Press Release in accordance with CONSOB Regulation No. 11971/1999 and subsequent modifications
Approval of the draft financial statements of DADA S.p.A. and of the DADA Group for the year ended December 31, 2005
DADA GROUP: RESULTS FOR THE YEAR 2005 APPROVED
REVENUES AT EURO 69.9 MLN (+45% COMPARED TO 2004), EBITDA AT EURO 12.7 MLN (+108%), NET PROFIT AT EURO 7.2 MLN
STRONG GROWTH OF INTERNATIONAL ACTIVITIES
The Board of Directors of DADA today approved DADA S.p.A. and DADA Group 2005 draft financial statements and called the DADA shareholders’ meeting for April 21 in first call and for April 28 in second call.
In 2005, DADA confirmed its leadership position in Italy in the community and entertainment services via web and mobile and continued its international expansion in the VAS mobile sector (mobile value added services) in new markets, such as the USA, England, France, Germany, Portugal and China.
* DADA Group revenues in 2005 amounted to Euro 69.9 million (+ 45% compared to 2004),
* EBITDA amounted to Euro 12.7 million (+108%),
* Net profit amounted to Euro 7.2 million (compared to a loss of Euro 2.7 million in 2004).
* The Net Financial Position at December 31, 2005 is a positive amount of Euro 23 million (+26%),
* The year 2005 saw the increase in the shareholding of Rcs MediaGroup in DADA to approximately 41.3% and the signing of a Shareholder Pact in compliance with article 122 of the Finance Act, between RCS and the management shareholders of DADA, regarding 55.9% of the share capital.
The year 2006 started for the DADA Group with the prospect of further growth in international markets with the entry into Brazil, China, Mexico and Canada, also through local partnerships. Further benefits may arise from the offer to the public of a new, innovative Social Networking platform, from commercial synergies with the main shareholder RCS MediaGroup and from the launch of the registrations of the new .EU European domains, a sector (that of domains) in which Register.it S.p.A. – held 97% by DADA - is leader in Italy. With reference to growth opportunities, DADA intends to play a primary role in the consolidation of the sector, which will see a strong development on international markets of community and entertainment services via web and mobile.
Florence, March 16, 2006 – The Board of Directors of DADA S.p.A. (MTAX STAR: DA.MI), under the chairmanship of Paolo Barberis, today approved DADA S.p.A. and DADA Group draft accounts as at December 31, 2005.
The year 2005 confirmed the leadership of DADA in Italy in the community and entertainment services market accessible by the final user via web and mobile, in view of the convergence between different media and the adherence to the so-called Web 2.0 principles, which places the individuals with their own content and information and their relations as the central axis of the Net.
Parallel to this, there was an acceleration in the expansion of the international activities of the Group, with the inclusion in the consolidation of DADAmobile Inc., a company incorporated in January 2005 and operating in the market of digital entertainment products and of the personalisation of mobile phones for end users.
On the corporate front, the year 2005 was characterised by the acquisition of a part of the share capital by Rcs MediaGroup, which on November 11, 2005 increased its shareholding to 41.3%, with a consequent launch of a Public Offer to Purchase the Company. Simultaneously, a Shareholder Pact was signed, in compliance with article 122 of the Finance Act, between Rcs and the management shareholders of DADA, totalling 55.9% of the share capital.
Also in relation to this, it should be noted that, on June 20, 2005, DADA approved a share capital increase to service a new three-year Stock Option Plan in favour of the employees of DADA S.p.A and of its subsidiaries, which provides the issue of 441,406 shares to be offered to employees of the Group in three annual tranches.
Finally, on July 26, the DADA Group acquired a further 29.5% of Register.it S.p.A., bringing its holding to 97% of the share capital of the company leader in Italy in the sector of domains, evolved hosting and professional mailboxes. Following this, on September 30, in application of the strategy to focus on “core” initiatives with greater added value, an agreement was signed for the disposal of the investment in Ad Maiora S.p.A.
