PRESS RELEASE
BOARD OF DIRECTORS EXAMINES AND APPROVES THE ANNUAL FINANCIAL REPORT AT 31 DECEMBER 2014
TELECOM ITALIA RETURNS TO A PROFIT AFTER 3 YEARS
► consolidated net profit: 1.350 billion euros (negative for 674 million euros in 2013)
► GROUP EBIT: 4.530 BILLION EUROS (+67% compared to the 2.718 billion euros of 2013)
► PROPOSED DISTRIBUTION OF DIVIDEND FOR SAVINGS SHARES OF 2.75 EURO CENTS FOR A TOTAL AMOUNT OF APPROXIMATELY 166 MILLION EUROS
► SHAREHOLDINGS' MEETING CALLED FOR 20 MAY 2015
RECCHI: “DURING 2014 TELECOM ITALIA SUCCESSFULLY LAUNCHED THE PROCESS WHICH IS LEADING IT TO BECOME A PUBLIC COMPANY, ORIENTED TOWARDS CREATING VALUE FOR ALL STAKEHOLDERS AND PROMOTING THE DEVELOPMENT AND GROWTH OF THE COUNTRIES WHERE WE OPERATE. OUR AMBITION IS TO LEAD THE NEXT GENERATION OF PROGRESS IN OUR COUNTRY AND THE RETURN TO PROFIT IS A REASON FOR GREAT SATISFACTION FOR THE NEW BOARD”.
Patuano: “THE 2014 RESULTS SHOW THAT THE CHOICE TO INVEST IN OUR FUTURE IS PROVING TO BE A WINNING ONE.
THE POSITIVE BUSINESS TREND IN THE FIRST MONTHS OF 2015, IN LINE WITH THE GOALS WE HAD SET OURSELVES, ALSO CONFIRMS THAT TELECOM ITALIA IS MOVING IN THE RIGHT DIRECTION AND IS RETURNING TO THE ROLE IT DESERVES OF OPERATOR OF PRIMARY IMPORTANCE IN THE TELECOMMUNICATIONS SECTOR.”.
The economic and financial results of the Telecom Italia Group and Telecom Italia S.p.A. for the 2014 financial year as well as the previous year's results to which they are compared have been prepared according to the International Accounting Standards issued by the International Accounting Standards Board and homologated by the European Union (defined as "IFRS"). In the 2014 financial year, Telecom Italia applied the same accounting principles as used for the previous year, apart from the new Principles/Interpretations adopted from 1 January 2014, which had no impact on the results of the 2014 financial year.
In addition to the conventional financial performance indicators contemplated under IFRS, the Telecom Italia Group uses certain alternative performance indicators in order to give a clearer picture of the trend of operations and the company's financial position. Specifically, the alternative performance measures refer to: EBITDA; EBIT; organic change in revenues, EBITDA and EBIT; net financial debt carrying amount and adjusted net financial debt. It should be noted that, as of 2014, Telecom Italia has revised the method for determining the Organic Change in Revenues, EBITDA and EBIT, no longer considering non-organic proceeds/expenses, including non-recurrent ones, in this calculation. The organic changes therefore only include the effects of changes - if any - in the consolidation area and foreign exchange rate differences. The previous year's data for comparison has therefore been restated accordingly. The meaning and content of these measures are explained in the attachments.
Note that this release and in particular the information on the "Outlook for the 2015 financial year", contains forward-looking statements about the Group’s intentions, beliefs and current expectations with regard to its financial results and other aspects of Group's operations and strategies. Readers of the present press release should not place undue reliance on such forward-looking statements, as final results may differ significantly from those contained in the above-mentioned forecasts owing to a number of factors, the majority of which are beyond the Group’s control.
Finally, please note that the audit of the Telecom Italia consolidated and separate Financial Statements at 31 December 2014 has not yet been completed.
Rome, 19 March 2015
The Board of Directors of Telecom Italia met today, chaired by Giuseppe Recchi, to approve the Telecom Italia Group consolidated Financial Statements and the separate draft Financial Statements of Telecom Italia S.p.A. at 31 December 2014.
MAIN VARIATIONS TO THE CONSOLIDATION SCOPE
The following main changes occurred in 2014:
• Rete A (Business Unit Media): on 30 June 2014 Persidera S.p.A. (former Telecom Italia Media Broadcasting) acquired 100% of the company, and as a consequence, Rete A became part of the consolidation scope of the Group and is fully consolidated from 30 June 2014; on 1 December 2014 the merger by incorporation of Rete A into Persidera was completed;
• Trentino NGN S.r.l.(Domestic Business Unit): on 28 February 2014, the Telecom Italia Group acquired a controlling stake in the company, that therefore entered the Group's consolidation scope.
The following changes to the consolidation scope occurred during 2013:
• MTV Group(Media business Unit): on 12 September 2013 Telecom Italia Media completed the sale of 51% of MTV Italia S.r.l. and its wholly owned subsidiary MTV Pubblicità S.r.l.. As a result, these companies have been excluded from the consolidation scope;
• La7 S.r.l. (Media Business Unit): on 30 April 2013 Telecom Italia Media completed the sale of La7 S.r.l., consequently the company left the consolidation scope.
Sofora - Telecom Argentina group: on 13 November 2013 the Telecom Italia Group accepted the offer to purchase its entire controlling shareholding of the Sofora - Telecom Argentina Group. As a result the
shareholding has been classified under
Discontinued Operations, pursuant to IFRS 5 (Non-current assets held for sale
and Discontinued operations).
***
TELECOM ITALIA
GROUP RESULTS
Revenues in 2014 amounted to 21,573 million euros, down
7.8% on the 2013 financial year (23,407 million euros). In terms of organic
change, calculated by excluding the effect of changes in exchange rates (-565
million euros) and consolidation scope (-39 million euros), consolidated
revenues were down 5.4% (-1,230 million euros).
Revenues, broken
down by business unit, are as follows:
(million euros)
|
2014
|
2013
|
Changes
|
|
|
% of total
|
|
% of total
|
absolute
|
%
|
% organic
|
|
|
|
|
|
|
|
|
Domestic (*)
|
15,303
|
70.9
|
16,388
|
70.0
|
(1,085)
|
(6.6)
|
(6.6)
|
Core
Domestic
|
14,205
|
65.8
|
15,269
|
65.2
|
(1,064)
|
(7.0)
|
(7.0)
|
International
Wholesale
|
1,244
|
5.8
|
1,263
|
5.4
|
(19)
|
(1.5)
|
(1.5)
|
Olivetti
|
227
|
1.1
|
265
|
1.1
|
(38)
|
(14.3)
|
(14.7)
|
Brazil
|
6,244
|
28.9
|
6,945
|
29.7
|
(701)
|
(10.1)
|
(2.1)
|
Media and Other Assets (*)
|
71
|
0.3
|
124
|
0.5
|
(53)
|
|
|
Adjustments and eliminations
|
(45)
|
(0.1)
|
(50)
|
(0.2)
|
5
|
|
|
Consolidated Total
|
21,573
|
100.0
|
23,407
|
100.0
|
(1,834)
|
(7.8)
|
(5.4)
|
(*) As of 2014, in addition to Core
Domestic and International Wholesale, the Domestic Business Unit also includes
the Olivetti group; the comparative period has been amended accordingly.
EBITDA was
8,786 million euros, down 754 million euros (-7.9%) from the previous
financial year, with an EBITDA margin of 40.7% (40.8% in 2013). In organic
terms, the EBITDA is down 643 million euros (-6.8%) compared with the
previous financial year and the EBITDA margin is down 0.6 percentage
points (40.7% in 2014 compared with 41.3% in 2013).
The following
table shows a breakdown of EBITDA and EBITDA margin by business unit:
(million euros)
|
2014
|
2013
|
Changes
|
|
|
% of total
|
|
% of total
|
absolute
|
%
|
% organic
|
|
|
|
|
|
|
|
|
Domestic (*)
|
6,998
|
79.6
|
7,741
|
81.1
|
(743)
|
(9.6)
|
(9.6)
|
% of Revenues
|
45.7
|
|
47.2
|
|
|
(1.5) pp
|
(1.5) pp
|
Brazil
|
1,774
|
20.2
|
1,812
|
19.0
|
(38)
|
(2.1)
|
6.6
|
% of Revenues
|
28.4
|
|
26.1
|
|
|
2.3 pp
|
2.3 pp
|
Media and Other Assets (*)
|
13
|
0.2
|
(17)
|
(0.1)
|
30
|
|
|
Adjustments and eliminations
|
1
|
−
|
4
|
−
|
(3)
|
|
|
Consolidated Total
|
8,786
|
100.0
|
9,540
|
100.0
|
(754)
|
(7.9)
|
(6.8)
|
% of Revenues
|
40.7
|
|
40.8
|
|
|
(0.1) pp
|
(0.6) pp
|
(*) As of 2014, in addition to Core
Domestic and International Wholesale, the Domestic Business Unit also includes
the Olivetti group; the comparative period has been amended accordingly.
