Tiscali 2003 Annual Report Download - page 20

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21
Tiscali Group: operating performance
2003 was a year of consolidation for Tiscali, including the completion of the Group’s reorganisation after the series of acquisitions
made in 2000-2001. In addition, the significant increase in visibility of the business model in the European Internet sector has
enabled the Group to focus on its targets, improving its planning activities both internally and externally.
In particular, Tiscali’s strategic positioning changed: with seven million dial-up users throughout Europe, the Company has now
established itself as a provider of broadband Internet access services. This was made possible by a significant improvement in the
regulatory situation for this market in Europe and an effective and targeted sales policy.
Growth in the number of ADSL users accelerated in 2003, boosting access revenues. EBITDA also improved, and was positive for
the fifth quarter in a row, while the EBITDA margin expanded to 8.2% year on year. The EBITDA figure improved in all of Tiscali’s
main markets, where the Group reported operating breakeven for the full year before depreciation and amortisation.
Tiscali has now achieved a critical mass of broadband customers, and given their potential in raising ARPU (average revenue per
user), in 2003 the Group began to adopt a strategy of selective unbundling in the Netherlands and Denmark. Offering unbundled
broadband enables Tiscali to control the quality of the service delivered to its customers and provide “triple play” packages of
data, voice and content. The tariff structure of unbundled services means that the Group can substantially increase the profitabi-
lity of Internet access (see earlier section on the broadband market).
Revenues rose by 20% on the previous year to EUR 901 million, driven by growth in the access business, particularly broadband
services, which grew at a faster rate than the market average. Business services also contributed to the rise in revenues, following
acquisitions in Italy, France and Austria carried out in early 2003
-800
-600
-400
-200
0
200
400
600
800
1,000
Revenues Gross margin EBITDA
EBIT Net income
FY 2002 FY 2003
mln
794.4
901.1
364.8
455.2
74.7
-399.8
-228.8
-593.1
-242.4
1
Key Figures