e.Biscom Confirms Full-Year 2001 Revenues at 158 Mln Euro
- Closes 2001 with 83,000 Clients in Italy and Germany -
- e.Biscom Fourth Quarter Revenues Rise 75% to 64.2 Million Euro vs. Third Quarter
- FastWeb Fourth Quarter Revenues Increase Nearly 90% to 35.4 Mln Euro vs. Third Quarter
- Italian Clients Grow 9 Times to 49,000; German Clients Triple to 34,000 vs. 2000
- Strong Quarter-on-Quarter Consolidated EBITDA Improvement
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Milan, Feb. 28, 2002 - The Board of Directors of e.Biscom SpA (Milan's Nuovo Mercato: EBI), Italy's first broadband telecommunications and media services company, met today and approved the company's full-year financial report for last year. The details are highlighted below.
e.Biscom announced that consolidated revenues for the Oct.-Dec. period of last year came in at 64.2 million Euro, with e.Biscom's core telecommunications businesses accounting for the largest portion of the revenue breakdown. e.Biscom revenues rose 75% in the fourth quarter, up from 36.7 million Euro in the third quarter. On the year, fourth quarter revenues were up 94% from 33.1 million Euro. Full-year revenues increased to 157.9 million Euro, more than three times those for 2000.
"The growth we saw over the last year is true proof that our business model is working, not just locally but on a nationwide scale," said e.Biscom Chief Executive Officer Silvio Scaglia. "In this €shake-out' phase of weaker players, I am proud to say that we are standing tall with a number of assets on board, such as our strong position in Italy's main urban centers, our fully-funded status, our proven commercial success and our own technological know-how. These assets cannot be easily duplicated."
Revenues from FastWeb SpA, the group's Italian broadband telecommunications unit, rose to 35.4 million Euro in the fourth quarter -- almost equal to the sum of the previous three quarters combined -- with corporate clients continuing to account for a bulk of the revenue growth. Third quarter revenues rose 65% compared to the second quarter, and fourth quarter revenues rose nearly 90% compared to the third quarter.
FastWeb's EBITDA (Earnings before Interest, Tax, Depreciation and Amortization) loss narrowed from 11 million Euro in the third quarter to 3 million Euro in the final quarter last year. As a percentage of revenues, FastWeb's EBITDA loss narrowed from a negative 94 percent in the second quarter to a negative 59 percent in the third quarter and to a negative 8 percent in the last quarter of 2001.
Client numbers rose more than nine times at the end of 2001 to 49,000 compared to 5,300 at the end of 2000. The number of homes passed increased nearly 40% in the fourth quarter compared to the third quarter, totaling over 319,000. FastWeb currently has clients in Milan, Rome, Turin, Genoa and has just activated service in Naples and Bologna.
At the end of last year, FastWeb's network reached all of Milan's businesses and half of the city's homes and SOHOs. This puts the broadband operator right on target to be able to offer its services to the whole city by the end of this year. In terms of market penetration, FastWeb has reached an overall market share of over 10% with its fiber network.
HanseNet Telekommunikation GmbH, e.Biscom's broadband operator in the Hamburg area, reached 19.5 million Euro in revenues for the fourth quarter this year, up 44% from the third quarter.
The company's gross profit rose to 10.3 million Euro in the fourth quarter, up from 7.7 million Euro, or 34%, in the third quarter and up from 4.3 million Euro, or 140%, from the same quarter in the previous year. As a percentage of revenues, gross profit rose to 53% in the fourth quarter, up from 26% in the final quarter of 2000.
HanseNet's revenues grew to 65.1 million Euro for 2001, up nearly 50% from the end of 2000. e.Biscom assumed control of the German carrier during the final quarter of 2000.
During the fourth quarter of last year, HanseNet was able to provide a richer product offering to its business client base in Hamburg. HanseNet is currently offering Virtual Private Networks as well as housing and hosting services to its corporate clients. The company has witnessed a strong customer demand for such services.