The EBIT for the 2014 financial year amounted
to 4,530 million euros; whereas in 2013 it amounted to 2,718 million
euros and reflected the impact of the impairment loss on Goodwill attributed to
the Core Domestic CGU for 2,187 million euros.
The organic change in EBIT was positive for 1,843
million euros; also excluding the mentioned impairment loss on Goodwill it
would be negative by 344 million euros.
Consolidated net
profit amounted to 1,350 million euros, negative for 674 million euros
in FY 2013 due to the mentioned impairment loss on Goodwill. Without this
impairment loss, profit for FY 2014 would be in line with that of the previous
financial year.
Capital expenditure totalled 4,984 million euros in the 2014
financial year, 584 million euros more than in 2013, broken down by operational
sector as follows:
(million euros)
|
2014
|
2013
|
Change
|
|
|
% of total
|
|
% of total
|
|
|
|
|
|
|
|
Domestic (*)
|
2,783
|
55.8
|
3,031
|
68.9
|
(248)
|
Brazil
|
2,195
|
44.0
|
1,349
|
30.7
|
846
|
Media and Other Assets (*)
|
6
|
0.2
|
20
|
0.4
|
(14)
|
Adjustments and eliminations
|
−
|
−
|
−
|
−
|
−
|
Consolidated Total
|
4,984
|
100.0
|
4,400
|
100.0
|
584
|
% of Revenues
|
23.1
|
|
18.8
|
|
4.3 pp
|
(*) As of 2014, in addition to Core Domestic and
International Wholesale, the Domestic Business Unit also includes the Olivetti
group; the comparative period has been amended accordingly.
Cash flow from operations is positive by 3,174 million euros (positive by
4,803 million euros in the 2013 financial year).
Adjusted net financial debt as of 31 December 2014 was 26,651
million euros, down by 156 million euros compared with 31 December 2013
(26,807 million euros).
In the last
quarter of 2014 the adjusted net financial debt increased by 79 million euros
compared to 30 September 2014; in particular it should be noted that the
positive cash flow from operations was offset not only by the tax disbursements
of the last quarter but also by the greater needs, amounting to 0.9 billion
euros, deriving from the payments already made for the purchasing of licenses
in Brazil and Argentina.
Net financial
debt carrying amount as of 31 December 2014 was equal to 28,021 million euros
(27,942 million euros as of 31 December 2013).
The liquidity
margin as of 31 December 2014 is 13.1 billion euros (13.6 billion
euros as of 31 December 2013), net of 0.1 billion euros relating to
Discontinued Operations and consists of 6.1 billion euros in cash (7.1 billion
euros as of 31 December 2013) and unused committed credit lines totalling 7
billion euros (6.5 billion euros as of 31 December 2013). This margin covers
the financial liabilities of the Group falling due over a period exceeding the
next 24 months.
Group headcount
as of 31 December 2014, excluding the 16,420 units related to Discontinued
Operations, was 66,025, including 52,882 in Italy (65,623 as of 31
December 2013, including 53,155 in Italy).
***
BUSINESS UNIT
RESULTS
Figures for Telecom
Italia Media as of 31 December 2014 can be found in the press release issued on
19 February 2015.
DOMESTIC
As of 2014, in addition to Core Domestic
and International Wholesale, the Domestic Business Unit also includes the
Olivetti group. This different representation reflects the commercial and
business position of the Olivetti group and the process of integrating its
products and services with those offered by Telecom Italia in the domestic
market. The data relating to the previous year was therefore restated
accordingly.
Domestic revenues, totalling 15,303 million euros (16,388
million euros in 2013), fell by 6.6% both in reported and organic terms.
EBITDA for the Domestic Business Unit amounted to 6,998
million euros in 2014, down 743 million euros on 2013 (-9.6%). EBITDA
margin was 45.7%, slightly down on 2013 (-1.5 percentage points).
2014 EBIT
was equal to 3,738 million euros (1,985 million euros in 2013); the
EBITDA margin amounted to 24.4% (12.1% in 2013). The EBIT performance reflects,
in addition to the elimination of the 2,187 million euro impairment loss on
goodwill for the Core Domestic Cash Generating Unit posted in 2013, the
contraction of EBITDA, partially offset by the reduction of 278 million euros
in depreciation and amortisation and by the capital gains, amounting to around
38 million euros, deriving from the sale by Telecom Italia S.p.A. of a property
it owned in Milan, for 75 million euros.
Excluding the aforementioned impairment
loss on goodwill from the 2013 EBIT, the change would be a reduction of 434
million euros (-10.4%).
The headcount, of 53,076
employees, fell by 301 units compared to 31 December 2013.
***
BRAZIL (average
real/euro exchange rate 3.12280)
The 2014 revenues of the TIM
Brasil group amounted to 19,498 million reais, recording a fall of
2.1% compared with the 2013 financial year (-423 million reais).
Mobile ARPU in 2014 was 17.7 reais, compared to 18.6 reais
in 2013 (-4,8%). The ARPU, like the revenues from services, was affected by a
further reduction, starting from February 2014, of the mobile termination rate.
The total number of lines as of 31
December 2014 was 75,721 thousand, up by 3.1% compared to 31 December
2013, corresponding to a market share for the lines of approximately 27%.
EBITDA for the 2014 financial year was 5,541 million
reais, 343 million reais higher than 2013 (+6,6%).
EBIT amounted to 2,483 million reais an improvement
of 23 million reais on 2013. This is explained by the higher contribution of
EBITDA, partially offset by increased depreciation and amortisation of 313
million reais (3,049 million reais in 2014 compared with 2,736 million reais in
2013).
Headcount stood at 12,841 employees (12,140 as of 31
December 2013).
***
RESULTS OF TELECOM
ITALIA S.p.A.
Revenues reached 14,153
million euros, down by 1,151 million euros (-7.5%) compared to 2013.
EBITDA was 6.739 million euros, down 798
million euros (-10.6%) compared to 2013 (7,537 million euros).
The EBIT margin
fell from the 49.2% of 2013 to 47.6% of 2014.
EBIT was 3,580 million euros, an increase of 1,702
million euros compared to the 2013 financial year (1,878 million euros). 2014
EBIT benefited from the positive effect of the reduction of
amortisation/depreciation (-280 million euros on 2013) and the capital gain of
38 million euros following the sale of a property owned in Milan. Furthermore,
it should be recalled that 2013 EBIT suffered the impairment loss on goodwill
in relation to the Core Domestic Cash Generating Unit for 2,187 million euros.
EBITDA margin was 25.3% (12.3% in 2013).
Net profit stood at 636 million euros (loss of 1,028
million euros in 2013). Excluding non-recurring items, 2014 net profit would
have been 618 million euros (positive for 1,255 million euros in 2013).
EVENTS SUBSEQUENT
TO 31 DECEMBER 2014
Agreement on the
transfer of Noverca's 170,000 thousand consumer customers to Tim
See the Press
Release on the same subject issued on 9 January 2015
8-year bond issue
for 1 billion euros
See the Press
Release on the same subject issued on 12 January 2015
Telecom Italia
S.p.A. bond buyback offers
See the Press
Release on the same subject issued on 21 January 2015
OUTLOOK FOR THE
2015 FINANCIAL YEAR
2015 will see the telecommunications market
continue to show a fall in traditional services (access and voice), partly
offset by the development of revenues from innovative services due to the
increasing demand for connectivity and digital services; it is expected that
the combined effect of these phenomena will determine a further overall fall in
the domestic market, but considerably less so than that seen in previous years,
particularly on Mobile. In Brazil growth is forecast, albeit at lower rates
than those recorded in previous years, due to the progressive penetration and
saturation of the Mobile market, the migration away from traditional voice-SMS
services towards internet services and the impact of the reduction in mobile
termination rates (MTR) .
In this context, the Telecom Italia Group –
as announced in the 2015-2017 Plan – will continue to defend its market shares,
invest in the development of infrastructures, with a heavy increase in
innovative investments. More specifically, the five areas of technological
development will regard fixed ultrabroadband with optic
fibre, mobile ultrabroadband, the development of new data centres to support
cloud services, international fibre connections and the transformation of
industrial processes aimed at ensuring a structural reduction of the operating
costs by simplifying and modernising the infrastructures.
