Press Release in accordance with CONSOB Regulation No. 11971/1999 Florence, May 9, 2005 - The Board of Directors of DADA (TechStar di Borsa Italiana: DA.MI) today approved the Quarterly report at March 31, 2005.
FIRST QUARTER REPORT 2005:
REVENUES AT EURO 14.5 MILLION (+48% COMPARED TO Q1 2004)
EBITDA AT EURO 3.0 MILLION (EQUAL TO 21% OF REVENUES)
POSITIVE EBIT AT EURO 1.9 MILLION
- Consolidated revenues at Euro 14.5 Million: +48% compared to Q1 2004.
- In particular, Revenues in the Consumer Division: + 116% compared to Q1 2004.
- Operating results before goodwill amortisation profit of Euro 2.1 Million.
- EBITDA Positive for Euro 3 Million (Euro 1.2 Million in Q1 2004).
- Pre-tax profit of Euro 1.9 Million, compared to a loss of Euro 1.1 Million.
- Net Financial position equal to Euro 23.4 Million, Euro + 3.3 Million in the quarter.
- Approved the merger by incorporation into DADA S.p.A of the wholly owned companies Wireless Solutions S.p.A. and Clamm S.r.l.
In the first quarter of 2005, DADA further strengthened its Italian leadership in the entertainment and community market of products/services accessible via web, through pc, and via mobile.
The period was also marked by the internationalisation of DADA in the VAS mobile market through the portal http://www.dadamobile.com/, today operating in the UK and German markets, as well as preparing the launch in the US market, where DADA operates since the beginning of 2005 though DADA Mobile Inc. with head office at New York.
At the same time the collaboration continued with Linktone (NASDAQ: LTON), the most important Chinese provider of mobile content, with the objective of launching the service “Hit of the Week” in China, by the summer, through TV promotions, a new event in the Chinese market for the products related to the personalisation of mobile telephones.
The Board of Directors also approved, together with the boards of the other two companies involved in the operation, the merger by incorporation into DADA S.p.A of the wholly owned companies Wireless Solutions S.p.A. and Clamm Srl, thereby further proceeding with the merger that commenced in the Board meeting of March 14.
Economic-financial results
At Group level, the first quarter of 2005 recorded consolidated sales of Euro 14.5 million (an increase of 48% compared to the previous year) and a positive consolidated EBITDA of Euro 3 million with a margin on consolidated sales of 20.7%. It is recalled that in the first quarter of 2004 the EBITDA of DADA was Euro 1.2 million with a margin of 12% of sales.
The operating results before goodwill amortisation in the first quarter of 2005 was a profit of Euro 2.1 million. The operating result in the first quarter of 2005 was a profit of Euro 1.4 million after amortisation and depreciation of Euro 1.6 million (in the first quarter of 2004 this aggregate was a loss of Euro 1 million).
The consolidated pre-tax result was a profit of Euro 1.9 million, compared to a loss of Euro 1.1 million in the first quarter of 2004.
Personnel costs were Euro 2.5 million, amounting to 17% of sales, an improvement compared to 21% recorded in the first quarter of 2004. In consideration of the results that we have achieved in the first quarter of 2005 and taking into account the signals to-date on the prospect for the full year, we confirm the forecasts for the full year of 2005 ” – declared Paolo Barberis, Chairman of DADA S.p.A. “In fact we forecast an increase in consolidated revenues of the DADA Group reaching Euro 55-60 million and we forecast for the entire year 2005 an EBITDA percentage on revenues of around 16-20%, a significant increase compared to the EBITDA of 12.4% recorded in 2004. Finally, also given the lower impact of amortisation, whose total amount in 2005 will be around Euro 4 million, we forecast that the DADA Group will record a positive EBIT for the full year of 2005”.
Also, the general expenses and fixed costs reduced as a percentage on sales, reducing from 8% in the first quarter of 2004 to 6% in the first quarter of 2005.
The short-term Net Financial Position at March 31, 2005 was a positive amount of Euro 23.4 million (Euro 17.5 million at the end of the first quarter of 2004 and Euro 20.1 million at December 31, 2004).
During the first three months of 2005, there was therefore an increase in absolute value of Euro 3.3 million equal to 17% of the beginning Net Financial Position (in the first quarter of 2004 this increase was equal to Euro 1 million).
It is recalled that the DADA Group has commenced the transition process to IFRS International accounting standards – International Financial Reporting Standard -, in conformity with European Regulation No. 1725 published in the official Gazette in October 2003, that renders obligatory the application of the above-mentioned accounting standards to consolidated financial statements of listed companies on European regulated market. .
From the analysis made, not yet completed, it emerges that the areas most impacted by the transition to these accounting principles relate to intangible assets, financial assets and in particular goodwill amortisation, inventory for contract work in progress and the employee leaving indemnity provision. The DADA Group expects to present the information related to the application of the IFRS as from the half-year report as of June 30, 2005.
