Press Release in accordance with CONSOB Regulation No. 11971/1999 and subsequent modifications
Second Quarter Results 2007:
REVENUES INCREASED TO EURO 37.9 MILLION (+45% compared with Q2 2006)
EBITDA INCREASED TO EURO 5.5 MILLION (+41%)
EBIT AT EURO 4.0 MILLION (+54% and equal to a margin of 11%)
NET PROFIT AT EURO 3.4 MILLION (equal to a margin of 9%)
NET FINANCIAL POSITION AS AT JUNE 30, 2007 INCREASED TO €17 MILLION as compared with Euro 11.8 million on December 31, 2006 (+44%)
THE JOINT VENTURE WITH SONY BMG AND THE ACQUISITION OF NAMESCO CONCLUDED IN JULY
- Consolidated revenues in the second quarter 2007 amount to Euro 37.9 million: + 45% compared with Q2 2006. Specifically, strong revenue growth is from international activities which now represent 42% of overall sales compared with 37% in the second quarter 2006.
- EBITDA* increased to Euro 5.5 million (Euro 3.9 million in Q2 2006), despite strong investments made for launching international activities and the development of the Dada.net community, which today counts more than 8 million users from 30 countries, with an average daily increase of 40,000 new subscribers all over the world.
- EBIT at Euro 4.0 million growing 54% compared to Q2 2006 and with a margin of 11%.
- Net Profit amounts to Euro 3.4 million, compared to Euro 2.9 registered in the second quarter of 2006 and equal to 9% of consolidated revenues.
- Net financial position as at June 30, 2007 rose to Euro 17 million, growing by 44% compared with data from December 31, 2006.
- Two strategic operations subsequent to closing: the 100% acquisition of the UK company Namesco Ltd and the creation of the joint venture “Dada Entertainment LLC”, the product of cooperation between Dada and SONY BMG MUSIC ENTERTAINMENT.
- The new, internal, organizational structure was approved and a new member was co-opted.
Milan, July 27, 2007 – The Board of Directors of Dada (MTAX STAR: DA.MI), chaired by Paolo Barberis, today approved the Dada Group Consolidated Quarterly report as at June 30, 2007.
In the second quarter of 2007 Dada pursued the consolidation of its leadership in Italy in the community and entertainment products and services market via web and via mobile, as well as the growth of its market shares internationally in the same sector. Dada is in fact present today with its multimedia community Dada.net (www.Dada.net) in 30 countries, with an average daily increase of 40,000 new users per day, of which nearly half are paying customers from Brazil, Italy the U.S. and Spain.
The excellent result of the expansion strategy of Dada services abroad has led to a rise in the international component of the quarter’s revenue mix, with profits from international activities currently representing 42% of consolidated revenues, compared with 37% for the second quarter of 2006.
Economic Financial Results
At Group level, the Consolidated Revenues of the second quarter of 2007 rose to Euro 37.9 million growing by 45% compared with the same period of the previous financial report.
EBITDA registered a 41% increase to Euro 5.5 million (it was Euro 3.9 million in the second quarter of 2006), with a margin on consolidated sales of 14.5%. These results were possible despite strong investments made for launching international activities, which today allow Dada to count more than 8 million users all over the world.
EBIT in the second quarter of 2007 amounts to Euro 4.0 million, equal to 11% of consolidated revenues, growing by 54% compared with the same period of the previous financial report, in which it was Euro 2.6 million.
Net profits are equal to Euro 3.4 million, with an incidence of 9% on consolidated revenues, compared with Euro 2.9 million registered in the second quarter of 2006.
In the first semester of 2007 the Group’s consolidated revenues amount to Euro 73.4 million, growing by 50% compared with the first semester of the 2006 financial year and EBITDA is equal to Euro 10.3 million, growing by 43% compared with the same period of the previous financial year. The EBIT of the first semester of 2007 amounts to Euro 7.8 million (increasing by 52% compared with the first semester of the 2006 financial year) and presents a margin of 11% on revenues. Net Profits in the first 6 months of 2007 are therefore equal to Euro 6.5 million, with a 43% increase compared with 4.6 million in the same period of the previous financial year and with an incidence of 9% on consolidated revenues.