The aim of this acceleration of investments
is to create the foundations for stabilisation and recovery of turnover based
increasingly on the spread of innovative services with digital content.
Overall investments in the Domestic area in
the plan horizon will total more than 10 billion euros, around 5 billion of
which solely for innovative developments (NGN, LTE, Cloud Computing , Data
Centres, Sparkle and Transformation), which by 2017 will enable 75% of the
population to access optic fibre, and over 95% to access 4G. In Brazil the
investments over the three year period will total over 14 billion reias
(corresponding to over 4 billion euros, at current exchange rate), with the aim
to extend 4G coverage to over 15,000 sites, and 3G coverage to over 14,000
sites by 2017.
In this context, for the current year and
in line with the trends described in the 2015 - 2017 three-year plan, a
progressive improvement is expected in operating performance on both the
domestic market (with EBITDA stabilisation target in 2016) and in Brazil.
CALL OF THE
SHAREHOLDERS MEETING
The Board of
Directors has resolved to call the Shareholders' meeting for 20 May 2015
(single call), at the auditorium in Rozzano (Milan), Viale Toscana n. 3.
Further
communications will be issued today.
***
The Manager in
charge of preparing the accounting and corporate documents, Piergiorgio Peluso,
hereby declares, pursuant to subsection 2, Art.154 bis of Italy’s Consolidated
Finance Law, that the accounting information contained herein corresponds to
the company’s documentation, accounting books and records.
Telecom
Italia
Press
Office
+39 06
3688 2610
www.telecomitalia.com/media
Telecom
Italia
Investor
Relations
+39 02
8595 4131
www.telecomitalia.com/investorrelations
|
ATTACHMENTS
TO THE PRESS RELEASE
ALTERNATIVE PERFORMANCE MEASURES
In this press release, in addition to the
conventional financial performance measures established by IFRS, certain
alternative performance measures are presented for purposes of a better
understanding of the trend of operations and the financial condition related to
the Telecom Italia Group and the Parent company Telecom Italia S.p.A.. Such
measures, which are also presented in interim financial reports, should,
however, not be considered as a substitute for those required by IFRS.
The alternative performance measures used are
described below:
•
EBITDA:
this financial measure is used by Telecom Italia as the financial target in
internal presentations (business plans) and in external presentations (to
analysts and investors). It represents a useful unit of measurement for the
evaluation of the operating performance of the Group (as a whole and at the
Business Unit level) and the Parent Telecom Italia S.p.A. in addition to EBIT. These measures are calculated as follows:
Profit (loss) before tax from continuing
operations
|
+
|
Finance
expenses
|
-
|
Finance
income
|
+/-
|
Other
expenses (income) from investments (1)
|
+/-
|
Share
of losses (profits) of associates and joint ventures accounted for using the
equity method (2)
|
EBIT - Operating profit (loss)
|
+/-
|
Impairment
losses (reversals) on non-current assets
|
+/-
|
Losses
(gains) on disposals of non-current assets
|
+
|
Depreciation
and amortization
|
EBITDA - Operating profit (loss) before
depreciation and amortization, capital gains (losses) and impairment
reversals (losses) on non-current assets
|
(1)
Expenses
(income) from investments for Telecom Italia S.p.A..
(2)
Line
item in Group consolidated financial statements only.
•
Organic change in Revenues, EBITDA and
EBIT: these measures express changes (amount and/or
percentage) in Revenues, EBITDA and EBIT, excluding, where applicable, the effects
of the change in the scope of consolidation and exchange differences. In
particular, please note that, starting from 2014, Telecom Italia has changed
the methods for determining the Organic change in Revenues, EBITDA and EBIT not
considering more, as in the past, in this calculation the non-organic
income/expenses, including those non-recurring; therefore, the Organic changes
– as described above - now include only the effects arising from the change in
the scope of consolidation and exchange differences. Figures for the
comparative periods have been restated accordingly.
Telecom Italia believes that the presentation of
such additional information allows for a more complete and effective
understanding of the operating performance of the Group (as a whole and at the
Business Unit level) and the Parent; the Organic change in Revenues, EBITDA and
EBIT is also used in presentations to analysts and investors. In this press release, is also provided the
reconciliation between the “accounting or reported” data and the “comparable”
ones.
•
Net Financial Debt: Telecom Italia believes that the Net Financial
Debt represents an accurate indicator of its ability to meet its financial
obligations. It is represented by Gross Financial Debt less Cash and Cash
Equivalents and other Financial Assets. In this press release are included two
tables showing the amounts taken from the statement of financial position and
used to calculate the Net Financial Debt of the Group and the Parent,
respectively.
In order to better represent the actual change
in net financial debt, in addition to the usual measure (renamed “Net financial
debt carrying amount”) is also shown the “Adjusted net financial debt”, which
excludes effects that are purely accounting in nature resulting from the fair
value measurement of derivatives and related financial liabilities/assets.
Net financial debt is
calculated as follows:
+
|
Non-current
financial liabilities
|
+
|
Current
financial liabilities
|
+
|
Financial
liabilities directly associated with Discontinued operations/Non-current
assets held for sale
|
A)
|
Gross Financial Debt
|
+
|
Non-current
financial assets
|
+
|
Current
financial assets
|
+
|
Financial
assets included in Discontinued operations/Non-current assets held for sale
|
B)
|
Financial Assets
|
C = (A - B)
|
Net Financial Debt carrying amount
|
D)
|
Reversal of fair value measurement of
derivatives and related financial liabilities/assets
|
E = (C+D)
|
Adjusted Net Financial Debt
|
***
The
reclassified Separate Income Statements, Statements of Comprehensive Income,
Statements of Financial Position and the Statements of Cash Flows as well as
the Net Financial Debt of the Telecom Italia Group and the Parent, herewith
presented, are the same as those included in the Report of Operations of 2014
Telecom Italia Annual Financial Report. Such statements, as well as the Net
Financial Debt, are however consistent with those included in the Telecom
Italia Consolidated and Separate Financial Statements for the year ended
December 31, 2014.
To such extent, please note that the audit
work by our independent auditors on the Telecom Italia Consolidated and
Separate Financial Statements for the year ended December 31, 2014 as well as
the check of consistency of the 2014 Report on Operations with the related
Telecom Italia Consolidated and Separate Financial Statements have not yet been
completed.
TELECOM ITALIA GROUP - SEPARATE
CONSOLIDATED INCOME STATEMENTS
(millions of euros)
|
2014
|
2013
|
Change
|
|
|
|
(a-b)
|
|
(a)
|
(b)
|
amount
|
%
|
|
|
|
|
|
Revenues
|
21,573
|
23,407
|
(1,834)
|
(7.8)
|
Other income
|
401
|
324
|
77
|
23.8
|
Total operating revenues and other
income
|
21,974
|
23,731
|
(1,757)
|
(7.4)
|
Acquisition of goods and services
|
(9,430)
|
(10,377)
|
947
|
9.1
|
Employee benefits expenses
|
(3,119)
|
(3,087)
|
(32)
|
(1.0)
|
Other operating expenses
|
(1,175)
|
(1,318)
|
143
|
10.8
|
Change in inventories
|
(52)
|
48
|
(100)
|
−
|
Internally generated assets
|
588
|
543
|
45
|
8.3
|
Operating profit before
depreciation and amortization, capital gains (losses) and impairment
reversals (losses) on non-current assets (EBITDA)
|
8,786
|
9,540
|
(754)
|
(7.9)
|
Depreciation and amortization
|
(4,284)
|
(4,553)
|
269
|
5.9
|
Gains (losses) on disposals of non-current
assets
|
29
|
(82)
|
111
|
−
|
Impairment reversals (losses) on
non-current assets
|
(1)
|
(2,187)
|
2,186
|
−
|
Operating profit (loss) (EBIT)
|
4,530
|
2,718
|
1,812
|
66.7
|
Share of profits (losses) of associates
and joint ventures accounted for using the equity method
|
(5)
|
−
|
(5)
|
−
|
Other income (expenses) from investments
|
16
|
(3)
|
19
|
−
|
Finance income
|
2,400
|
2,003
|
397
|
19.8
|
Finance expenses
|
(4,594)
|
(4,186)
|
(408)
|
(9.7)
|
Profit (loss) before tax from
continuing operations
|
2,347
|
532
|
1,815
|
−
|
Income tax expense
|
(928)
|
(1,111)
|
183
|
16.5
|
Profit (loss) from continuing
operations
|
1,419
|
(579)
|
1,998
|
−
|
Profit (loss) from Discontinued
operations/Non-current assets held for sale
|
541
|
341
|
200
|
58.7
|
Profit (loss) for the year
|
1,960
|
(238)
|
2,198
|
−
|
Attributable to:
|
|
|
|
|
Owners of the Parent
|
1,350
|
(674)
|
2,024
|
−
|
Non-controlling interests
|
610
|
436
|
174
|
39.9
|
TELECOM ITALIA GROUP - CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
In accordance with
IAS 1 (Presentation of Financial Statements) here below are presented the
Consolidated Statements of Comprehensive Income, including the Profit (loss)
for the year, as shown in the Separate Consolidated Income Statements, and all
non-owner changes in equity.
