Cagliari, 29 April 2003. The ordinary shareholders’ meeting of Tiscali, Europe’s leading internet company, approved the accounts for the year to 31 December 2002 in Cagliari today.
During the year, Tiscali continued to expand, seeking to consolidate its leading position on the European internet market. Despite a difficult economic environment in 2002, with all sectors affected, Tiscali turned in a solid performance:
- revenues up 18% on 2001, at EUR 748.4 million
- gross margin of 49%, a 104% improvement on 2001
- positive EBITDA of EUR 1 million, versus a EUR 170.4 million loss in 2001—attesting to the success of the cost rationalisation programme
- 7.3 million active users
- 40 billion minutes of internet traffic, +20% versus 2001
- 214,000 ADSL customers, +229% on 2001
- 13.7 million unique visitors to Tiscali’s portal, making it one of Europe’s leading web properties
The Tiscali group posted consolidated revenues of EUR 748.4 million in 2002, an 18% increase on the previous year, on the back of a rise in traffic minutes, the integration of companies acquired in 2001 and the launch of new dial-up and ADSL products. However, the slow process of liberalising the broadband market meant that ADSL revenues only boosted results in the second half of 2002.
The gross margin expanded by 104% thanks to the synergies released through the integration of new acquisitions and the migration of internet traffic to the proprietary network. Gross profit rose from EUR 179 million to EUR 364.8 million, and from 28% to 49% as a percentage of sales.
Operating costs were EUR 363.8 million in 2002, in line with 2001, a sign that the company has now reached its optimum size. Marketing costs totalled EUR 122.8 million, and mainly went on an advertising campaign to promote the Tiscali brand and the launch of ADSL services throughout Europe. Personnel costs were down 14% versus 2001 at EUR 140 million, while general and administrative costs were in line with the previous year, at EUR 100.9 million.
The combined effect of revenue growth and an improved business performance delivered a positive EBITDA figure of EUR 1 million, a huge advance on the EUR 170.4 million loss posted in 2001.
Depreciation and amortisation totalled EUR 505 million in 2002, slightly up on 2001 (EUR 497.7 million). Goodwill amortisation accounted for EUR 216.6 million. EBIT was negative at EUR 504.9 million, but showed a 24% improvement on 2001 (EUR -668.2 million).
The bottom line improved from a net loss of EUR 1.664 million in 2001 (partly due to substantial write-downs of a number of equity investments), to a net loss of EUR 593.1 million in 2002.
As of 31/12/2002 the Group held EUR 333.8 million in cash or cash equivalents, while net debt stood at EUR 134.7 million.
The shareholders’ meeting also approved the appointment of Gabriele Pretre to the board of directors, replacing James Kinsella who has resigned. In addition, new appointments were made to the board of auditors, which now comprises Aldo Pavan (Chairman), Piero Maccioni and Massimo Giaconia. Andrea Zini and Rita Casu were appointed as substitute auditors.
At the extraordinary shareholders’ meeting, five capital increases were approved pursuant to paragraph 4 of article 2441 of the Italian civil code:
2,162,139 ordinary shares to be issued for the contribution of a credit of EUR 9,860,000 held by Airtel Movil SA for the acquisition of Airtelnet, the Vodafone group’s Spanish internet access and fixed-line network;
2,290,924 ordinary shares to be issued for the contribution of a credit of EUR 9,500,000 held by Belgian company Wanadoo International SA for the acquisition of Wanadoo Belgium NV, one of the country’s leading ISPs and portals;
840,228 ordinary shares to be issued for the contribution of a credit of EUR 3,250,000 by US company VTL Inc, as part of the settlement of legal proceedings between VTL Inc and Tiscali Business GmbH, a German company in the Tiscali group;
152,380 ordinary shares to be issued for the acquisition from Dell Products (Europe) BV of UK company Tiscali Internet Limited, to which the Dell group has transferred its UK dial-up user base;
· 643,950 ordinary shares to be issued for the acquisition from the Telenor group of the Italian company Nextra SpA, one of Italy’s leading suppliers of internet services to the corporate sector.
Lastly, at the extraordinary shareholders’ meeting an amendment to article 11 of the company’s articles of association “Board of Directors” was approved. Under the amendment, lists of nominees for board positions are to be presented at least 10 days before the date of the shareholders’ meeting, in accordance with the recommendations of the Code of Conduct for Listed Companies.
Following the shareholders’ meeting, Tiscali’s Chairman and CEO Renato Soru underlined that the company’s operating performance in the first quarter of 2003 was in line with expectations, and explained that from 2003 onwards the company could commence benefiting from around EUR 1 billion of tax credits accrued in respect of previous years’ losses.
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