RETELIT S.P.A. 
By 2. The update to the objectives of the 2013-2017 Industrial Plan confirms profits for 2014 and envisages, for the 2014-2017 period a compound annual growth rate (CAGR) of turnover of 19.0% and a gross operating margin (EBITDA) of 27.5%. In 2017, the value of production will be euro 75.4 million, with EBITDA at euro 25.6 million. The plan sees investments totaling euro 77.5 million over the five years and total cash generation of euro 43.1 million.
1. 2013 results show that the consolidated value of production at the end of the year amounted to euro 39.0 million compared with euro 37.3 million in the previous year, with an increase of 4.5%. The consolidated Gross Operating Margin (EBITDA) came to euro 10.5 million, against euro 9.7 million in the previous year, an increase of 8.1%. The consolidated net loss for 2013, euro 0.9 million, was a notable improvement compared with the euro 3.6 million loss for 2012. The figures indicate the substantial achievement - for the value of production and EBITDA - and exceeding of - for the consolidated net result - of that envisaged for
2013 in the industrial plan.
In 2013, investments amounted to euro 7.1 million and were related to the development of customers connections , improvements to the Data Centers and to the optical fibre network. In particular, we note the activations of the new 100G DWDM system and the backbone Carrier Ethernet MPLS network, an important element in the release of new level 3 services (VPN networks).
The net consolidated financial position at the end of 2013 iwas euro 20.0 million, a significant improvement over the 2012 figure of euro 8.2 million. Receipt of the annual rental payment and the first payment relative to the sale of the WiMAX business unit also contributed to the increase, for a total of euro 7.1 million, in addition to the positive operating cash flow, as well as the amounts deriving from the exercise of the 2008-2013 Retelit Warrants, for euro 2.2 million.
Cash and cash equivalents of the Group amounted to euro 20.0 million compared to euro 11.1 million in
2012. In 2013, all financial debts were completely extinguished.
Network coverage has been extended by a further 119 km compared to the end of 2012, reaching 7,653 km of which 1,983 km in urban areas.
At 31 December 2013, staff totaled 60 employees, with an increase of 10, in line with the forecasts in the
Industrial Plan.
It should be noted that auditing work is still ongoing for the figures noted here.
2. On 14 March 2014 the Company's Board of Directors also revised the 2013-2017 Industrial Plan and approved the budget for 2014 to keep track of the various developments in the initiatives underway. The revision confirmed the strategic lines identified in the 2013-2017 Industrial Plan, which aims to take advantage of the Group's unique strengths, focusing on four main areas of action:
• growth in the wholesale telecommunication services market
• offer of connectivity services to medium-sized private companies
• offer of connectivity services to public administrations, including schools and health structures
• development of international projects, also in partnership with the Libyan Post
Telecommunication and IT Company (LPTIC), Retelit shareholder.
The commercial business will be supported by offering ultrabroadband and IP telecommunications services with high added value, virtual private network (VPN) services and data centre services.
The optical fibre network will be extended also with backhauling connection projects developed for mobile
telecommunications operators; expansion internationally will be assured through the creation of a
European backbone network and the opening of further points of presence at the main interconnection hubs. Specifically, the revision of the 2013-2017 Industrial Plan defined the following objectives:
• compound annual growth rate (CAGR) of revenues: 19.0% (17.7% in 2013-2017 Plan);
• compound annual growth rate (CAGR) for the gross operating margin (EBITDA): 27.5% (24.9% in
2013-2017 Plan);
• expected value of production in 2017: euro 75.4 million (euro 73.9 million in 2013-2017 Plan);
• gross operating margin (EBITDA) expected in 2017: euro 25.6 million (euro 26.0 million in 2013-
2017 Plan);
• total investment planned in the five years: euro 77.5 million (euro 75.0 million in 2013-2017 Plan);
• total cash generated in the five years: euro 43.1 million (euro 42 million in 2013-2017 Plan);
Below are the main objectives related to the 2014 budget approved by the Board: Revenues euro 40.1 million, Gross operating margin (EBITDA) euro 10.2 million, net income before taxes euro 0.1 million, total investments euro 18.4 million.