(millions of euros)
|
|
2014
|
2013
|
|
|
|
|
Profit (loss) for the year
|
(a)
|
1,960
|
(238)
|
|
|
|
|
Other components of the Consolidated
Statement of Comprehensive Income
|
|
|
|
|
|
|
|
Other components that will not be
reclassified subsequently to Separate Consolidated Income Statement
|
|
|
|
Remeasurements of employee defined benefit
plans (IAS19):
|
|
|
|
Actuarial gains (losses)
|
|
(209)
|
(29)
|
Income tax effect
|
|
53
|
7
|
|
(b)
|
(156)
|
(22)
|
Share of other comprehensive income (loss)
of associates and joint ventures accounted for using the equity method:
|
|
|
|
Profit (loss)
|
|
−
|
−
|
Income tax effect
|
|
−
|
−
|
|
(c)
|
−
|
−
|
Total other components that will not be
reclassified subsequently to Separate Consolidated Income Statement
|
(d=b+c)
|
(156)
|
(22)
|
|
|
|
|
Other components that will be reclassified
subsequently to Separate Consolidated Income Statement
|
|
|
|
Available-for-sale financial assets:
|
|
|
|
Profit (loss) from fair value adjustments
|
|
74
|
3
|
Loss (profit) transferred to Separate
Consolidated Income Statement
|
|
(23)
|
(11)
|
Income tax effect
|
|
(15)
|
4
|
|
(e)
|
36
|
(4)
|
|
|
|
|
Hedging instruments:
|
|
|
|
Profit (loss) from fair value adjustments
|
|
767
|
(563)
|
Loss (profit) transferred to Separate
Consolidated Income Statement
|
|
(871)
|
314
|
Income tax effect
|
|
28
|
71
|
|
(f)
|
(76)
|
(178)
|
|
|
|
|
Exchange differences on translating foreign
operations:
|
|
|
|
Profit (loss) on translating foreign
operations
|
|
(225)
|
(1,747)
|
Loss (profit) on translating foreign
operations transferred to Separate Consolidated Income Statement
|
|
−
|
−
|
Income tax effect
|
|
−
|
−
|
|
(g)
|
(225)
|
(1,747)
|
|
|
|
|
Share of other comprehensive income (loss)
of associates and joint ventures accounted for using the equity method:
|
|
|
|
Profit (loss)
|
|
−
|
1
|
Loss (profit) transferred to Separate
Consolidated Income Statement
|
|
−
|
−
|
Income tax effect
|
|
−
|
−
|
|
(h)
|
−
|
1
|
Total other components that will be
reclassified subsequently to Separate Consolidated Income Statement
|
(i=e+f+g+h)
|
(265)
|
(1,928)
|
|
|
|
|
Total other components of the
Consolidated Statement of Comprehensive Income
|
(k=d+i)
|
(421)
|
(1,950)
|
Total comprehensive income (loss) for
the year
|
(a+k)
|
1,539
|
(2,188)
|
Attributable to:
|
|
|
|
Owners of the Parent
|
|
1,123
|
(1,758)
|
Non-controlling
interests
|
|
416
|
(430)
|
TELECOM ITALIA GROUP - CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
(millions of euros)
|
|
12/31/2014
|
12/31/2013
|
Change
|
|
|
(a)
|
(b)
|
(a-b)
|
|
|
|
|
|
Assets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Intangible assets
|
|
|
|
|
Goodwill
|
|
29,943
|
29,932
|
11
|
Other intangible assets
|
|
6,827
|
6,280
|
547
|
|
|
36,770
|
36,212
|
558
|
Tangible assets
|
|
|
|
|
Property, plant
and equipment owned
|
|
12,544
|
12,299
|
245
|
Assets held under
finance leases
|
|
843
|
920
|
(77)
|
|
|
13,387
|
13,219
|
168
|
Other non-current assets
|
|
|
|
|
Investments in
associates and joint ventures accounted for using the equity method
|
|
36
|
65
|
(29)
|
Other investments
|
|
43
|
42
|
1
|
Non-current financial assets
|
|
2,445
|
1,256
|
1,189
|
Miscellaneous
receivables and other non-current assets
|
|
1,571
|
1,607
|
(36)
|
Deferred tax assets
|
|
1,118
|
1,039
|
79
|
|
|
5,213
|
4,009
|
1,204
|
Total Non-current assets
|
(a)
|
55,370
|
53,440
|
1,930
|
Current assets
|
|
|
|
|
Inventories
|
|
313
|
365
|
(52)
|
Trade and
miscellaneous receivables and other current assets
|
|
5,615
|
5,389
|
226
|
Current income tax receivables
|
|
101
|
123
|
(22)
|
Current financial assets
|
|
|
|
|
Securities
other than investments, financial receivables and other current financial
assets
|
|
1,611
|
1,631
|
(20)
|
Cash and cash equivalents
|
|
4,812
|
5,744
|
(932)
|
|
|
6,423
|
7,375
|
(952)
|
Current assets sub-total
|
|
12,452
|
13,252
|
(800)
|
Discontinued
operations /Non-current assets held for sale
|
|
|
|
|
of a financial nature
|
|
165
|
657
|
(492)
|
of a non-financial nature
|
|
3,564
|
2,871
|
693
|
|
|
3,729
|
3,528
|
201
|
Total Current assets
|
(b)
|
16,181
|
16,780
|
(599)
|
Total Assets
|
(a+b)
|
71,551
|
70,220
|
1,331
|
(millions of euros)
|
|
12/31/2014
|
12/31/2013
|
Change
|
|
|
(a)
|
(b)
|
(a-b)
|
|
|
|
|
|
Equity and Liabilities
|
|
|
|
|
Equity
|
|
|
|
|
Equity
attributable to owners of the Parent
|
|
18,145
|
17,061
|
1,084
|
Non-controlling interests
|
|
3,554
|
3,125
|
429
|
Total Equity
|
(c)
|
21,699
|
20,186
|
1,513
|
Non-current liabilities
|
|
|
|
|
Non-current financial liabilities
|
|
32,325
|
31,084
|
1,241
|
Employee benefits
|
|
1,056
|
889
|
167
|
Deferred tax liabilities
|
|
438
|
234
|
204
|
Provisions
|
|
720
|
699
|
21
|
Miscellaneous
payables and other non-current liabilities
|
|
697
|
779
|
(82)
|
Total Non-current liabilities
|
(d)
|
35,236
|
33,685
|
1,551
|
Current liabilities
|
|
|
|
|
Current financial liabilities
|
|
4,686
|
6,119
|
(1,433)
|
Trade and
miscellaneous payables and other current liabilities
|
|
8,376
|
8,649
|
(273)
|
Current income tax payables
|
|
36
|
20
|
16
|
Current liabilities sub-total
|
|
13,098
|
14,788
|
(1,690)
|
Liabilities directly
associated with Discontinued operations/Non-current assets held for sale
|
|
|
|
|
of a financial nature
|
|
43
|
27
|
16
|
of a non-financial nature
|
|
1,475
|
1,534
|
(59)
|
|
|
1,518
|
1,561
|
(43)
|
Total Current Liabilities
|
(e)
|
14,616
|
16,349
|
(1,733)
|
Total Liabilities
|
(f=d+e)
|
49,852
|
50,034
|
(182)
|
Total Equity and liabilities
|
(c+f)
|
71,551
|
70,220
|
1,331
|
TELECOM ITALIA GROUP - CONSOLIDATED
STATEMENTS OF CASH FLOWS
(millions of euros)
|
|
2014
|
2013
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
Profit (loss) from continuing operations
|
|
1,419
|
(579)
|
Adjustments for:
|
|
|
|
Depreciation and amortization
|
|
4,284
|
4,553
|
Impairment
losses (reversals) on non-current assets (including investments)
|
|
13
|
2,197
|
Net change in
deferred tax assets and liabilities
|
|
187
|
347
|
Losses (gains)
realized on disposals of non-current assets (including investments)
|
|
(29)
|
82
|
Share of losses
(profits) of associates and joint ventures accounted for using the equity
method
|
|
5
|
−
|
Change in
provisions for employee benefits
|
|
(59)
|
(49)
