Annual Financial Statements as of 31 December 2013 Examined and Approved

03/04/2014 - 07:56 PM

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Telecom Italia Media Group:

REVENUES: 72.2 million euro; -3.0 million euro compared to 2012 (75.2 million euro)

EBITDA: 30.2 million euro; -2.8 million euro compared to 2012 (33.0 million euro)

EBIT: 1.8 million euro; +65.8 million euro compared to 2012 (-64.0 million euro)

COMPARABLE EBIT: 1.8 million euro; -4.2 million euro compared to 2012 (6.0 million euro)

NET RESULT: -132.0 million euro; +108.9 million euro compared to 2012 (-240.9 million euro)

NET FINANCIAL POSITION: 259.9 million euro; -0.2 million euro compared to year-end 2012 (260.1 million euro); down by 13.2 million euro compared to 30 September 2013 (273.1 million euro)

TIMB’S OPERATING FREE CASH FLOW: 24.3 million euro, up by 20.3 million euro compared to 2012 (4.0 million euro)

The Telecom Italia Media Board of Directors, chaired by Severino Salvemini, today examined and approved the Group’s Annual Financial Statements as of 31 December 2013.

Consolidated Group revenues for 2013 amounted to 72.2 million euro, down 3.0 million euro compared to 2012 (75.2 million euro).

The reduction was substantially attributable to the termination, by the Network Operator, of operations linked to LA7 and MTV analogue networks following the Italian switch-off finalised in 2012.

EBITDA amounted to 30.2 million euro, a 2.8 million euro decrease compared to 2012 (33.0 million euro). EBITDA figure was mainly influenced by the reduction in revenues. At costs level it should be noted the overall increase in other operating costs of Telecom Italia Media Broadcasting, as a result of some allocations to provisions, balanced by lower costs of Telecom Italia Media S.p.A.

EBIT amounted to 1.8 million euro, compared to -64 million euro in 2012; in comparable terms, net of goodwill writedown for 2012 of 70 million euro, 2013 EBIT change was -4,2 million euro compared to the previous year.

Net result totalled -132.0 million euro, compared to -240.9 million euro in 2012.

Net financial position was 259.9 million euro as of 31 December 2013, substantially in line with year-end 2012 (260.1 million euro). The figure was chiefly attributable to the net cash flow associated with the disposal of La7 (+106.4 million euro), as well as of MTV Italia (-6.5 million euro), offset by Telecom Italia’s waiver of financial receivables for 110.0 million euro. It also included the industrial investments requirement amounting to 6.5 million euro, the result of the operating activities for the year (EBITDA -30.2 million euro and ∆ Working Capital +9.9 million euro). The figure also accounted for other net outlays of 23.7 million euro which chiefly comprised the outlay for the acquisition of the stake in MTV Italia from LA7 for 9.5 million euro in April 2013, net financial expenses for the year (5.8 million euro), and taxes paid by Telecom Italia Media Broadcasting for 8.5 million euro.

As of 30 September 2013, net financial position amounted to 273.1 million euro.

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Results by Business Unit

Following the disposal of LA7 S.r.l. (finalised on 30 April 2013) and the disposal of MTV Italia S.r.l. (finalised on 12 September 2013), the relevant Business Units have been classified among Discontinued Operations. Therefore, the method of representation of income statement and balance sheet results has been reviewed, isolating the Network Operator Business Unit, in line with the previous year. The Network Operator Business Unit includes the operations of Telecom Italia Media Broadcasting (TIMB) relating to the management of the Digital Multiplexes, as well as the offering of accessory services and broadcasting platforms.

Network Operator (TIMB)

Network Operator revenues and other income in 2013 amounted to 74.3 million euro, decreasing by 1.7million euro compared to the previous year (76.0 million euro). The change was substantially attributable to the termination, in 2013, of operations linked to LA7 and MTV analogue networks following the Italian switch-off finalised in 2012, and was partially offset by the increase of other income.

EBITDA amounted to 36.0 million euro, down by 7.2 million euro compared to 2012 (43.2 million euro).

EBIT amounted to 7.6 million euro, improving by 61.4 million euro compared to 2012 (-53.8 million euro), whereas, in comparable terms, net of the above-mentioned goodwill writedown for 2012 of 70 million euro, EBIT change decreased by 8.6 million euro.

Investments for 2013 totalled 6.4 million euro and were mainly aimed at further implementing the transport network and building a new broadcasting infrastructure for television channels (Playout).

In 2013, TIMB’s operating free cash flow stood at 24.3 million euro, sharply rising (+20.3 million euro) compared to 2012 (4.0 million euro). The increase was essentially attributable to lower investments made in 2013 following the completion of the switch-off process in the first half of 2012 and a reduction in trade receivables.

 At 31 December 2013, the three digital multiplexes of TIMB covered 95.2% of the Italian population.


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

Telecom Italia Media S.p.A.’s revenues amounted to 680 thousand euro, down by 138 thousand euro compared to 818 thousand euro in 2012.

