Cagliari, 21 March 2003. The Board of Directors of Tiscali, Europe’s leading internet communications company, has approved the group’s financial statements for the year ending 31 December 2002.
The results approved by the Board of Directors confirm the preliminary annual figures released with the Q402 results.
2002 was a crucial year for Tiscali, which despite the downturn in the sector and the economy as a whole, kept a leadership position of the European internet market.
In 2002 the group completed the integration and reorganisation of the companies acquired in 2001, and brought them together under a single, pan-European brand name.
Tiscali’s philosophy of “one brand, one technology, one company” enabled the company to consolidate its position as European leader in internet services, and to establish itself as the leading alternative and independent operator in the ISP market.
Tiscali’s positive performance in 2002 is evidence of the effectiveness of its strategy, business plan and operating decisions:
- Revenues at EUR 748.4 million, +18% on 2001;
- Gross margin at 49%, +104% on 2001;
- EBITDA positive at EUR 1 million, from a loss of EUR 170.4 million in 2001. This demonstrates the effectiveness of the cost rationalisation strategy;
- 7.3 million active users;
- 40 billion minutes of internet traffic, +20% on 2001;
- 214,000 ADSL customers, +229% on 2001;
- 13.7 million unique visitors to the Tiscali portal. This confirms Tiscali’s status as one of Europe’s leading web properties.
Tiscali closed 2002 with consolidated revenues of EUR 748.4 million, up 18% on the EUR 635.7 million posted in the previous year. This increase was due to a rise in the number of minutes of internet traffic, to the integration of the companies acquired in 2001 and to the launch of new dial-up and ADSL services. The slow liberalisation of the broadband market—still under way—only began to make a positive impact in the second half of 2002.
Gross profit shot up 104%, from EUR 179 million to EUR 364.8 million, owing to synergies emerging from the integration process and to the migration of internet traffic to Tiscali’s proprietary IP network. The gross margin on sales expanded from 28% to 49%.
Operating costs remained broadly unchanged on 2001, at EUR 363.8 million, showing that the group has now reached its optimum size.
Marketing costs amounted to EUR 122.8 million, attributable chiefly to advertising campaigns promoting the Tiscali brand and the launch of ADSL services across Europe. Personnel costs totalled EUR 140 million, showing a decrease of 14% vs. 2001.
General and administrative costs stood at EUR 100.9 million, in line with 2001.
The combined effect of rising revenues and an improved business performance produced a positive EBITDA figure of EUR 1 million, a sharp decrease of the loss of EUR 170.4 million in 2001.
Depreciation and amortisation stood at EUR 505 million, a slight increase on the EUR 497.7 million posted in 2001. Goodwill amortisation was EUR 216.6 million.
EBIT was therefore negative, at EUR 504.9 million. This operating loss was however down 24% on the EUR 668.2 loss registered in 2001.
Tiscali posted a consolidated net loss of EUR 593.1 million in 2002, compared with a loss of EUR 1,664.4 million the previous year (which was partly due to significant asset write-downs).
As of 31 December 2002, the group held EUR 333.8 million in cash or cash equivalents, while net debt stood at EUR 134.7 million.
In light of the good results posted in 2002, and figures for the first few months of 2003, the group has confirmed its targets for this year.
Revenues are expected to rise by over 20%, and the number of ADSL customers is expected to reach 600,000. The EBITDA margin is forecast at 5-6%, and the group confirms its forecast of a positive Free Cash Flow in 2H of 2003 and of a positive net profit in 2005.
About Tiscali
Tiscali S.p.A., (Nuovo Mercato, Milan: TIS, Nouveau Marché, Paris: 005773), is the Internet Communication Company providing access, content and business applications, as well as innovative communications services. As of 31 December 2002, Tiscali had 7.3 million active users and 13.7 million monthly unique visitors (source: Nielsen NetRatings) to the Tiscali portals, confirming the company as one of the leading web properties in Europe.
Tiscali's corporate website can be found at www.tiscali.com