The updated Business Plan shows the achievement of a positive net income before taxes in 2014, including the costs for remuneration of the board.
During the first part of this year, the Operations Management has carried out an in-depth technical analysis of the network infrastructure (fibre-optic and cable ducts) in order to evaluate the technical/economic obsolescence status, also taking into account the duration of the recent commercial contracts to sell usage rights for the same. This analysis - carried out with the assistance of an external engineering company, which did a specific technical evaluation - confirms the extension of the useful life, also taking into consideration the limited amount of wear on the same and the limited levels of ordinary maintenance required. Hence, the Board, on the basis of the technical appraisals received, decided to prospectively review the estimate of the useful life of the fibre-optic network in relation to the ducts and fibre, taking them respectively to 40 years, previously 30 years, and 25 years, previously 20 years. This change of the depreciation periods, which will be operational from 2014, is in line with the timeframes used by other telecommunication operators. This depreciation alignment leads to an improvement in operating income and income before taxes of approximately euro 1.8 million per year. This expected improvement is incorporated into the 2014 budget and the updated Industrial Plan.
Note that this press release contains forward-looking statements about the Group's intentions, beliefs and current expectations with regard to its financial results and other aspects of the Group's operations and strategies. Readers of the present press release should not place undue reliance on such forward-looking statements, as final results may differ significantly from those contained in the above-mentioned forecasts owing to a number of factors, the majority of which are beyond the Group's control.
The Manager in Charge of the Company's Financial Reports, Ivano Barzago, declares, in compliance with the second paragraph of article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the books.
With the availability of over 7,600 kilometres of fibre optics, 8 Metropolitan Networks and 18 Data Centers, Retelit is one of the leading Italian providers of data transmission services and infrastructure for the telecommunications and ICT markets. Since 2013, thanks to important investments in new technologies, Retelit's product range has widened with new generation ultra-broadband VPN services, as well as Cloud Storage and Data Center services providing added value. Since 2000 Retelit has been listed on the MTA market of the Milan stock exchange.
Investor Relations | Media Relations |
Ivano Barzago Tel. 022020451 inv.relations@retelit.it | Valeria Penati - Key4media Tel. +39 02 430019156 Mob. +39 335 7746127 v.penati@key4media.it |
(€ thousand) 31/12/2013 31/12/2012
Non-current assets:Network infrastructure | 101.139 | 104.654 |
Other property, plant and equipment | 449 | 316 |
Total property, plant and equipment | 101.588 | 104.970 |
Concessions, licences, trademarks and similar rights | 22.647 | 24.733 |
Other intangible assets | 60 | 91 |
Total intangible assets | 22.708 | 24.824 |
Non-current financial assets Tax and VAT receivables and non-current direct taxation Prepaid tax assets | 14.549 - 7.200 | 22.815 - 7.200 |
Other non-current assets | 260 | 270 |
Total other non-current assets | 22.009 | 30.285 |
TOTAL NON-CURRENT ASSETS | 146.304 | 160.079 |
Current assets: | ||
Current financial assets | 4.261 | 848 |
Trade and miscellaneous receivables, and other current assets | 15.308 | 17.454 |
of which related parties | 329 | 390 |