The Net Financial Position as at June 30, 2007 registered positive at Euro 17 million, increasing by Euro 5.2 million (44%) compared with the value registered on December 31, 2006, which was equal to Euro 11.8 million. The performance of these figures was impacted by investments made in this period and specifically that of 30% of E-Box S.r.l. – the owners of the platform Blogo, the most visited vertical blog network in Italy – the second closing for the acquisition of Cotei, in preparation for the purchase of Nominalia S.L., the leading Spanish Internet domain name registrar. Investment activities were also related to the purchase of tangible assets for renewing and expanding the technological structure, as well as the remodeling of the new office for Euro 2 million, in addition to new product and service development expenses and other important tangible assets for Euro 1.7 million, while there was also a financial contribution deriving from the second tranche of 2005 stock options, equal to Euro 1.4 million.
Perimeter of consolidation
In comparing the quarters it is noted that the following changes were made in the consolidation
area:
- in the second quarter of 2006 the company Planet Com S.p.A. was fully consolidated (sold in July 2006) and 50% of holdings in Softec S.p.A. (sold in June 2007 with a capital gain of Euro 350,000) which contributed Euro 2.7 million to revenues;
- in the second quarter of 2007 the following companies were entirely consolidated: Nominalia S.L. (acquired in July 2006), Upoc Networks Inc. (acquired in August 2006), Tipic Inc. (acquired in November of 2006) and the company Dada Brasil (operative since December 2006) with a total financial contribution to quarterly sales revenues of Euro 4 million.
The changes made for consolidation positively impacted on the EBITDA by Euro 250,000 for the second quarter of 2007 compared with the second quarter of 2006.
Business Results
Starting from the financial period in progress Dada has organized its activities around 3 main areas of business: Dada.net (community & entertainment services), Dada.adv (sale of advertising space on the web and via mobile) and Dada.pro (professional services for a presence on the Net).
- The Dada consumer offering is directed to the final user and is based on the business unit dada.net, represented by the community www.dada.net, with which Dada offers a rich bouquet of products and digital services including “Mobile Entertainment” and “Community” accessible by PC and by mobile device - via SMS/MMS and through the presence on the ‘Decks’, or rather the micro-portals of the main cellular operators. What makes Dada’s offering unique is the convergence of a vast number of applications and a rich library of content, from Entertainment/Infotainment and Social Networking to Dating, in a single all-inclusive subscription, accessible via Web and via Mobile.
In the second quarter of 2007 the Dada.net business unit contributed to 73% of consolidated revenues.
- Through the business unit Dada.adv and the brand Dada Ad, Dada is able to develop advertising solutions on the internet and on UMTS portals of mobile phone operators. Dada Ad is in fact the advertising agency for Dada and exclusively manages advertising space on 3 Italia, Vodafone and ANSA mobile phones (through a Wind platform), in addition to advertising space on well-known sites and portals. To further develop the sales possibilities of the Dada Ad advertising agency, last June an agreement between ANSA and Dada was announced for the exclusive sale of advertising space on the new Outdoor TV circuit of the prestigious news agency.
In the quarter analyzed Dada.adv contributed to 16% of consolidated revenues.
- Dada.pro combines the activities of Register.it S.p.A., historic leader in the registration of internet domains and the management of the online presence of people and companies, which in 2006 acquired Nominalia S.L. and a few days ago Namesco Ltd., top players in Spain and the UK in the hosting and domain sector.
In the quarter analyzed Dada.pro contributed to 11% of consolidated revenues
Extraordinary operations subsequent to the closing of the second quarter of 2007
There were two strategic operations that took place after the closing of the financial period analyzed: the above mentioned acquisition of 100% of the shares of the UK company Namesco market leader in domains & hosting and the creation of the joint venture “Dada Entertainment LLC” product of cooperation between Dada and SONY BMG MUSIC ENTERTAINMENT aimed at developing a new offering of entertainment services accessible via web and mobile.
Through the new joint venture, initially directed toward the U.S. consumer market, SONY BMG and Dada will offer the latest generation web & mobile consumer entertainment services that will combine a rich selection of music content, including ringtones, images, video ringtones, games for mobile phones, backgrounds and audio & video in integral formats, also in virtue of Dada’s longstanding experience in the area of community web 2.0 and social networking.
New organizational structure and co-opting of new member
As further deployment of the present internal organization, today the Board entrusted President Paolo Barberis with the power of all the areas of management of the company.
Furthermore, in line with the reorganization, the Board entrusted Angelo Falchetti with the power to undertake his new position as Chief Operating Officer of the Company, likewise the Board entrusted Lorenzo Lepri with the power to undertake his position as Chief Development Officer and Marco Argenti with the power to undertake his position as Manager for the Dada.net area.
The Board has duly noted the resignation of Alberto Ronzoni and has therefore co-opted as a new member Monica Alessandra Possa, Director of Human Resources and Organization at the RCS MediaGroup S.p.A..
* before write-downs and extraordinary items
