Tiscali 2012 Annual Report Download - page 120








15
During 2012, from an operational point of view, action by the Group continued aimed at improving
efficiency via the rationalisation of the operating and commercial costs and overheads, in particular:
• industrial costs were positively affected by the savings deriving from agreements entered into
as from 1 August 2011 with the main network and traffic suppliers, which made it possible in
2012 to obtain savings of around EUR 10 million. It is envisaged that these savings will be
consolidated also in the years to come;
• payroll and related costs were positively affected by the decrease deriving from the application
of the Solidarity Agreement with the employees (pursuant to Italian Law No. 863 dated 1984)
entered into during the second half of 2011, with a duration of 24 months. The reduction in staff
costs with respect to 2011 amounts to around EUR 4.3 million; The Solidarity Agreement is
renewable until November 2016.
• the strategy continued for the application of more stringent control policies on the incoming
customer base, which led to a reduction in volumes, but at the same time an improvement in
the quality of the customer base and the consequent cash flows. In detail, once again in 2012,
action continued for the progressive reduction of the customers who pay via post office paying-
in slip or credit transfer (who present greater rates of insolvency) to the benefit of automatic
payment methods (direct debit and credit cards);
• as from 1 July 2012, the decrease in the mobile termination tariff (both at cost and revenue
level), sanctioned by means AGCOM resolution, led to a positive net effect of around EUR 4.7
million for 2012.
From the point of view of the business results for the year, in detail we can reveal that:
• in the last quarter of the year, partly thanks to the aggressive sales policies and the optimum
performance of the web sales channels, the decreasing trend in the customer base reversed
(both single and double play) with a pick-up in the same; this bears witness to the strength of
the Tiscali brand and the quality of the Company’s services;
• media revenues increased 11.7% with respect to the previous year, thanks to the improvement
in the editorial product on tiscali.it (news oriented), the innovation of the formats and sales
strategies (theme-based channels, interactivity with social networks and with the mobile
internet, etc.), factors which made it possible to make traffic on the portals of the network more
profitable;
• the Group continued to focus on innovation. In particular, mention is made of the Indoona
service (a rich communications service dedicated to smartphones, tablets and PCs), which
confirms the historic positioning of Tiscali as innovative operator in the sphere of internet
services, and which achieved more than one million downloads. Istella was recently launched,
an innovative search engine dedicated to the Italian language which facilitates the active
contribution by users.
The action described above made it possible to maintain a cash flow from the operating activities
(before the changes in working capital) in line with the previous year (EUR 60 million), contributing
towards reducing the financial debt and the exposure to suppliers. In detail, operations made it possible
to honour the due dates relating to financial debt related to the loan agreement taken out on 2 July 2009
(“Group Facility Agreement” or “GFA”), both in terms of principal and interest. As envisaged by the GFA
and reflected in the financial plan, during 2012 the Group made a payment to the financial institutions
amounting to EUR 7.8 million (of which EUR 2.8 million for interest).