HanseNet has become the top broadband telecommunications company in the Hamburg area after the German incumbent Deutsche Telecom AG. The total number of German clients nearly tripled in 2001, rising to 34,000 at year-end.
The overall success of HanseNet over last year, both in terms of operative as well as financial results, is largely due to a strategy shift brought about by the e.Biscom management team and the unique technology that e.Biscom was able to bring from Milan to Hamburg.
The overall e.Biscom network has grown as the roll-out continues. The total network in Italy and Germany has grown to 6,600 Km (including XXX Km of the Socrate network) of which about 4,200 Km are local access in the main cities.
Metroweb SpA, Italy's only metropolitan provider of dark fiber, boasted a strong performance during 2001. The company reported a net profit of XXX million Euro for the year, ahead of schedule. Metroweb, which is run by e.Biscom management, reported full-year revenues of XXX million Euro in 2001.
The Video-on-Demand service on a payment basis was successfully launched by the e.BisMedia group, e.Biscom's content producer and packager, demonstrating V-o-D's current commercial value and future potential. The latest data show that over 15% of the subscribers to e.BisMedia's Video-on-Demand service spend at least one hour a day watching it. Further, the average gross ARPU (Average Revenue per User) increased to a monthly 5 Euro in just three months of commercial operations.
Just recently, the first interactive television advertisement ever in Italian history was presented on RaiClick, e.BisMedia's joint-venture with Italian state broadcaster RAI. The advertisement, created for Honda Automobile Italy, is a concrete example of the benefits of full broadband interactivity in a commercial context, where the viewer is able to choose which aspects of the Honda automobile he would like to learn more about.
e.BisMedia reported total revenues of 16.2 million Euro at the end of 2001, up more than five times, from 2.9 million Euro at the end of 2000.
B2Biscom, e.Biscom's B2B unit, posted 7.2 million Euro in revenues at the end of last year, up from 5.3 million Euro at the end of the previous year. The company was able to increase its revenues with limited investment over the course of 2001.
e.Biscom's consolidated EBITDA loss for the fourth quarter shrunk to a negative 20.6 million Euro from a negative 29.7 million Euro in the previous quarter. As a percentage of revenues, EBITDA improved from a negative 81% in the third quarter to a negative 32% in the final three-month period of last year.
The improvement in the EBITDA loss is a clear sign that e.Biscom and its operating companies are on the road to profitability.
The net consolidated income amounted to 9.7 million Euro in the fourth quarter of last year thanks to the fact that the company was able to take advantage of a tax credit in the fourth quarter for the full-year 2001.
e.Biscom SpA posted a net loss of 4.4 million Euro in the fourth quarter 2001.
Consolidated capital expenditure amounted to XXX million Euro for the fourth quarter of last year.
e.Biscom posted funding resources valuing XXX billion Euro at year-end. These are composed of cash and pledge accounts of over 900 million Euro and credit lines of XXXX million Euro, of which XXX million Euro have already been drawn.
The headcount for the group was over 1,600 employees at the end of the year, growing nearly 90 percent from the end of 2000.
A Closer Look at the Three Operational Arms of e.Biscom:
I. Telecommunications
FastWeb
FastWeb SpA, e.Biscom's Italian broadband telecommunication unit, posted fourth quarter revenues of 35.4 million Euro, up almost 90% compared to the third three months of last year --marking the best quarter ever for the Milan-based company. FastWeb, on the whole, contributed to nearly half of e.Biscom's total consolidated revenues in the final three months of last year.
EBITDA loss improved from 11.0 million Euro in the third quarter to 3.0 million Euro in the final quarter of last year. The EBITDA margin rose from a negative 59% at the end of the third quarter to a negative 8% in the fourth quarter.