|
Change in inventories
|
|
55
|
(23)
|
Change in trade
receivables and net amounts due from customers on construction contracts
|
|
(125)
|
1,074
|
Change in trade payables
|
|
(325)
|
(489)
|
Net change in
current income tax receivables/payables
|
|
355
|
(104)
|
Net change in
miscellaneous receivables/payables and other assets/liabilities
|
|
(583)
|
(268)
|
Cash flows from
(used in) operating activities
|
(a)
|
5,197
|
6,741
|
Cash flows from investing activities:
|
|
|
|
Purchase of
intangible assets on an accrual basis
|
|
(2,422)
|
(1,895)
|
Purchase of
tangible assets on an accrual basis
|
|
(2,562)
|
(2,505)
|
Total purchase
of intangible and tangible assets on an accrual basis
|
|
(4,984)
|
(4,400)
|
Change in
amounts due to fixed asset suppliers
|
|
325
|
9
|
Total purchase
of intangible and tangible assets on a cash basis
|
|
(4,659)
|
(4,391)
|
Acquisition of
control of companies or other businesses, net of cash acquired
|
|
(9)
|
(8)
|
Acquisitions/disposals
of other investments
|
|
(2)
|
−
|
Change in
financial receivables and other financial assets
|
|
(1,118)
|
604
|
Proceeds from
sale that result in a loss of control of subsidiaries or other businesses,
net of cash disposed of
|
|
−
|
(104)
|
Proceeds from
sale/repayments of intangible, tangible and other non-current assets
|
|
78
|
88
|
Cash flows from
(used in) investing activities
|
(b)
|
(5,710)
|
(3,811)
|
Cash flows from financing activities:
|
|
|
|
Change in
current financial liabilities and other
|
|
1,305
|
(1,785)
|
Proceeds from
non-current financial liabilities (including current portion)
|
|
4,377
|
4,153
|
Repayments of
non-current financial liabilities (including current portion)
|
|
(5,877)
|
(5,551)
|
Share capital
proceeds/reimbursements (including subsidiaries)
|
|
14
|
9
|
Dividends paid
|
|
(252)
|
(537)
|
Changes in
ownership interests in consolidated subsidiaries
|
|
160
|
79
|
Cash flows from
(used in) financing activities
|
(c)
|
(273)
|
(3,632)
|
Cash flows from
(used in) discontinued operations/non-current assets held for sale
|
(d)
|
(499)
|
127
|
Aggregate cash flows
|
(e=a+b+c+d)
|
(1,285)
|
(575)
|
Net cash and cash
equivalents at beginning of the year
|
(f)
|
6,296
|
7,397
|
Net foreign exchange differences on net
cash and cash equivalents
|
(g)
|
(101)
|
(526)
|
Net cash and cash
equivalents at end of the year
|
(h=e+f+g)
|
4,910
|
6,296
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Cash Flow information
|
|
|
|
|
(millions of euros)
|
|
2014
|
2013
|
|
|
|
|
Income taxes (paid) received
|
|
(427)
|
(863)
|
Interest expense paid
|
|
(4,985)
|
(4,456)
|
Interest income received
|
|
3,301
|
2,729
|
Dividends received
|
|
5
|
2
|
|
|
|
|
|
|
|
|
Analysis of Net Cash and Cash Equivalents
|
|
|
|
|
(millions of euros)
|
|
2014
|
2013
|
|
|
|
|
Net cash and cash
equivalents at beginning of the year
|
|
|
|
Cash and cash equivalents - from
continuing operations
|
|
5,744
|
6,947
|
Bank overdrafts repayable on demand – from
continuing operations
|
|
(64)
|
(39)
|
Cash and cash equivalents - from
Discontinued operations/Non-current assets held for sale
|
|
616
|
489
|
Bank overdrafts repayable on demand – from
Discontinued operations/Non-current assets held for sale
|
|
−
|
−
|
|
|
6,296
|
7,397
|
Net cash and cash
equivalents at end of the year
|
|
|
|
Cash and cash equivalents - from
continuing operations
|
|
4,812
|
5,744
|
Bank overdrafts repayable on demand – from
continuing operations
|
|
(19)
|
(64)
|
Cash and cash equivalents - from
Discontinued operations/Non-current assets held for sale
|
|
117
|
616
|
Bank overdrafts repayable on demand – from
Discontinued operations/Non-current assets held for sale
|
|
−
|
−
|
|
|
4,910
|
6,296
|
TELECOM ITALIA GROUP - NET
FINANCIAL DEBT
(millions of euros)
|
12/31/2014
|
12/31/2013
|
Change
|
|
(a)
|
(b)
|
(a-b)
|
|
|
|
|
Non-current financial liabilities
|
|
|
|
Bonds
|
23,440
|
23,514
|
(74)
|
Amounts due to banks, other financial
payables and liabilities
|
7,901
|
6,470
|
1,431
|
Finance lease liabilities
|
984
|
1,100
|
(116)
|
|
32,325
|
31,084
|
1,241
|
Current financial liabilities (*)
|
|
|
|
Bonds
|
2,645
|
2,513
|
132
|
Amounts due to banks, other financial
payables and liabilities
|
1,872
|
3,413
|
(1,541)
|
Finance lease liabilities
|
169
|
193
|
(24)
|
|
4,686
|
6,119
|
(1,433)
|
Financial liabilities directly associated
with Discontinued operations/Non-current assets held for sale
|
43
|
27
|
16
|
Total Gross financial debt
|
37,054
|
37,230
|
(176)
|
Non-current financial assets
|
|
|
|
Securities other than investments
|
(6)
|
(6)
|
−
|
Financial receivables and other
non-current financial assets
|
(2,439)
|
(1,250)
|
(1,189)
|
|
(2,445)
|
(1,256)
|
(1,189)
|
Current financial assets
|
|
|
|
Securities other than investments
|
(1,300)
|
(1,348)
|
48
|
Financial receivables and other current
financial assets
|
(311)
|
(283)
|
(28)
|
Cash and cash equivalents
|
(4,812)
|
(5,744)
|
932
|
|
(6,423)
|
(7,375)
|
952
|
Financial assets relating to Discontinued
operations/Non-current assets held for sale
|
(165)
|
(657)
|
492
|
Total financial assets
|
(9,033)
|
(9,288)
|
255
|
Net financial debt
carrying amount
|
28,021
|
27,942
|
79
|
Reversal of fair
value measurement of derivatives and related financial assets/liabilities
|
(1,370)
|
(1,135)
|
(235)
|
Adjusted Net Financial Debt
|
26,651
|
26,807
|
(156)
|
Breakdown as follows:
|
|
|
|
Total adjusted gross
financial debt
|
34,421
|
35,280
|
(859)
|
Total adjusted financial assets
|
(7,770)
|
(8,473)
|
703
|
(*) of which
current portion of medium/long-term debt:
|
|
|
|
Bonds
|
2,645
|
2,513
|
132
|
Amounts due to
banks, other financial payables and liabilities
|
1,413
|
2,938
|
(1,525)
|
Finance lease liabilities
|
169
|
193
|
(24)
|
TELECOM
ITALIA GROUP - INFORMATION BY OPERATING SEGMENTS
Starting from
2014, the Domestic Business Unit includes, in addition to Core Domestic and
International Wholesale, also the Olivetti group. This different presentation
reflects the commercial and business placement of the Olivetti group and the
process of integrating the products and services offered by the Olivetti group
as complements to those offered by Telecom Italia in the domestic market.
Accordingly, the figures of the previous year have been restated on a
consistent basis.
