Annual Financial Statements at 31 December 2011 Examined and Approved

03/20/2012 - 03:45 PM

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Telecom Italia Media Group:

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: -87.4 million euro; -41.4 million euro compared to 2010 (-46.0 million euro)

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

NET RESULT: -83.0 million euro including 56.7 million euro in goodwill writedown; -28.6 million euro compared to financial year 2010 (-54.4 million euro)

CAPEX: 61.4 million euro; -5.5 million euro compared to 2010 (66.9 million euro)

NET FINANCIAL Position: 138.7 million euro; +23.2 million euro compared to the end of 2010 (115.5 million euro)

The Telecom Italia Media Board of Directors, chaired by Severino Salvemini, examined and approved the Group’s annual financial statements at 31 December 2011.

The trend of consolidated Group revenues was marked by a significant growth of advertising revenues of the La7 channels (+32.1%), in net 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 terms [2], EBITDA amounted to 7.5 million euro, down by 5.7 million euro compared to 2010.

EBIT and Net Result were affected by the results of the impairment test carried out at 31 December 2011, which led to the writedown of the goodwill at group level for 56.7 million euro. The writedown concerned the goodwill value attributed to the business units MTV and the Network Operator TIMB (13.6 million euro and 43.1 million euro, respectively), which recorded the largest gap between expected and actual results in 2011.

As a result of the goodwill writedown, EBIT amounted to -87.4 million euro, a 41.4 million euro decrease compared to 2010 (-46.0 million euro). In comparable terms [3], EBIT amounted to -51.2 million euro, down by 5.2 million euro compared to 2010.

Net Result amounted to -83.0 million euro, down by 28.6 million euro compared to 2010 (-54.4 million euro).

Capex amounted to 61.4 million euro, down by 5.5 million euro compared to 2010 (66.9 million euro) and are mainly attributable to television rights of the business units TI Media – La7 and MTV (28.6 million euro) and the infrastructures of the television digital network of the Network Operator (25.8 million euro).

Net financial position 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.

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Results for the year 2011 detailed by Business Unit were reported in the press release issued on 21 February 2012.

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Results of the Parent Company Telecom Italia Media S.p.A.

Revenues of the Parent Company Telecom Italia Media S.p.A. amounted to 139.9 million euro, up 24.3 million euro compared to 115.6 million euro for 2010.

EBITDA was -1.5 million euro, a 34.1 million euro improvement compared to 2010 (-35.6 million euro). In comparable terms [4], EBITDA was -22.0 million euro, with an improvement of 13.6 million euro compared to 2010.

EBIT amounted to -67.2 million euro, a 92.0 million euro improvement compared to 2010 (-159.2 million euro). In comparable terms [5], EBIT amounted to -49.6 million euro, an improvement by 13.3 million euro compared to 2010.

The Net Result amounted to -60.8 million euro, an improvement by 92.4 million euro compared to 2010    (-153.2 million euro).

Also EBIT and the Net Result of the Parent Company were affected by the results of the above-mentioned impairment test at 31 December 2011. The test led to a goodwill writedown in the separate Financial Statements of Telecom Italia Media S.p.A. of a total amount of 38.1 million euro (96.3 million euro in 2010), a lower amount compared to that recognised in the consolidated Financial Statements due to the lower book value of the assets for the Parent Company.

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outlook

The Board of Directors also approved the 2012 budget, agreeing to examine in a following meeting the 2013 and 2014 targets, which are under further examination in accordance with the major shareholder.

2012 forecast:

·    increase of television advertising sales for the La7 channels, also thanks to the growth in audience share and the enhancement of the La7 programming, launching new programs and faces. Advertising revenues for the first quarter of 2012 substantially confirm the good performance of last year;

·    reduction in revenues of the main MTV channel, with the consequent need to restructure it, and to prosecute in the cost-efficiency program;

·    increase in revenues and profitability of the Network Operator, as a result of the already reached full rental of the MUX digital bandwidth, and complete the network digitalisation, in accordance with the switch-off calendar.

Based on the foregoing, in 2012 Telecom Italia Media expects:

·         Group Revenues up more than 13% compared with 2011;

·         EBITDA positive confirmed in 2012;

·         Capex in line with 2011.

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corporate governance issues

The Board of Directors has verified that all the requirements for the Board to operate as a panel organ has been met, and further that the following Board members fully comply with the requirements of independence: Irene Bignardi, Adriano De Maio, Lorenzo Gorgoni, Davide Rampello, Sergio Ristuccia, Fabio Alberto Roversi Monaco and Severino Salvemini.

The Board of Directors also approved the appointment, as of 1 April 2012, of Luigino Giannini as manager in charge of the accounting documents of Telecom Italia Media S.p.A., replacing Paolo Serra who will take up new, important assignments within the Telecom Italia Group.

CALLING OF THE GENERAL SHAREHOLDERS’ MEETING

The Board of Directors has convened a General Shareholders’ Meeting on 24 April 2012 (single calling) in Rozzano (Milan, Italy) at Viale Toscana 3, to resolve on the following items on the agenda:

Financial Statements

The Shareholders will be asked to approve the financial statements of Telecom Italia Media S.p.A., which

 show a loss of 60,759,334.01 euro, and the ensuing replenishment of such loss through the transfer of the same amount from the "Share premium reserve".

Remuneration Report

For the first time, a Remuneration Report will be presented to Shareholders, pursuant to Article 123-ter of Legislative Decree 58 of 24 February 1998. The Shareholders will be asked to pass a non-binding resolution on the first section of the Report about the Company’s remuneration policy for its governing bodies, general managers and key management personnel for 2012.

Appointment of an Alternate Auditor

The Shareholders will have to appoint an Alternate Auditor to replace Antonio Mastrapasqua, who resigned. In this regard, the controlling company Telecom Italia has nominated Luigi Vannini — whose curriculum vitae (Italian version) is attached hereto — as candidate for the post.

Amendments to the By-laws

The Extraordinary Shareholders’ Meeting will be asked to approve some amendments to the Company's By-laws intended to implement legal provisions which introduced in Italy the principle of gender balance in the Board of Directors and the Board of Statutory Auditors of listed companies (Law 120 of 12 July 2011, amending Articles147-ter and 148 of Legislative Decree 58 of 24 February 1998).

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Pursuant to sub-section 2, clause 154-bis 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.

Finally we should point out that the auditing of the consolidated and separate financial statements of Telecom Italia Media at 31 December 2011 is still in progress.

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The Group’s results as of 31 December 2011 and the 2012 trends will be presented to the financial community today during a conference call, starting at 4:30 pm (CET). Journalists may listen in to the presentation by phone on 800 408 088 (callers from Italy) and +39 06 33 458 042 (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 334843 (access code: 401267# for Italian: 390156# 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 resolution of the
Competence Center agreement with Telecom Italia.
 

[3] The amount does not include the proceeds of 20.5 million euro related to the indemnity for resolution of the
Competence Center agreement with Telecom Italia and the writedown of goodwill for 56.7 million euro.
 

[4] The amount does not include the proceeds of 20.5 million euro related to the indemnity for resolution of the
Competence Center agreement with Telecom Italia.

[5] The amount does not include the proceeds of 20.5 million euro related to the indemnity for resolution of the
Competence Center agreement with Telecom Italia and the writedown of goodwill for 38.1 million euro.

 

 

Rome, 20 March 2012