Business and residential subscribers to FastWeb's broadband services rose to 49,000 at year-end. During the fourth quarter, FastWeb reported more client acquisitions than the sum of all of clients acquired in the prior nine months of the year. The rate at which clients signed up for FastWeb's service also rose nearly ten-fold during 2001. Today, FastWeb is signing up an average of 400 subscribers per day. This trend is expected to continue.
FastWeb currently has nearly half of its subscribers connected. The sharp increase in the number of new subscribers in the fourth quarter last year has led to a delay in the connection process. However, FastWeb has reacted quickly. January, alone, has seen a XXX% increase in the number of completed connections, which totaled in XXXX, compared to the XXXX connections completed in December. February witnessed a total of XXXX completed connections, up XXX% from December.
Business clients at the end of last year totaled over 8,600. Of these, 357 were medium-and large-sized companies, 8,225 were small companies and SOHOs and 32 were carriers. The remaining 40,300 subscribers were residential clients.
ARPUs for corporate customers continue to be strong thanks to the high take-rates of FastWeb's technologically-innovative services (ie, IP Virtual Private Networks, Bandwidth-on-Demand, Broadband Audio and Video Streaming). FastWeb proudly boasts 100 VPN clients, making it among the largest provider of VPN's over Internet Protocol in Europe. The Italian Ministry of Communication in Rome is one of FastWeb's VPN clients.
In terms of market penetration, some of the areas which first received access to FastWeb's service over a year ago are showing a penetration rate of over 20%, while the average market share -- including areas where service was recently made available -- is over 10%. The FastWeb network has reached nearly 36,000 buildings, corresponding to over 319,000 households as of Dec. 31.
All residents and businesses in Milan will be able to enjoy FastWeb's broadband services by the end of this year. Milan has the largest and most capillary fiber network infrastructure of any city in the world.
About 30 percent of FastWeb clients are currently outside of the Milan area, demonstrating that FastWeb has become a truly national telecom operator. The network infrastructure in the other cities served by FastWeb is expected to become equally as dense.
Since the beginning of the year, FastWeb has opened a call center in Naples to guarantee top-level customer care for its clients. The call center, which became operative only a few weeks ago, currently employs 75 people and is expected to grow to 175 by the end of the year. Total headcount for FastWeb was 845 individuals at the end of December.
HanseNet
HanseNet Telekomunikation GmbH, e.Biscom's broadband operator in the Hamburg area, posted fourth quarter revenues amounting to 19.5 million Euro compared to 13.5 million Euro in the third quarter. This, too, was the best quarter ever for HanseNet in terms of revenue.
The company's gross profit rose to 10.3 million Euro in the fourth quarter, up from 7.7 million Euro, or 34%, in the third quarter and up from 4.3 million Euro, or 140%, from the same quarter in the previous year. As a percentage of revenues, gross profit rose to 53% in the fourth quarter, up from 26% in the final quarter of 2000.
Margins improved thanks to the dramatic increase in the number of HanseNet's direct clients who can enjoy the new technology brought to the Hamburg region by e.Biscom.
The company also witnessed improvement in the EBITDA loss of 2.3 million Euro in the fourth quarter of 2001, up from 5.4 at the end of the third quarter. As a percentage of revenues, EBITDA improved to a negative 12% in the final quarter of 2001, up from a negative 40% in the third quarter.
During the final quarter of last year, HanseNet was able to provide a richer product offering to its business client base in Hamburg. HanseNet is currently offering Virtual Private Networks as well as housing and hosting services to its corporate clients. The company has experienced a strong demand for such innovative services, like its Italian counter-part FastWeb.
For the fourth quarter, business services accounted for 86% of revenues while residential services accounted for 14% of revenues.
HanseNet clients nearly tripled at year-end amounting to 34,000 compared to 11,800 at the end of the previous year. The breakdown of HanseNet's client base is: 6,725 business customers, 27,275 residential customers and XX carriers.
HanseNet revenues for the entire year stood at 65.1 million Euro, an increase of nearly 50% compared to 2000. Last year was the first full year in which e.Biscom had control of the German telecom operator.