During today’s meeting and in further execution of the powers given in the Shareholders’ Meeting of April 28, 2005, and partially exercised on June 20, 2005, the Board of Directors of DADA S.p.A. resolved to increase the share capital allocated for the issue of a new three-year Stock Option Plan in favour of the employees of DADA S.p.A. and its subsidiaries who did not benefit from the previous plan. In particular, the new plan provides for the issue of a total of 33,000 shares in three annual tranches.
Finally, the Board of Directors has called the DADA ordinary shareholders’ meeting for April 21 in first call and for April 28 in second call: among the items on the agenda are the approval of the financial statements for the year ended December 31, 2005, the renewal of the Board of Statutory Auditors and the Board of Directors and the appointment of the Audit Firm, all of which expire at the next Shareholders’ Meeting, in addition to the request to renew the authorisation to purchase and sell treasury shares.
Financial results
In 2005, DADA Group Revenues amounted to Euro 69.9 million (up 45% compared to the previous year), while consolidated EBITDA was positive for Euro 12.7 million, with an 18% margin on consolidated revenues and a growth of 108% compared to Euro 6.1 million in the previous year.
The Operating Result in 2005 was a profit of Euro 8 million, reporting a significant increase compared to the previous year, which recorded a loss of Euro 0.3 million. The amortisation and depreciation of intangible and tangible fixed assets amounted to Euro 3.3 million, a small increase compared to 2004, which amounted to Euro 3.1 million, due to the capital expenditures made during the year. The Net Result also improved significantly, amounting to Euro 7.2 million and equal to 10% of the consolidated revenues, compared to a loss of Euro 2.7 million in the previous year.
In 2005, the Parent Company DADA S.p.A. recorded a similar result to that at Group level. The total sales amounted to Euro 49.6 million, with an increase of 89% compared to 2004. It is recalled that on July 27, 2005, the Parent Company incorporated the 100% subsidiary companies Wireless Solutions S.p.A and Clamm S.r.l, with retrospective accounting effect to the beginning of the year.
With reference to the Parent Company, the Ebitda was Euro 9.4 million, a significant improvement compared to the previous year, which amounted to Euro 1.4 million.
The short-term Net Consolidated Financial Position at December 31, 2005 was a positive amount of Euro 23 million, compared to Euro 18 million at December 31, 2004 and Euro 21.6 million at September 30, 2005. During the year, therefore, there was an increase of over Euro 5 million in absolute terms, equal to over 26% on an annual basis. The fourth quarter recorded a positive cash flow of Euro 1.4 million, while in the same period of the previous year the cash flow was a positive amount of Euro 0.3 million.
It is important to underline that the performance in 2005 benefitted significantly from the strong growth of DADA on international markets. With reference to the final quarter of 2005, in particular, the international activities amounted to 16% of the consolidated sales.
Finally, it is reported that the international activities further increased in the first months of the current year.
Segment results
The revenues of the Consumer Division amounted to approximately 67% of the consolidated sales in 2005, compared to 57% in 2004.
In relation to this, it is recalled that the DADA Consumer offer is characterised by a rich range of “Mobile Entertainment” and “Community” digital products and services, accessible via web and mobile – through the SMS/MMS channel and the presence on the ‘Decks’, i.e. the micro-portals, of the main mobile phone operators. In this context, the DADA Group has achieved significant growth in terms of subscriptions, expressed through the brands www.dadamobile.com and www.supereva.com and the new beta.dada.net, which now represents 56% of the total consolidated sales and 81% of the division sales.
The uniqueness of the DADA services is the convergence of a vast number of applications and a rich library of content, from Entertainment/Infotainment to Social Networking and Dating, in a single all inclusive subscription, accessible via web and mobile.
The DADA consumer offer is available to users of over 20 mobile operators worldwide, in particular in Italy, USA, UK, Germany, France, Portugal and China, for a total “addressable market” of over 700 million mobile users on second and third generation networks.
