Telecom Italia S.p.A.
Telecom Italia S.p.A.: Board of Directors approves the 2004 accounts -Part 1/2
Ad hoc announcement §15 WpHG – Part 1
Telecom Italia Group Results
Telecom Italia S.p.A.: Board of Directors approves the 2004 accounts -Part 1/2
Ad hoc announcement transmitted by DGAP.
The issuer is solely responsible for the content of this announcement.
——————————————————————————
Milan, February 24, 2005 – The Board of Directors of Telecom Italia, chaired
by Marco Tronchetti Provera, today examined and approved the Group and Parent
Company full-year 2004 accounts.
Telecom Italia Group Results
The scope of consolidation did not change significantly in 2004. It should
however be noted that, when comparing 2004 financial data with 2003 financial
data, Nuova Seat Pagine Gialle was excluded from the scope of consolidation
from August 2003; therefore Nuova Seat Pagine Gialle is only included in the
2003 financial data for the first seven months of 2003.
Revenues for 2004 amounted to 31,237 million euro, an increase of 1.3%
compared with the same period in 2003 (30,850 million euro). Excluding the
negative effects of exchange-rate fluctuations (175 million euro) and changes
to the scope of consolidation (895 million euro, of which 703 million euro
associated with the Nuova Seat Pagine Gialle disposal in August 2003), organic
growth was equal to 4.9% (+1,457 million euro).
Organic revenue growth was driven by the Mobile business unit (up 1,268
million euro), which performed well on the domestic and international markets,
and by the Wireline business unit (up 303 million euro), which continued
successfully to expand its broadband market, innovative services and enhanced
wholesale services.
The gross operating result, 14,528 million euro, grew 1.7% compared with 2003
(14,280 million euro), equal to 46.5% of revenues (46.3% for 2003).
Excluding the negative effects of exchange rate fluctuations (46 million euro)
and changes to the scope of consolidation (318 million euro), organic growth
was equal to 4.4% (612 million euro), and was driven by growth in the Mobile
Business Unit (586 million euro), Wireline (165 million euro) and Internet &
Media (27 million euro).
Operating income, equal to 7,200 million euro, grew by 6.1% compared with
full-year 2003 (6,789 million euro), following lower amortization of goodwill
arising from consolidation, and lower credit risk provisions. Operating income
was equal to 23.0% of revenues, compared with 22.0% for 2003. Organic growth
was up 9.3% (+610 million euro).
The result before extraordinary items and taxes was 5,366 million euro (4,525
million euro for 2003), and it benefitted from improved earnings and financial
performance. Notably, the financial position improved by 240 million euro,
compared with 2003, to -1,952 million euro.
Extraordinary income and charges brought a negative balance of 410 million
euro (against a negative balance of 1,083 million euro for 2003), an
improvement of 673 million euro.
Extraordinary income for 2004 amounted to 1,177 million euro.
Extraordinary charges for 2004 amounted to 1,587 million euro.
The pre-tax profit was 4,956 million euro, up 1,514 million euro compared with
2003 (3,442 million euro), owing to improved operating, financial and
extraordinary performances.
Consolidated net income prior to goodwill arising from consolidation was 2,311
million euro (3,445 million euro before minority interests), and was lower
than the 2003 figure of 2,983 million euro.
The Group registered a consolidated net profit of 781 million euro for 2004
(1,891 million euro before minority interests), down 411 million euro compared
with 2003 (1,192 million euro).
The Group’s positive performance at the operating, financial and extraordinary
levels more than offset the 2,040 million euro increase in taxes, compared
with 2003, which was generated by the one-off entry of deferred tax assets
(1,266 million euro for 2003) available after the Olivetti/Telecom Italia
merger, lower tax benefits arising from recovery of the levy on
telecommunications activities (230 million euro for 2004, compared with 562
million euro for 2003), and by higher operating income.
Industrial investments totaled 5,335 million euro, up 9.0% compared with 2003
(4,894 million euro) following higher investments by the Mobile Business Unit
(UMTS and Edge in Italy, and GSM in Brazil).
Net financial borrowings stood at 29,525 million euro, a reduction of 3,821
million euro compared with year-end 2003 (33,346 million euro).
Free cash flow from operations (EBIT + amortization – industrial investments
+/- change in working capital), totaled 9,887 million euro, an increase of 654
million euro (up 7.1%) compared with 2003, corresponding to 31.7% of revenues
(29.9% for 2003). Net cash flow was used to pay 1,952 million euro in net
financial charges, 1,326 million euro in direct taxation, and 2,780 million
euro in dividends.
Compared with September 30, 2004, debt was 1,896 million euro lower as a
result of free cash flow from operations, which was partially impacted by 880
million euro in direct taxes.
Cash cost efficiencies amounted to 771 million euro in 2004 and brought the
total for the period 2002-2004 to 3,021 million euro, exceeding the 2002-2004
target by 2.6 billion euro.
Group headcount at year-end 2004 was 91,365 (of whom 16,331 outside Italy), a
reduction of 1,822 on the year-end 2003 figure of 93,197. Changes to the scope
of consolidation saw 2,112 employees leaving the group, while the balance of
new hires and layoffs was as a positive 290. Labour costs totaled 4,037
million euro, down 6.1% compared with 2003. Labour costs were equal to 12.9%
of revenues, compared with 13.9% of revenues in 2003.
Further information please find on the website http://www.telecomitalia.it/
Telecom Italia S.p.A.
Piazza degli Affari 2
20123 Milan
Italy
ISIN: IT0003497168
WKN: 120470
Listed: Amtlicher Markt in Frankfurt (General Standard); Freiverkehr in
Berlin-Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart
End of ad hoc announcement (c)DGAP 24.02.2005
242115 Feb 05
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