HanseNet's headcount at the end of 2001 was over 385.
Metroweb
Metroweb SpA, Italy's only metropolitan provider of dark fiber, boasted a strong performance during 2001. The company reported a net profit of XXX million Euro for the year.
Revenues stood at XXX million Euro for the year 2001. Metroweb's revenue mix was composed of XX% from building connections, XXX% from shared digging costs recognized by other operators and XXX% from XXXXX. The dark-fiber rental business generated XXX million Euro in 2001, of which XXX million Euro were related to FastWeb.
Its pipeline infrastructure grew to over 1,XXX Km as of Dec. 31. Metroweb total investments amounted to XX million Euro at the end of 2001.
Metroweb is controlled by Milan's multi-utility AEM SpA. e.Biscom has a 33-percent stake in and management control of the company.
e.Biscom does not consolidate Metroweb's results.
II. Media & B2C
Revenues from the e.BisMedia group, e.Biscom's content subsidiary; e.BisNews, e.Biscom's editorial unit and e.Voci, its high-tech retail chain, rose to 16.2 million Euro in 2001, up over 5 times from 2.9 million Euro at the end of 2000. These revenues accounted for 10% of total consolidated revenues for the year.
The group has had success with the launch of its Video-on-Demand service. The latest data show that over 15% of the subscribers to e.BisMedia's Video-on-Demand service spend at least one hour a day watching it. Further, the average gross ARPU increased to a monthly 5 Euro in just three months of commercial operations.
e.BisMedia clients can choose from a variety of content, including Italian and U.S. premier films, children's entertainment, documentaries as well as Italian state broadcaster RAI's current and historic programming. There are currently over 1,500 film titles available between the offerings of e.BisMedia and RaiClick, e.BisMedia's joint-venture with RAI.
Just recently, the first interactive television advertisement ever in Italian history was broadcast on RaiClick. The advertisement, created for Honda Automobile Italy, is a concrete example of the benefits of full broadband interactivity in a commercial context, where the viewer is able to choose which aspects of the Honda's automobiles he would like to learn more about.
The e.Biscom group is the only company in Italy that has the capacity to bring full interactivity between a vendor and a potential client to the home.
Since the beginning of the year, e.BisMedia has purchased a near 25-percent stake in Rome publishing house Editing for 3.7 million Euro. Editing produces traditional printed editorial content for larger publishing houses. The recently-purchased stake reinforces the commercial synergies between the two companies in the editorial field.
On the B2C side, e.Voci, e.Biscom's chain of high-tech stores throughout Italy, had 12 retail points as of Dec. 31. The chain posted total sales of 11.6 million Euro for 2001, up from 2.5 million Euro in 2000. At the end of 2001, e.Voci entered a new-line of business, selling high-tech goods at the wholesale level. This helped contribute to the retail chain's revenue increase.
Total headcount for e.BisMedia, e.BisNews and e.Voci was nearly 225 at the end of December.
III. B2B
B2Biscom, the business-to-business unit of e.Biscom, posted 7.2 million Euro in revenues at the end of last year, up from 5.3 million Euro at the end of the previous year. The company was able to increase its revenues with limited investments over the course of 2001.
Just a few weeks ago, B2Biscom sealed an agreement with CREDEMTEL, the unit of Milan-listed CREDEM banking group that provides networked business services, for use of the "Payanyway" on-line payment system.
As a result of the agreement, the "Payanyway" on-line payment system is now available at special rates on eBixtrade.it, the B2Biscom marketplace.
The CREDEMTEL system allows businesses to handle collection and payment activities via the web, in a multi-bank environment giving access to the 680 banks currently linked to Italy's C.B.I. interbank system.
The number of people working for B2Biscom was over 100 as of Dec. 31.
See the Operating Companies Breakdown in the Fourth Quarter (in Euro Mln) in the .pdf document