The sales in the Consumer Division also include the revenues from the online advertising on the DADA property and from the interactive marketing initiatives.
The activities of the Business Division contribute 23% to the total annual turnover of the DADA Group and positions the Company among the leaders in Italy both in the design and realisation of infrastructures and for the offer of solutions to companies for the development of web-based projects.
In the development of technological applications for the internet, DADA has adopted a unique business model of its kind, the premise of which is the internal development and ownership of the technological platforms and applications that are tested and experimented on the companies network of portals and then packaged and offered to large Italian and multinational companies for covering all their internet related needs. In particular, the services offered by the Business division of DADA include the CMS and Community platform personalisation, as well as creative development for portals dedicated to on-line marketing.
In relation to the technological solutions developed by DADA for business clients, the marked increase in the demand of VAS mobile solutions is also noted, or rather platforms that permit companies to offer their base users content, services and applications available through mobile. DADA created, for example, the new information system via SMS of Trenitalia, that permits passengers to consult in real time the time tables and delays through a SMS short number 48.20.21, used by all the mobile operators. Also in relation to this, thanks to a partnership signed in July with Autostrade per l’Italia and with the mobile operator 3, a special service was provided dedicated to traffic and road conditions accessible via the mobile telephones of 3 Italia.
In this regard, it is noted that on September 30, in application of the strategy to focus on “core” initiatives with greater added value, an agreement was signed for the disposal of the investment of DADA in Ad Maiora S.p.A.
The result of the Self-Provisioning Division, which includes the subsidiary Register.it S.p.A., represents approximately 10% of the consolidated sales of the Group. Within the domestic market, Register.it operates as leader in the market of Internet domains, professional e-mails and evolved hosting, differentiating itself from low-cost national and international operators with its infrastructure and technological platform, among the most advanced worldwide.
The launch in June of the pre-registration of the .EU European domains, the new “entry level” offer of the domain and finally the increased advertising of its services were the key events in 2005 for Register.it.
With reference to the .EU domains, at December 31, 2005, Register.it had received over 140,000 requests from over 27,000 clients – 18,000 of which new clients - and currently represents alone approximately 37% of the total requests for new European domains made in Italy. In relation to the new proposition to the clients of Register.it, in 2005 the entry-level offer was completely renewed, with an increase in all web space limits and on e-mails included in the offer for each domain name.
Outlook for 20061
The year 2006 for the DADA Group started with the prospect of further international growth through the entry into the markets of Brazil, China, Mexico and Canada, also through agreements with local partners.
In particular, in relation to the DADA Consumer offer, in 2006 there will be a clear distinction between the “Dating” product – provided through the service of www.supereva.com - and the “Community and Personal Space” product – which will be accessible within a few weeks through a new, innovative Social Networking platform. The final objective of DADA is the creation of evolved models in which the distinction between Web and Mobile disappears, and in which the user does perceive being in either one or the other environment.
Further benefits for the DADA Group may arise during the year from commercial synergies with the main shareholder RCS MediaGroup and from the commencement of real-time registrations of the new .EU European domains, a sector, that of domains, in which Register.it S.p.A. – held 97% by DADA – is already Italian leader.
In relation to growth opportunities, DADA intends to play a primary role in the current sector consolidation process which will see strong international growth of the community and entertainment services via web and mobile.
The forecast of the Company for the year 2006 is of consolidated Revenues of between Euro 90 and 95 million and an average annual Ebitda growth rate (CAGR) in a range of between 15-20% in the three-year period 2006-2008.
1The forecasts contained in this document are subject to the risks and uncertainties relating to DADA and to the Internet, media and telecommunications markets. The forecasts are based on the information currently available and reflect the expectations of the management of the Group. The forecasts reflect market assumptions and other fundamentals which may modify and influence the actual future results. The forecasts assume organic growth and stability in the regulatory and commercial conditions in particular in the mobile telephony market.
This document does not represent a solicitation to purchase shares of DADA.
