTV Group

MTV revenues for 2011 amounted to 73.8 million euro, down 24.5% compared to 2010 (97.8 million euro). This performance was mainly impacted by the decline of advertising revenues of channel One (-9.8 million euro) and the lower revenues from external productions of Playmaker (-7.4 million euro), the lower revenues of Satellite-Music Platform channels (-4.0 million euro) and MTV Mobile (-2.4 million euro), which were only partly offset by the positive contribution of advertising revenues of the new channel MTV Music (+1.7 million euro). The revenue decrease was tackled through a far-reaching cost-cutting drive, which brought costs down by 18.3 million euro, by optimizing the programming schedule, making greater use of the library, and reducing labour and other operating costs.

Gross advertising revenues decreased by 16.1%, going from 67.1 million euro for 2010 to 56.3 million euro for 2011.

EBITDA  amounted to 6.6 million euro (12.3 million euro for 2010), down 46.3%.

EBIT was 16 thousand euro (5.0 million euro for 2010), down 99.7%.

3. Network operator (TIMB)

Network Operator revenues for 2011 amounted to 54.9 million euro, down by 21.2 million euro compared to 2010. This performance was mainly due to the loss of the customer Dahlia TV, which rented digital band for 25.6 million euro in 2010.

EBITDA amounted to 23.0 million euro, a 11.7 million euro decrease compared to 2010 (34.7 million euro). The reduction in revenues was partly offset by new rental agreements that led to the full rental of the digital band available and lower operating costs achieved through a greater efficiency of the network management.

EBIT amounted to -1.6 million euro, decreasing by 11.8 million euro compared to 2010 (10.2 million euro).

At 31 December 2011, TIMB’s three Digital Multiplexes (excluding the fourth, which is currently operating only in Sardinia) respectively covered 90.1%, 94.2%, and 75.0% of the Italian population.

TIMB fully rented the band, thanks to the agreements signed in the last months of 2011 and in early 2012.

With reference to the “Beauty Contest,” on 20 January 2012 TIMB received an official notice from the Ministry of Economic Development postponing the Contest for 90 days and granting TIMB 60 days to submit any observations on the subject. TIMB has already replied, seeking a remedy for the damage sustained by the Group during the shift from analog to digital, and thus the assignment of a high-quality, nation-wide DVB-T frequency, regardless of the outcome of the Beauty Contest or the redefinition of the rules for the assignment of the internal digital dividend. To that end, TIMB has also asked that a dialog be initiated with the Administration to identify possible solutions to the overall dispute.

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Pursuant to article 154-bis, paragraph 2, of the Unified Finance Act, the manager in charge of drafting the company’s accounting documents, Mr. Paolo Serra, has declared that the accounting disclosures contained in this press release correspond to the data records, accounting books and accounts entries.

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The preliminary Group’s results at 31 December 2011 will be illustrated to the financial community during a conference call scheduled for 4.00 pm (CET). Journalists may listen in to the presentation by phone on 800 408 088 (callers from Italy) and +39 06 33 485 042 (International callers). For those who are unable to follow the live conference call, a recorded version of the presentation will be available for 2 days at the number: +39 06 334 843 (access code: 393046# for Italian; 282935# for English)
 

 

[1] -3.1% advertising revenues of the Italian television market in January-December 2011, source: Nielsen.

2 The amount does not include the proceeds of 20.5 million euro related to the indemnity for early resolution of the Competence Center agreement with Telecom Italia

 

 

Milan,21 February 2012