Tiscali 2007 Annual Report Download - page 44

Gross Operating Result (EBITDA)
The Gross Operating Result in 2007, before provisions to risk
reserves, stock option plan costs, Pipex operating costs (regard-
ed as non-recurrent), as well as writedowns and
amortisation/depreciation, came to EUR 161.4 million, up by
61% when compared with the result of EUR 100.4 million in
2006. This result, as a percentage of revenues for the period,
increased to around 18%, involving an improvement of three
percentage points with respect to the result in 2006. This
improvement in profitability is linked to both the improvement
of the industrial margin due to the increasingly greater inci-
dence of customers linked to the Group’s direct network infra-
structure and to a reduction in the incidence of indirect costs,
as more fully analyzed below.
Net of the Pipex contribution, consolidated as from 13 Sep-
tember 2007, the Group’s gross operating result came to EUR
151.0 million (19% of revenues net of Pipex), systematic growth
therefore standing at 50%.
The
Gross Industrial Margin , understood to be revenues less
direct industrial costs, came to EUR 421.8 million in 2007
(up by 39% when compared with EUR 303.8 million in 2006).
As a percentage of revenues it increased from 45% to 46%,
due to the greater use of the direct network infrastructure.
Indirect operating costs (including payroll and related costs,
marketing and sales and other costs including general ones)
during 2007 amounted to EUR 261.8 million, up by 28% when
compared with EUR 205.3 million in 2006. As a percentage
of revenues, indirect costs were down, from 30% in 2006 to
29% in 2007.
Within indirect operating costs, payroll and related costs dur-
ing 2007 amounted to EUR 97.2 million, up in absolute value
with respect to the figure in the same period of 2006 (EUR
REPORT ON OPERATIONS
43
Tiscali’s strategy of posing itself as supplier of integrated
telecommunications services with Internet access services.
The voice segment was the one which during 2007 saw the
greatest growth, passing from EUR 112.2 million in 2006 to
EUR 232.8 million in 2007 (+ 107%); such growth was essen-
tially attributable to the dual play services which rose from EUR
32.1 million in 2006 to EUR 125.5 million in 2007, represent-
ing 54% of total voice revenues (+ 290% on an annual basis).
Business services
Revenues from business services (VPN, housing, hosting serv-
ices, domains and leased lines, etc.), therefore excluding those
from access and voice products for the same customer base
which are included in their respective business segments,
amounted in 2007 to EUR 64.3 million (a 45% increase over
the EUR 44.4 million of 2006). The business segment results
in part reflect a stronger strategic focus placed on access and
voice products by the Tiscali Group during the year.
Media and VAS – Value Added services
During 2007, revenues for this segment amounted to EUR 50.2
million, up by 19% when compared with 2006 (EUR 42.0 mil-
lion); such growth was linked to the pick-up in the on-line adver-
tising market, in part associated with the partnership with Google.
EUR (ml)
80
60
40
20
0
1° QUARTER 1° SEMESTER 9 MONTHS 12 MONTHS
13.0 26.9 42.7 64.3
BUSINESS SERVICES TREND IN 2007
EUR (ml)
60
45
30
15
0
1° QUARTER 1° SEMESTER 9 MONTHS 12 MONTHS
12.4 24.5 36.5 50.2
MEDIA AND VAS SERVICES IN 2007
GROSS OPERATING RESULT TREND IN 2007
GROSS OPERATING RESULT ON REVENUES
EUR(ml) % ON REVENUES
180
160
140
120
100
80
60
40
20
0
40%
35%
30%
25%
20%
15%
10%
1° QUARTER 1° SEMESTER 9 MONTHS 12 MONTHS
61.9
16%
103.5
17%
161.4
18%
25.2
13%