(millions of euros)
|
2014
|
2013
|
Change
|
|
|
|
amount
|
%
|
% Organic
|
|
|
|
|
|
|
Revenues
|
15,303
|
16,388
|
(1,085)
|
(6.6)
|
(6.6)
|
EBITDA
|
6,998
|
7,741
|
(743)
|
(9.6)
|
(9.6)
|
EBITDA margin
|
45.7
|
47.2
|
|
(1.5)pp
|
(1.5)pp
|
EBIT
|
3,738
|
1,985
|
1,753
|
88.3
|
88.3
|
EBIT margin
|
24.4
|
12.1
|
|
12.3pp
|
12.3pp
|
Headcount
at year end (number)
|
53,076
|
53,377
|
(301)
|
(0.6)
|
|
(millions of euros)
|
2014
|
2013
|
Change
|
|
|
|
amount
|
%
|
|
|
|
|
|
Revenues
|
14,205
|
15,269
|
(1,064)
|
(7.0)
|
Consumer
|
7,349
|
7,970
|
(621)
|
(7.8)
|
Business
|
4,824
|
5,211
|
(387)
|
(7.4)
|
National Wholesale
|
1,793
|
1,897
|
(104)
|
(5.5)
|
Other
|
239
|
191
|
48
|
25.1
|
EBITDA
|
6,761
|
7,552
|
(791)
|
(10.5)
|
EBITDA margin
|
47.6
|
49.5
|
|
(1.9)pp
|
EBIT
|
3,593
|
1,888
|
1,705
|
90.3
|
EBIT margin
|
25.3
|
12.4
|
|
12.9pp
|
Headcount at year end (number)
|
51,849
|
51,954
|
(105)
|
(0.2)
|
(millions of
euros)
|
2014
|
2013
|
Change
|
|
|
|
amount
|
%
|
|
|
|
|
|
Revenues
|
1,244
|
1,263
|
(19)
|
(1.5)
|
of which third
parties
|
981
|
955
|
26
|
2.7
|
EBITDA
|
271
|
203
|
68
|
33.5
|
EBITDA margin
|
21.8
|
16.1
|
|
5.7pp
|
EBIT
|
172
|
102
|
70
|
68.6
|
EBIT margin
|
13.8
|
8.1
|
|
5.7pp
|
Headcount at year end (number)(1)
|
641
|
741
|
(100)
|
(13.5)
|
(1) Includes employees with temp work contracts:
4 employees at December 31,2014 (4 at December 31, 2013).
***
(millions of euros)
|
2014
|
2013
|
Change
|
|
|
|
amount
|
%
|
% Organic
|
|
|
|
|
|
|
Revenues
|
227
|
265
|
(38)
|
(14.3)
|
(14.7)
|
EBITDA
|
(29)
|
(4)
|
(25)
|
|
|
EBITDA margin
|
(12.8)
|
(1.5)
|
|
(11.3)pp
|
(11.3)pp
|
EBIT
|
(34)
|
(8)
|
(26)
|
|
|
EBIT margin
|
(15.0)
|
(3.0)
|
|
(12.0)pp
|
(12.0)pp
|
Headcount at year end (number)(1)
|
586
|
682
|
(96)
|
(14.1)
|
|
(1) Includes employees with temp work
contracts: 4 employees at December 31,2014 (zero at December 31, 2013).
***
|
(millions of euros)
|
(millions of Brazilian reais)
|
|
|
|
2014
|
2013
|
2014
|
2013
|
Change
|
|
|
|
|
|
amount
|
%
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(c-d)
|
(c-d)/d
|
|
|
|
|
|
|
|
|
|
Revenues
|
6,244
|
6,945
|
19,498
|
19,921
|
(423)
|
(2.1)
|
|
EBITDA
|
1,774
|
1,812
|
5,541
|
5,198
|
343
|
6.6
|
|
EBITDA margin
|
28.4
|
26.1
|
28.4
|
26.1
|
-
|
2.3pp
|
|
EBIT
|
795
|
858
|
2,483
|
2,460
|
23
|
0.9
|
|
EBIT margin
|
12.7
|
12.3
|
12.7
|
12.3
|
-
|
0.4pp
|
|
Headcount
at year end (number)
|
12,841
|
12,140
|
701
|
5.8
|
|
|
|
|
|
|
|
|
|
|
TELECOM ITALIA
GROUP - RECONCILIATION
BETWEEN REPORTED DATA AND ORGANIC DATA
REVENUES – reconciliation of organic data
(millions of euros)
|
2014
|
2013
|
Change
|
|
|
|
amount
|
%
|
|
|
|
|
|
HISTORICAL REVENUES
|
21,573
|
23,407
|
(1,834)
|
(7.8)
|
Foreign currency financial statements
translation effect
|
|
(565)
|
565
|
|
Changes in the scope of consolidation
|
|
(39)
|
39
|
|
COMPARABLE REVENUES
|
21,573
|
22,803
|
(1,230)
|
(5.4)
|
EBITDA – reconciliation of organic data
(millions of euros)
|
2014
|
2013
|
Change
|
|
|
|
amount
|
%
|
|
|
|
|
|
HISTORICAL EBITDA
|
8,786
|
9,540
|
(754)
|
(7.9)
|
Foreign currency financial statements
translation effect
|
|
(147)
|
147
|
|
Changes in the scope of consolidation
|
|
36
|
(36)
|
|
COMPARABLE EBITDA
|
8,786
|
9,429
|
(643)
|
(6.8)
|
EBIT – reconciliation of organic data
(millions of euros)
|
2014
|
2013
|
Change
|
|
|
|
amount
|
%
|
|
|
|
|
|
HISTORICAL EBIT
|
4,530
|
2,718
|
1,812
|
66.7
|
Foreign currency financial statements
translation effect
|
|
(70)
|
70
|
|
Changes in the scope of consolidation
|
|
39
|
(39)
|
|
COMPARABLE EBIT
|
4,530
|
2,687
|
1,843
|
68.6
|
TELECOM ITALIA GROUP – DEBT STRUCTURE, BOND ISSUES AND EXPIRING BONDS
Revolving Credit Facilities and term loans
In the table below are shown the composition and the drawdown of the committed credit lines available as of December 31, 2014:
(billions of euros) |
12/31/2014 |
12/31/2013 |
|
Committed |
Utilized |
Committed |
Utilized |
|
|
|
|
|
Revolving Credit Facility – due August 2014 |
- |
- |
8.0 |
1.5 |
Revolving Credit Facility – due May 2017 |
4.0 |
- |
- |
- |
Revolving Credit Facility – due March 2018 |
3.0 |
- |
- |
- |
Total |
7.0 |
- |
8.0 |
1.5 |
On August 1st 2014, that is the due date of the Revolving Credit Facility of 8 billion euros, the drawdown utilized portion for 1.5 billion euros had been repaid.
Starting from that date, the two RCFs for the total amount of 7 billion euros have become available. Indeed, we remind that on May 24, 2012 and on March 25, 2013 Telecom Italia S.p.A. extended respectively of 4 and 3 billion euros the Revolving Credit Facility of 8 billion euros expiring August 2014 (“RCF 2014”) through two Forward Start Facilities which would become effective at the due date of the RCF 2014.
Furthermore, Telecom Italia has a bilateral Term Loan expiring on August 3, 2016 for the amount of 100 million euros with Banca Regionale Europea, totally utilized.
On October 20, 2014 Telecom Italia signed a 5-year bilateral Term Loan with Cassa Depositi e Prestiti for the amount of 150 million euros, totally utilized.
On November 10, 2014 Telecom Italia signed a 5-year bilateral Term Loan with Mediobanca for the amount of 200 million euros, totally utilized.
Bonds
The following tables show the evolution of the bonds during the year 2014:
(millions of original currency) |
Currency |
Amount |
Issue date |
|
|
|
|
Telecom Italia S.p.A. 1,000 million euros 4.500% due 1/25/2021 |
Euro |
1,000 |
1/23/2014 |
Telecom Italia S.p.A. 1,500 million USD 5.303% due 5/30/2024 |
USD |
1,500 |
5/30/2014 |
(millions of original currency) |
Currency |
Amount |
Repayment date |
|
|
|
|
Telecom Italia S.p.A. 284 million euros 7.875% (1) |
Euro |
284 |
1/22/2014 |
Telecom Italia S.p.A. 750 million euros 7.750% (2) |
Euro |
750 |
3/3/2014 |
Telecom Italia S.p.A. 501 million euros 4.750% (3) |
Euro |
501 |
5/19/2014 |
Telecom Italia Capital S.A. 779 million USD 6.175% (4) |
USD |
779 |
6/18/2014 |
Telecom Italia Capital S.A. 528 million USD 4.950% (5) |
USD |
528 |
9/30/2014 |
|
|
|
|
|
(1) Net of 216 million euros repurchased by the company during 2012.
(2) Telecom Italia decided to exercise the right to redeem in advance the bonds according to a change of methodology of the rating agency that entails a reduction of the equity content initially assigned to the instrument, according to the Condition 6.5 (Early Redemption following a Rating Methodology Event) of the bond terms.
(3) Net of 249 million euros repurchased by the company during the years 2008, 2012 and 2014.