EBITDA was -5.7 million euro, a 4.5 million euro improvement compared to 2012 (-10.2 million euro).

EBIT totalled -5.8 million euro, a 44.8 million euro improvement compared to 2012 (-50.6 million euro). Net of the goodwill writedown for 40.3 million euro in 2012, EBIT improved by 4.5 million euro.

Net Result amounted to -150.5 million euro, a 27.6 million euro improvement of compared to 2012 (-178,1 million euro).


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Events subsequent to 31 december 2013

There were no events to report.

Outlook for 2014

The Telecom Italia Media Group, following the disposal of its television business units La7 and La7d, finalised on 30 April 2013, and the disposal of MTV Italia, finalised on 12 September 2013, will focus its development strategy on the implementation of initiatives aimed at restoring the Group’s efficiency and profitability.

In light of the current economic and regulatory environment in which Telecom Italia Media operates,

expectations for 2014 are as follows:

  • keeping the Network Operator TIMB’s present level of bandwidth rental, with the aim of consolidating its customer base and expanding the offering of additional services, while implementing a careful cost control and reducing investments, as a result of the completion of the digitalisation process.

Based on the foregoing, in 2014 Telecom Italia Media expects to achieve results that are in line with those of 2013, in comparable terms.


CORPORATE GOVERNANCE ISSUES

The Board of Directors is satisfied that all the requirements for the Board to operate as a panel organ have 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 and Fabio Alberto Roversi Monaco.

GENERAL SHAREHOLDERS’ MEETING

In execution of the Board of Directors’ mandate on 6 February 2014, the General Shareholders' Meeting of the Company is convened on 10 April 2014, in Rozzano (Milan), to resolve, in the ordinary session, upon the Financial Statements for the year ended 31 December 2013, the Remuneration Report and the appointment of the Board of Directors following the expiry of the relevant mandate, and, in the extraordinary session, upon the proposal to reduce share capital (the notice of calling is available on the corporate website at www.telecomitaliamedia.it under section Shareholders’ Meeting) In detail:


Financial Statements

The Shareholders will be asked to approve the Financial Statements of Telecom Italia Media S.p.A., which report a loss of 150,502,663.67 euro. The coverage of the loss for 2013, as for that of financial year 2012, brought forward and not allocated to reserves, will be decided during the Extraordinary Shareholders’ Meeting.

Remuneration Report

A Remuneration Report will be submitted to the 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 2014.

Board of Directors’ Appointment

The General Shareholders’ Meeting will have to appoint the new Board of Directors, whose mandate is going to expire, and determine its composition, term of office and remuneration. The appointment of the Board will be based on a list system, as illustrated in the notice of calling and the report available on the corporate website at  www.telecomitaliamedia.it under section Shareholders’ Meeting.

Pursuant to the recommendation of the Corporate Governance Code, and as already announced in the Directors’ report filed on 28 February, during today’s meeting the Board of Directors approved an indicative opinion to the Shareholders concerning the dimension and composition of the Board to be appointed in the forthcoming Shareholders’ Meeting.

The document will be made available on the website under section Shareholders’ Meeting.

Proposal to reduce share capital pursuant to Article 2446 of Italian Civil Code

Having acknowledged that the TI Media S.p.A.’s financial position as of 31 December 2013 showed an overall loss amounting to 196,648,710.41 euro (which takes into account the losses for the years 2012 and 2013, as well as reserves, including positive reserves arising on Telecom Italia S.p.A.’s waiver of its          € 110,000,000.00 credit in 2013) credit by  the Board of Directors resolved upon submitting to the Extraordinary Shareholders’ Meeting a proposal to cover such loss through the cancellation of 1,343,009,473 ordinary shares — in the proportion of 13 ordinary shares out of each 14 outstanding ordinary shares — and reduce share capital from 212,188,324.10 euro to 15,539,613.69 euro, while also, at the same time and merely for purposes of accounting reconciliation, bringing forward the losses of 362,709.95 euro and cancelling 2 ordinary shares held by the parent company Telecom Italia S.p.A.

Pursuant to Article 6.12 of the By-laws, the reduction of the share capital due to losses does not have any effect on savings shares until the loss can be covered by the fraction of share capital represented by ordinary shares.


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The Board of Directors, moreover, examined the progress of the merger process between Telecom Italia Media Broadcasting (100% controlled by TI Media) and the network operator business of Rete A (a subsidiary of Gruppo Editoriale L’Espresso), aimed at enhancing the value of the assets of both entities, including by exploiting industrial synergies.


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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, Luigino Giannini, has declared that the accounting disclosures contained in this press release correspond to the data records, accounting books and accounts entries.

It should finally be noted that the audit of the Consolidated and Separate Financial Statements of Telecom Italia Media at 31 December 2013 has yet to be completed.


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The conference call to illustrate the results for the period will not be held.

Milan, 4 March 2014