Tax and VAT receivables and current direct taxation | 30 | 118 |
Cash and cash equivalents | 19.862 | 11.148 |
TOTAL CURRENT ASSETS | 39.461 | 29.568 |
TOTAL ASSETS | 185.765 | 189.647 |
Equi ty: | ||
Issued share capital | 144.209 | 144.033 |
Reserves and net income for the year | (7.208) | (8.365) |
Equi ty and net i ncome for the year | 137.000 | 135.668 |
TOTAL EQUITY | 137.000 | 135.668 |
Non-current li abilities: | ||
Non-current financial liabilities | - | 2.138 |
Employee benefits | 963 | 911 |
Provisions for contingencies and charges | 2.880 | 4.205 |
Non-current deferred revenue | 20.575 | 20.777 |
TOTAL NON-CURRENT LIABILITIES | 24.418 | 28.030 |
Current li abilities: | ||
Current financial liabilities | 0 | 1.624 |
Trade payables, miscellaneous payables and other current liabilities | 21.918 | 22.134 |
of which related parties | 1.265 | 2.106 |
Tax and VAT payables and current direct taxation | 387 | 259 |
Current deferred revenue | 2.041 | 1.932 |
TOTAL CURRENT LIABILITIES | 24.347 | 25.949 |
TOTAL LIABILITIES | 185.765 | 189.647 |
(€ thousand) 31/12/2013 31/12/2012
Revenue of which related parties | 37.488 | 36.059 |
Revenue of which related parties | 119 | 64 |
Other income | 1.477 | 1.237 |
Total revenues and operati ng i ncome | 38.966 | 37.296 |
Raw materials and outside services | (18.918) | (17.519) |
of which related parties | (1.345) | (1.301) |
Personnel costs | (4.755) | (5.093) |
Other operating expenses | (4.839) | (5.018) |
OPERATING INCOME BEFORE AMORTIZATION, DEPRECIATION AND IMPAIRMENT | 10.454 | 9.667 |
Amortisation, depreciation and impairment of tangible and intangible assets | (12.572) | (12.575) |
Other provisions and write-downs | (524) | (2.191) |
OPERATING INCOME | (2.643) | (5.100) |
Financial income | 1.902 | 1.741 |
Financial expense | (135) | (194) |
RESULT BEFORE TAXES | (876) | (3.552) |
Income taxes for the year Deferred tax liabilities | - - | - - |
Net i ncome/(l oss) for the year | (876) | (3.552) |
Net income/(loss) for the year attributable to equity holders of the Parent | ||
Company | ||
Profit (loss) entered under Shareholders' Equity | 15 | (109) |
Total resul t for the year | (861) | (3.661) |
CONSOLIDATED CASH-FLOW AT 31/12/2013
******(€ thousand) 31/12/2013 31/12/2012
CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss) (876) (3.552)
Adjustments:
Amortization 12.572 12.575
Write-downs 197 478
Change in employee benefits 67 71
Change in provisions for contingencies and charges (1.325) 1.506
Interest and financial charges paid (1.767) (1.548) CASH FLOWS GENERATED BY (USED FOR) OPERATING ACTIVITIES 8.869 9.530 (Increase)/Decrease in inventories
(Increase)/Decrease in trade receivables and other current assets 1.949 (1.559) (increase)/Decrease in tax and VAT receivables and direct taxation 88 (47) Increase/(Decrease) in trade payables and deferred revenues (308) 680
Increase/(Decrease) in tax and VAT payables and current direct taxation 128 (138) NET CHANGE IN CURRENT ASSETS AND LIABILITIES AND OTHER CHANGES 1.858 (1.063) FINANCIAL FLOWS GENERATED BY (USED FOR) OPERATING ACTIVITIES 10.727 8.467
Acquisition of property, plant and equipment (5.625) (5.844) Disinvestment of property, plant and equipment 210
Acquisition of intangibles assets (1.449) (1.175) Net acquisition of other non-current assets 10 39
(Increase)/Decrease in financial assets 2.858 (915)
Change in share capital and reserves 2.195 93
Euro 31/12/2013 31/12/2012
Non-current assets:Other property, plant and equipment | 178.743 | 151.660 |
Total property, plant and equipment | 178.743 | 151.660 |
Intangi bl e assets | ||
Concessions, licences, trademarks and similar rights | 66.460 | 58.970 |
Total intangible assets | 66.460 | 58.970 |
Equity investments | 142.618.209 | 142.618.209 |