(4) Net of 221 million USD repurchased by Telecom Italia S.p.A. during 2013.
(5) Net of 722 million USD repurchased by Telecom Italia S.p.A. during 2013.
On March 18, 2014, Telecom Italia S.p.A.
successfully closed the tender offer for the buyback of four own notes maturing
between May 2014 and March 2016, repurchasing a total nominal amount of 599
million euros.
The details of the repurchased notes are the following:
Bond Title
|
Principal amount outstanding prior to the Tender
Offer
(euros)
|
Principal amount repurchased
(euros)
|
Buyback price
|
|
|
|
|
Telecom Italia S.p.A.
750 million euros,
due May 2014,
coupon 4.75%
|
556,800,000
|
56,150,000
|
100.700%
|
Telecom Italia S.p.A.
750 million euros, due June 2015, coupon 4.625%
|
750,000,000
|
172,299,000
|
104.370%
|
Telecom Italia S.p.A.
1 billion euros, due January 2016, coupon 5.125%
|
1,000,000,000
|
228,450,000
|
106.587%
|
Telecom Italia S.p.A.
850 million euros, due March 2016, coupon 8.25%
|
850,000,000
|
142,020,000
|
112.913%
|
The Telecom Italia
S.p.A. 2002-2022 bonds, reserved for subscription by employees of the Group,
amounted 196 million euros (nominal value) as of December 31, 2014 and
decreased by 2 million euros in comparison with December 31, 2013 (198 million
euros).
The nominal amount of repayment, net of the Group’s
bonds buyback, related to the bonds expiring in the following 18 months as of
December 31, 2014 issued by Telecom Italia S.p.A., Telecom Italia Finance S.A.
and Telecom Italia Capital S.A. (fully and unconditionally guaranteed by
Telecom Italia S.p.A.) totals 3,850 million euros with the following detail:
•
578 million euros, due June 16, 2015;
•
630 million euros, due October 1, 2015;
•
120 million euros, due November 23, 2015;
•
642 million euros, due December 29, 2015;
•
772 million euros, due January 25, 2016;
•
708 million euros, due March 21, 2016;
•
400 million euros, due June 7, 2016.
The bonds issued by the Telecom Italia
Group do not contain financial covenants (e.g. ratios such as Debt/EBITDA,
EBITDA/Interest, etc.) or clauses that would force the early redemption of the
bonds in relation to events other than the insolvency of the Telecom Italia
Group. Furthermore, the repayment of the bonds and the payment of interest are
not covered by specific guarantees nor are there commitments provided relative
to the assumption of future guarantees, except for the full and unconditional
guarantees provided by Telecom Italia S.p.A. for the bonds issued by Telecom
Italia Finance S.A. and Telecom Italia Capital S.A..
Since these bonds have been placed
principally with institutional investors in major world capital markets (Euromarket
and the U.S.A.), the terms which regulate the bonds are in line with market
practice for similar transactions effected on these same markets. Consequently,
for example, there are commitments not to use the company’s assets as
collateral for loans (“negative pledges”).
With reference to
the loans received by Telecom Italia S.p.A. (“Telecom Italia”) from the
European Investment Bank (“EIB”), following the downgrade by Moody’s of Telecom
Italia to Ba1 on October 8, 2013 and the downgrade by Standard & Poor’s to
BB+ on November 14, 2013, an agreement with the Bank was signed on March 25,
2014 which resulted in the following: (i) on the loans maturing in 2018 and
2019 totaling 600 million euros, a reduction in the
cost of funding from the EIB in exchange for Telecom Italia setting up new
guarantees - granted by banks and parties approved by the EIB - applying the
related charges; (ii) on the loans guaranteed by SACE totaling 200 million
euros, no increases in costs were requested; and (iii) on the remaining loans,
totaling 1,700 million euros, an increase in costs. Furthermore, a new clause
was added to the loan of 300 million euros with the direct risk of Telecom
Italia S.p.A., maturing in 2017, stating that if Telecom Italia's rating drops
below BB+/Ba1 for at least two rating agencies and the residual life of the
loan exceeds one year, the Company must set up additional guarantees in favor
of the EIB.
The estimated
impacts resulting from the new agreement with the EIB have been quantified
overall as an increase in average annual finance expenses of approximately 7.5
million euros.
After signing the
agreement, in April 2014 the new guarantees requested were set up and a new
fully-secured loan for 100 million euros was signed. In July 2014, a new loan
for a total amount of 350 million euros was signed, of which 300 million euros
at direct risk, issued on September 30, 2014, and 50 million euros, guaranteed
by bank and issued on October 7, 2014.
As a result, as
at December 31, 2014, the nominal amount of outstanding loans amounted to 2,600
million euros, of which 600 million euros at direct risk and 2,000 million
euros secured.
EIB loans not secured by bank guarantees
for a nominal amount equal to 600 million euros only need to apply the following
covenant:
• in the event the company becomes the target of a merger, demerger or
contribution of a business segment outside the Group, or sells, disposes or
transfers assets or business segments (except in certain cases, expressly
provided for), it shall immediately inform the EIB which shall have the right
to ask for guarantees to be provided or changes to be made to the loan
contract, or, only for certain loan contracts, the EIB shall have the option to
demand the advance repayment of the loan (should the merger, demerger or
contribution of a business segment outside the Group compromise the Project
execution or cause a prejudice to EIB in its capacity as creditor).
EIB loans secured by bank or approved parties guarantees for a total
nominal amount of 2,000 million euros and in the last direct risk loan of 300
million euros, signed on July 30, 2014, need to apply the following covenants:
• “Inclusion clause”, provided on loans for a total amount of 1.15
billion euros – and in particular considered in the agreement signed on August
5, 2011 for an amount of 100 million euros, in the three agreements signed on
September 26, 2011 for a total amount of 200 million euros, in the two
agreements signed on February 7, 2013 for an amount of 400 million euros, in
the agreement signed on April 8, 2014 for an amount of 100 million euros and in
the agreements signed on July 30, 2014 for an amount of 350 million euros -
under which in the event Telecom Italia commits to uphold in other loan
contracts financial covenants which are not present or are stricter than those
granted to the EIB, then the EIB will have the right to request the providing
of guarantees or the modification of the loan contract in order to envisage an
equivalent provision in favor of the EIB. The provision in question does not
apply to subsidized loans until the remaining total amount of principal is not
above 500 million euros;
• “Network Event”, clause provided on loans for a total amount of 850
million euros – and in particular contemplated in the 300 million euro loan and
in the 100 million euro loan guaranteed by SACE, both dated February 7, 2013,
in the 100 million euro loan dated April 8, 2014 and in the agreement signed on
July 30, 2014 for an amount of 350 million euros - according to which, against
the disposal of the entire fixed network or of a substantial part of it (in any
case more than half in quantitative terms) in favor of third parties or in case
of disposal of the controlling stake of the company in which the network or a
substantial part of it has previously been transferred, Telecom Italia shall
immediately inform EIB, which shall have the option of requiring the provision
of guarantees or amendment of the loan contract or an alternative solution.
Telecom Italia S.p.A. loan contracts do
not contain financial covenants (e.g. ratios such as Debt/EBITDA,
EBITDA/Interests, etc.) which would oblige the Company to repay the outstanding
loan if the covenants are not observed.
The loan contracts contain the usual
other types of covenants, including the commitment not to use the Company’s
assets as collateral for loans (negative pledges), the commitment not to change
the business purpose or sell the assets of the Company unless specific
conditions exist (e.g. the sale takes place at fair market value). Covenants
with basically the same content are also found in the export credit loan
agreement.
Furthermore,
only for the syndicated bank credit lines mechanisms are established for
adjusting the cost of funding according to Telecom Italia's credit rating.
In a series of agreements in which
Telecom Italia is a party, communication must be provided in case of a change
in control. With regard to financing relationships:
•
Loan contracts:
in the
event of a change in control, Telecom Italia shall inform the agent – if
required - within five business days or the financing bank that shall negotiate
in good faith how to continue the relationship. None of the parties shall be
obliged to continue such negotiations beyond the term of 30 days, at the end of
which, in absence of an agreement with the bank, the bank may request the
repayment of the amount disbursed and the elimination of its commitment.
