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Buongiorno, sharp first quarter growth: revenues up 81% and EBITDA 195%. Net Income amounted to Euro 2 million.
The Company expects to exceed 2006 targets.
Revenues from Consumer Services increased 111%, accounting for 95% of total revenues.
Industrial Added Value (IAV) for the first quarter 2006 amounted to Euro 16.6 million
EBITDA Euro 4.17 million, almost triple compared to Q1 2005. Net Income for the first quarter was over Euro 2 million.
Net Financial Debt amounted to Euro 4.4 million, up over Euro 2 million compared to December 31, 2005.
Based on the first quarter results, management projects the results for the entire year
will exceed the high end of the targets previously announced (Euro 170-180 million in revenues, Euro 70-72 million in IAV, and Earnings per Share Euro 0.13-0.14).
The Board of Directors of Buongiorno Vitaminic S.p.A. (MTAX STAR, Borsa Italiana: BVIT), a multinational operating in the market of multimedia content via telephone and digital channels, approved today the figures for the first quarter 2006, drafted in accordance with the international accounting standards (IAS/IFRS).
Value of Production in the first quarter 2006 increased 79% compared to the year-before period, from Euro 28.3 million to Euro 50.6 million, confirming Buongiorno as market leader with first quarter growth visibly higher than average market growth. Core business revenues for the quarter increased by 81% compared to Q1 2005 and by 18% compared to Q4 2005 and amounted to Euro 50.4 million.
The geographic breakdown shows that the sharp increase in revenues was driven by the United States where revenues in the first quarter 2006 alone equalled the 2005 total. Growth was sustained also in the Iberian peninsula and South America, up 33%. Revenues in central Europe were also up a solid 43% year-on-year, boosted by acquisitions made in the second half of 2005; in northern Europe, while Consumer Services grew significantly, Market Services were sharply downsized, especially the CD Premium segment, in accordance with the Industrial Plan, leading to an overall 15% contraction in revenues in the region.
The breakdown by business lines shows Consumer Services making the biggest contribution to core business revenues, amounting to Euro 47.6 million in the first quarter 2006, accounting for 95% of the total, a 111% increase, compared to Euro 22.5 million in the first quarter 2005.
In the first quarter 2006, Buongiorno delivered approximately 295 million "digital objects" against payment compared to 95 million in the same period of 2005, at an average unit price of 16 eurocents to over 28 million end users (unique mobile phone numbers).
The Group continued to widen and diversify its range of products and services in the first quarter 2006. Following the marketing with O2 of the TV Soccer Addicts mobile format, developed by the Buongiorno Media Unit, Bar Sport was launched in Italy for Vodafone Live! customers.
Marketing Services revenues dropped 48% from Euro 5.3 million in Q1 2005 to approximately Euro 2.8 million in the same period of 2006. This decrease is consistent with the Group's strategic decision to focus only on several specific operations, relationship marketing in particular.
In the first quarter 2006, costs for services and use of third-party assets amounted to Euro 38.9 million compared to Euro 21.5 million in the year-before period, an 81% increase, paralleling the increase in core business sales. Marketing expenses increased as a result of the strategic decision to invest in the direct VAS distribution channel with the Blinko brand, especially in the United States, Italy, and Spain.
Industrial Added Value (IAV) in the first three months of the year amounted to Euro 16.6 million, a 71% increase compared to the corresponding period in 2005.
The ratio of personnel costs to turnover decreased from 19.5% to 15.1% despite the 40% increase in personnel costs. Personnel costs increased from Euro 5.4 million in the first quarter 2005 to Euro 7.6 million in Q1 2006, including about Euro 140 thousand in non-monetary costs in service of stock option plans.
The average number of employees increased from 466 at year-end 2005 to 615 at end-March. The increase in personnel costs and the number of employees is to a large extent attributable to acquisitions made in the second half of 2005.
Consolidated Gross Operating Margin (GOM/EBITDA) in the first quarter 2006 amounted to Euro 4.17 million, almost triple compared to Q1 2005; the ratio of GOM to revenues went from 5.1% to 8.3%.
Operating Profit for Q1 2006 amounted to Euro 3 million, increasing almost seven times compared to Q1 2005, when it amounted to Euro 418 thousand. Depreciation, amortisation and write-downs of fixed assets are the main item, amounting to approximately Euro 950 thousand, a 21% increase compared to Q1 2005, including about Euro 300 thousand in write-downs of goodwill in the equity investment in Peoplesound Ltd.. This was made necessary by the decrease in CD Premium production, which was the only significant operation at Peoplesound, in line with the strategic guidelines of the Industrial Plan.
Pre-tax Profit in Q1 2006 amounted to about Euro 2.2 million, compared to about Euro 279 thousand in the first quarter 2005. The write-down deriving to the share of loss of the Asian company Buongiorno Honk Kong Ltd. attributable to the Group (49%), amounting to Euro 482 thousand, had a significant impact on this figure. This result is in line with the projections in the business plan of the joint-venture set up with Mitsui & Co., Ltd. only a few months ago. The joint-venture, which is still in the start-up stage, markets Buongiorno products and services in Far East Asia, leveraging the marketing power and network of relationships of the Japanese conglomerate.
Taxes for the quarter totalled Euro 184 thousand. IRAP was the main tax item, as other taxes were offset by approximately Euro 198 million in losses carried forward.
Consolidated Net Income before minorities amounted to approximately Euro 2 million in the first quarter 2006, up from Euro 155 thousand in the corresponding period 2005.
At March 31, 2006, consolidated Net Financial Position was negative at Euro 4.4 million, down from Euro 6.5 million at year-end 2005, reflecting the ability to generate cash from ordinary operations.
Andrea Casalini, Chief Executive Officer of Buongiorno Vitaminic S.p.A. comments, "We are very satisfied with the results achieved in the first quarter 2006. The strategy to strongly internationalize our operations, diversify the distribution approach, focus on long-term relationships with customers, and build a team of top-level professionals continues to generate excellent results in terms of rapid growth, constant revenues, and continuous improvement in margins. Based on the excellent first quarter 2006 results, we expect to be able to exceed the ambitious targets set for 2006 and already announced to the market. At this point, we believe that we can exceed the top end of guidance that we projected, Euro 180 million in revenues, Euro 72 million in IAV, and Euro 0.14 in EpS. In September, at the customary Buongiorno industrial plan update presentation, we will also give our projections for year-end results."
The Board of Directors also approved a medium-term credit line for a total of Euro 30 million expiring in five years from the loan contract signature date, issued by three main Italian banks. The purpose of the credit line is to support the company's investment plan, guaranteeing and/or funding future acquisitions.
Pursuant to the tasks entrusted to it by the Extraordinary Shareholders' Meeting held on May 2, 2006, the Board of Directors approved the terms and conditions of the Stock Option Plan and authorized the assignment of a further 2,350,000 options to employees under the Company's incentive and employee retention policies at the exercise price of Euro 5.16 each, subject to the procedures for determining the price, as approved by the General Meeting. While the assignment of stock options is immediate, entitlement to the exercise thereof is gradual starting from next year.
The reclassified consolidated Profit and Loss Account and Cash Flow Statement and a detailed statement of Fixed Assets are attached herein.
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