Other non-current assets | 1.504 | 5.327 |
Total other non-current assets | 142.619.713 | 142.623.536 |
TOTAL NON-CURRENT ASSETS | 142.864.915 | 142.834.166 |
Current assets: | ||
Financial assets to related parties - 222.925 | ||
Trade and miscellaneous receivables, and other current assets | 1.212.156 | 833.406 |
of which related parties | 1.145.237 | 711.085 |
Tax and VAT receivables and current direct taxation | 29.587 | 57.627 |
Cash and cash equivalents | 8.640.396 | 9.405.272 |
TOTAL CURRENT ASSETS | 9.882.139 | 10.519.229 |
TOTAL ASSETS | 152.747.054 | 153.353.396 |
Equi ty: | ||
Issued share capital | 144.208.619 | 144.033.108 |
Reserves and net income for the year | 5.397.267 | 6.083.065 |
Equi ty and net i ncome for the year | 149.605.886 | 150.116.173 |
Portion attributable to minority interests - - | ||
TOTAL EQUITY | 149.605.886 | 150.116.173 |
Non-current li abilities: | ||
Employee benefits | 272.156 | 296.959 |
Provisions for contingencies and charges | 198.527 | 1.309.327 |
TOTAL NON-CURRENT LIABILITIES | 470.683 | 1.606.286 |
Current li abilities: | ||
Trade and miscellaneous payables, and other current liabilities | 2.283.366 | 1.372.152 |
Tax and VAT payables and current direct taxation | 387.119 | 258.784 |
TOTAL CURRENT LIABILITIES | 2.670.485 | 1.630.937 |
TOTAL LIABILITIES | 152.747.054 | 153.353.396 |
Euro | ||
Revenue | 64.620 | 70.445 |
Other income | 1.452.114 | 1.230.885 |
of which related parties | 1.364.264 | 1.175.444 |
Total revenues and operati ng i ncome | 1.516.734 | 1.301.330 |
Raw materials and outside services | (2.412.104) | (1.796.206) |
Personnel costs | (1.531.682) | (2.382.480) |
Other operating expenses | (375.388) | (442.695) |
OPERATING INCOME BEFORE AMORTIZATION, DEPRECIATION AND IMPAIRMENT | (2.802.440) | (3.320.051) |
Amortisation, depreciation and impairment of tangible and intangible assets | (54.587) | (61.309) |
Other provisions and write-downs - (1.150.544) | ||
OPERATING INCOME | (2.857.027) | (4.531.904) |
Financial income | 148.090 | 82.752 |
Financial expense | (332) | (119) |
RESULT BEFORE TAXES | (2.709.269) | (4.449.272) |
Income taxes for the year Deferred tax liabilities | - - | - - |
Profi t/(Loss) for the peri od | (2.709.269) | (4.449.272) |
Net income/(loss) recognised under Equity recirculating from the Income
Statement
Net income/(loss) recognised under Equity not recirculating from the Income
Statement 5.093 (37.693)
Total Profi t / (Loss) for the peri od (2.704.176) (4.486.965) Retel i t S.p.aCash Fl ow Statement
******(€ thousand) 31/12/2013 31/12/2012
CASH FLOWS FROM OPERATING ACTIVITIESProfit (loss) for the period (2.709) (4.449)
Adjustments:
Amortization 55 61
Write-downs 21
Change in employee benefits (20) 10
Change in provisions for contingencies and charges (1.111) 1.130
Interest and financial charges paid (148) (83) CASH FLOWS GENERATED BY (USED FOR) OPERATING ACTIVITIES (3.934) (3.311) (Increase)/Decrease in trade receivables and other current assets (379) 9.842 (increase)/Decrease in tax and VAT receivables and direct taxation 28 (20) (Increase)/Decrease prepaid tax credits
Increase/(Decrease) in trade payables and deferred revenues 911 (375) Increase/(Decrease) in tax and VAT payables and current direct taxation 128 (138) NET CHANGE IN CURRENT ASSETS AND LIABILITIES AND OTHER CHANGES 689 9.310
(investments) in property, plant and equipment (49) (60) (investments) in intangible assets (40) (9) Net acquisition of other non-current assets 4 (4) CASH FLOWS GENERATED BY (USED FOR) INVESTING ACTIVITIES (85) (73)
CASH FLOWS FROM FINANCING ACTIVITIES
(Increase)/Decrease in financial assets 371 232
Share capital increase 2.195 93
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