Tiscali 2013 Annual Report Download - page 128

Annual financial report as at 31 December 2013
Date
File Name
Status
Page
-
Annual Report as at 31
December 2013
128
 in November 2013, the Solidarity Agreement was renewed with the employees (as per Italian
Law No. 863 dated 1984) for a further 24 months, having been originally entered into in 2011;
 the strategy continued for the application of more stringent control policies on the incoming
customers, which led to an improvement in the customer base and the consequent cash flows.
In detail, once again in 2013, 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);
 management adopted specific action for improving the working capital aimed at reducing the
average collection days.
From the point of view of the business results for the year, in detail we can reveal that:
 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 with respect to last year (the sales policies in question what is more led to
a reduction on the ARPU of the ADSL with related impacts on the revenues of the Access and
VOIP segment);
 media revenues disclosed a trend essentially in line with that last year, despite the sharp drop in
the advertising market which also affected the digital media segment;
 revenues deriving from business services (VPN, housing, domains and leased lines) disclosed
an increase of 10% with respect to last year;
 the Group continued to focus on innovation:
o on 19 April 2013, the official launch took place for the search engine “Istella”, presented to
market operators and analysts. Istella is an innovative search engine dedicated to the
Italian language which facilitates the active contribution by users;
o Indoona (a rich communications service dedicated to smartphones, tablets and PCs),
which achieved more than 1.7 million downloads, confirms the historic positioning of Tiscali
as innovative operator in the sphere of internet services;
o Streamago was completely overhauled.
During the year, the Group also benefited from:
 the closure of a number of settlement transactions with the leading suppliers of network services
which had a positive effect for around EUR 8.5 million, and
 the improvement in the regulatory conditions on access services on the fixed network which
permitted a saving of around EUR 8 million (and which will permit savings also in coming years).
All the activities listed above made it possible to generate cash and cash equivalents from operating
activities for around EUR 32 million, contributing towards reducing the Group’s overall debt.
In detail, during the year the Group honoured the due dates relating to financial debt deriving from the
loan agreement taken out by the Group companies 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 2013 the Group made payments to the related financing institutions amounting to EUR 9
million (of which EUR 1.5 million for interest).
As at 31 December 2013, however, certain of the financial parameters envisaged by the same GFA
were not observed. In accordance with the provisions of the GFA, these violations represent a so-
called Event of Default further to which the financing institutions could decide - with the favourable
vote of parties which overall hold more than two thirds of the debt deriving from the GFA - to declare
the entire amount of the loans due and collectable and therefore request the repayment of all that is