Tiscali 2013 Annual Report Download - page 61

Annual financial report as at 31 December 2013
Date
File Name
Status
Page
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Annual Report as at 31
December 2013
61
at 31 December 2013, the Group had a gross financial debt of EUR 201.7 million and current liabilities
greater than current assets (non-financial) for EUR 106.5 million.
As of 31 December 2012, the consolidated loss amounted to EUR 15.8 million, with negative
consolidated shareholders’ equity of EUR 147.2 million. Furthermore, as at 31 December 2012, the
Group had a gross financial debt of EUR 197.2 million and current liabilities greater than current
assets (non-financial) for EUR 119.6 million.
As from 2009, the Group, after having completed the disposal of Tinet and the UK subsidiaries,
allocating the proceeds of the sale to the repayment of part of the debt, implemented action with the
aim of achieving economic, equity and financial balance over the long term, and launching a phase of
recovery for the sales activities, which has been reflected in the business and financial plan.
In a recessionary context, the transformation underway for some years in the telecommunications
market has led to greater competitiveness and erosion of the revenues and the margin for the
operators.
Progressive saturation for the fixed network broadband market, the sharp competition of the data
proposals on the mobile networks and the possibility for customers to migrate from one operator to
another with minimum inconvenience and costs, led to greater acceptance by customers of
promotions, and as a consequence a tendency for prices to drop.
In the presence of such factors (and other collateral ones such as the progressive replacement of the
fixed lines with mobile ones, the increasing weight of the costs linked to customer service, the
establishment of the so-called Over-The-Top products), Tiscali, like the other telecommunications
companies, has rationalised its internal processes implementing rigorous cost cutting programmes to
preserve margins and maintain the competitive position, as well as to try and diversify its revenue
streams in web and Over-The-Top services.
During 2013, 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:
 management continued with action aimed at containing costs and, therefore, the greater
profitability of the telecommunications services;
 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;