Business results
- The Revenues of the Consumer Division account for an increasing percentage of the consolidated sales: in the first quarter of 2004 they accounted for 42% of sales compared to 27% of sales in the same period in 2003, while in the first quarter of 2005 the revenues from consumer products/services of DADA accounted for approx. 61% of sales.
The offer of the Consumer Division of DADA is characterised by a rich portfolio of fee community and entertainment product and services. This offer is available via the Internet, through the sites www.supereva.com and www.dadamobile.com, via mobile, through SMS short codes on the networks of mobile operators such as TIM, Vodafone, Wind and/or through the new micro portal new generation 3, Vodafone Live! And i-mode, and finally through landline telephones, through the voice portal realised in collaboration with Telecom Italia.
During the first quarter of 2005 there was a strong demand in the product/services of DADA available through micro browsing, or rather access to the internet via mobile: this tendency demonstrates how the increased penetration on the internet market and latest generation mobile phones, capable of offering users a rich experience and fast in terms of access to the Internet, can be translated into an expansion of the market of value added services (VAS), that currently constitutes the core of the DADA offer.
It is in this context that the agreement between DADA and SONY Music was agreed, on the basis of which the clients of the mobile telephone operator 3 were able to view the preparations of a music group in competition at the San Remo festival directly via mobile telephone, thanks to exclusive videoblog realised by DADA.
Parallel to this it is recalled that on February 14 all of the clients of Vodafone Live had the possibility to access through their mobile phone “Incontri by superEva”, the online dating service, on the www.supereva.com portal.
With reference to the superEva.com portal, a new version was launched in the quarter that contains the most important messaging and community applications in a single environment available in three distinct areas – Friends, Work and Love – with the Social Network logic.
In the first quarter of 2005, the Supereva.com community reached 1,350,000 users registered and the service was confirmed as number one in Italy in the category ‘Personals’ (Nielsen Net Ratings – March 2005).
Driven by the rapid development in Italy of the value added services of DADA, during the quarter the company undertook the localisation of its mobile offer also on the UK market, through the portal http://uk.dadamobile.com/, and on the German market, through the portals http://de.dadamobile.com and http://www.supereva.com.
It is also noted that the incorporation of DADA Mobile Inc., whose portal, http://us.dadamobile.com/, with DADA offering the American mobile users a rich library of contents and images in subscription that created the success of DADA in Italy. DADA thus intends to enter a market, that of the United States, that today can count on over 180 million users with an increase of 21.7 million compared to 2003 (source: CTIA - The Wireless Association, http://www.ctia.org).
With head office in New York and local management already selected, during the first three months of the year DADA Mobile Inc. has already activated short code numbers on the principal mobile telephone operators and signed agreements with some of the most important American content providers.
- The activities of the Business Division contributed to the consolidated sales of DADA for an amount of 28% and positions DADA as one of the most important players on the Italian market in the offer to companies of advance technical solutions and products for marketing on the Internet.
In relation to the DADA net marketing offer, it is noted the incorporation at the end of 2005 of the internal agency DADAd, “the new creative and technological factory” that exclusively manages the offer of the space on the network of DADA and that in a few weeks has obtained significant interactive advertising investments and evolved net marketing solutions from all of the big Italian spenders. It is noted in relation to this the campaigns created for Pirelli, Cornetto Algida, Microsoft, Mazda, Peugeot and TLC Telecom, Vodafone, Wind and Fastweb, that has permitted DADA to reach almost Euro 1 million in the quarter. The creation of the new agency was accompanied by an advertising campaign whose slogan of “our users grow with Bread and Internet” recalls the importance of DADA to the creation of community on the internet for over 10 years.
In relation to the technological solutions developed by DADA for business clients, the marked increase in the demand of VAS mobile solutions is noted, or rather platforms that permit companies to offer their base users content, services and applications available through mobile.
In the current quarter DADA was in fact “Enabler” of VAS mobile projects on behalf of RIN - Radio Italia Network, that assigned to DADA the development of the section dedicated to services for mobile phones and of MrTones (www.mrtones.it), the portal of Tuttogratis Italia S.p.A., completely dedicated to mobile entertainment, that sees DADA as technological partner for the management of all services related to the personalisation of mobile phones. Finally, DADA created 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.
- The Self-Provisioning division, headed by the subsidiary Register.it and that represents approximately 11% of group sales, strengthened its leadership position in the quarter in the market of automatic fee services for small and medium sized businesses and more evolved private clients, with over 200,000 active domain names, 220,000 premium email accounts and 44,000 hosted websites.
During the quarter Register.it recorded, renewed or transferred onto its server over 55,000 domains and obtained a domain renewal rate of its clientele equal to 73% (in the first quarter of 2004 this data was equal to 67%).