Conventionally, no change of control is held to exist in the event control,
pursuant to art. 2359 of the Italian Civil Code, is acquired (i) by
shareholders who at the date of signing the agreement held, directly or
indirectly, more than 13% of the voting rights in the shareholders’ meeting, or
(ii) by the investors (Telefónica S.A., Assicurazioni Generali S.p.A., Intesa
Sanpaolo S.p.A. and Mediobanca S.p.A.) which had signed a shareholders’
agreement on April 28, 2007 regarding the Telecom Italia shares, or (iii) by a
combination of parties belonging to the two categories;
•
Bonds:
– fixed rate guaranteed subordinated equity-linked mandatory
convertible bonds, convertible into Telecom Italia S.p.A. ordinary shares,
issued by Telecom Italia Finance S.A. (the “Issuer”) and guaranteed by Telecom
Italia S.p.A. (the “Guarantor”). The trust deed established that if there is a
change of control, the Issuer must provide immediate notification of this to
the Trustee and the bondholders, and the bondholders will have the right to
convert their bonds into ordinary shares of the Guarantor within the following
60 days. Acquisition of control is not considered to have taken place if the
control is acquired (i) by shareholders of the Guarantor who at the date of
signing the agreement held, directly or indirectly, more than 13% of the voting
rights in shareholders' meeting of the Guarantor, or (ii) by the parties of the
Telco shareholders' agreement dated February 29, 2012 and amended on September
24 and November 12, 2013, or (iii) by a combination of parties belonging to the
two categories;
– the regulations covering the bonds issued under the EMTN Programme
by both Olivetti and Telecom Italia and bonds denominated in U.S. dollars
typically provide that, in the event of mergers or transfer of all or
substantially all of the assets of the issuing company or of the
Guarantor, the incorporating or transferee company shall assume all of the
obligations of the merged or transferor company. Non-fulfillment of the
obligation, for which a solution is not found, is an event of default;
•
Contracts with the European Investment Bank
(EIB). The total nominal amount is 2.6 billion
euros:
– the contracts signed by Telecom Italia with the EIB, for an amount
of 1.45 billion euros, carry the obligation of promptly informing the EIB about
changes regarding the bylaws or the allocation of share capital among the
shareholders which can bring about a change in control. Failure to communicate
this information to the EIB shall result in the termination of the contract.
Furthermore, when a shareholder, which, at the date of signing the contract
does not hold at least 2% of the share capital, comes to hold more than 50% of
the voting rights in the ordinary shareholders’ meeting or, in any case, a
number of shares such that it represents more than 50% of the share capital
and, in the EIB’s reasonable opinion, this fact could cause it a bias or could
compromise the execution of the loan project, the EIB has the right to ask
Telecom Italia to provide guarantees or modify the contract or find an
alternative solution. Should Telecom Italia not comply with the requests of
EIB, the bank has the right to terminate the contract;
– the contracts signed by Telecom Italia with the EIB in 2011, 2013
and in 2014, for a total amount of 1,150 million euros, carry the obligation of
promptly informing the EIB about any significant changes involving its bylaws
or shareholder structure. Failure to communicate this information to the EIB
shall result in the termination of the contract. With regard to the contracts
in question, a change of control is generated if a subject or group of
subjects acting in concert acquires control of Telecom Italia, or of the entity
that, directly or indirectly, controls Telecom Italia. No change of control is
held to exist in the event control is acquired, directly or indirectly (i) by
any shareholder of Telecom Italia that at the date of the contract holds,
directly or indirectly, at least 13% of the voting rights in the ordinary shareholders’
meeting, or (ii) by the investors Telefónica S.A., Assicurazioni Generali
S.p.A., Intesa Sanpaolo S.p.A. or Mediobanca S.p.A. or their subsidiaries.
Under the assumption that there is a change in control, the EIB has the right
to ask for the early repayment of the loan;
•
Loan contracts: the outstanding loans generally
contain a general commitment by Telecom Italia, whose breach is an event of
default, not to implement mergers, demergers or transfer of business, involving entities outside the Group. Such Event of
default may entail, upon request of the Lender, the early redemption of the
drawn amounts and/or the cancellation of the undrawn commitment amounts;
•
Senior Secured Syndicated
Facility. The contract, which
was signed in October 2011 by BBVA Banco Francés and Tierra Argentea S.A. (a
wholly-owned subsidiary of the Telecom Italia Group) for a facility of
312,464,000 Argentine pesos, provided for the repayment of the loan in 2016. As
a result of a First Prepayment and Waiver Agreement Agreement dated March 6,
2013, a Second Prepayment and Waiver Agreement dated January 15, 2014, a Third
Prepayment and Waiver Agreement dated February 28, 2014 and a Final Prepayment
and Waiver Agreement dated March 31, 2014, the loan was fully repaid on March
31, 2014 and there are no guarantees or contractual covenants of any type
bearing on the Telecom Italia Group.
Furthermore, in the documentation of the
loans granted to certain companies of the Tim Brasil group, the companies must
generally respect certain financial ratios (e.g. capitalization ratios, ratios
for servicing debt and debt ratios) as well as the usual other covenants, under
pain of a request for the early repayment of the loan.
We finally underline that, as of December
31, 2014, no covenant, negative pledge clause or other clause relating to the
above-described debt position, has in any way been breached or violated.
TELECOM ITALIA GROUP - EFFECTS OF
NON-RECURRING EVENTS AND TRANSACTIONS ON EACH ITEM OF THE SEPARATE CONSOLIDATED
INCOME STATEMENTS
The effects of non-recurring events and transactions on the separate
consolidated income statements line items are set out below in accordance with
Consob communication DME/RM/9081707
dated September 16, 2009:
(millions of euros)
|
2014
|
2013
|
|
|
|
Operating revenues and other income:
|
|
|
Other income
|
88
|
6
|
Employee benefits expenses:
|
|
|
Restructuring expenses
|
(12)
|
(19)
|
Other operating expenses:
|
|
|
Sundry expenses
|
(4)
|
(86)
|
Impact on Operating
profit (loss) before depreciation and amortization, capital gains (losses)
and impairment reversals (losses) on non-current assets (EBITDA)
|
72
|
(99)
|
Gains (losses) on disposals of
non-current assets:
|
|
|
Gains on disposals of non-current assets
|
38
|
4
|
Losses on disposals of non-current assets
|
−
|
(101)
|
Impairment reversals (losses) on
non-current assets:
|
|
|
Impairment loss on Core Domestic goodwill
|
−
|
(2,187)
|
Impact on EBIT -
Operating profit (loss)
|
110
|
(2,383)
|
Other income (expenses) from investments:
|
|
|
Fair value measurement of the investment
in Trentino NGN S.r.l.
|
11
|
−
|
Finance income:
|
|
|
Other sundry financial income
|
2
|
−
|
Impact on profit
(loss) before tax from continuing operations
|
123
|
(2,383)
|
Income taxes on non-recurring items
|
(15)
|
3
|
Other Income (expenses) relating to
Discontinued operations
|
(1)
|
(22)
|
Impact on profit
(loss) for the year
|
107
|
(2,402)
|
TELECOM
ITALIA S.p.A. - SEPARATE
INCOME STATEMENTS
|
2014
|
2013
|
Change
|
(millions of euros)
|
|
|
|
|
|
|
amount
|
%
|
|
|
|
|
|
Revenues
|
14,153
|
15,304
|
(1,151)
|
(7.5)
|
Other income
|
274
|
256
|
18
|
7.0
|
Total operating revenues and other
income
|
14,427
|
15,560
|
(1,133)
|
(7.3)
|
Acquisition of goods and services
|
(5,093)
|
(5,434)
|
341
|
6.3
|
Employee benefits expenses
|
(2,277)
|
(2,251)
|
(26)
|
(1.2)
|
Other operating expenses
|
(532)
|
(624)
|
92
|
14.7
|
Change in inventories
|
(43)
|
42
|
(85)
|
|
Internally generated assets
|
257
|
244
|
13
|
5.3
|
Operating profit (loss) before
depreciation and amortization, capital gains (losses) and impairment
reversals (losses) on non-current assets (EBITDA)
|
6,739
|
7,537
|
(798)
|
(10.6)
|
Depreciation and amortization
|
(3,190)
|
(3,470)
|
280
|
8.1
|
Gains (losses) on disposals of
non-current assets
|
31
|
(2)
|
33
|
|
Impairment reversals (losses) on
non-current assets
|
−
|
(2,187)
|
2,187
|
−
|
Operating profit (loss) (EBIT)
|
3,580
|
1,878
|
1,702
|
90.6
|
Income (expenses) from investments
|
(121)
|
(73)
|
(48)
|
(65.8)
|
Finance income
|
2,435
|
2,458
|
(23)
|
(0.9)
|
Finance expenses
|
(4,595)
|
(4,445)
|
(150)
|
(3.4)
|
Profit (loss) before tax from
continuing operations
|
1,299
|
(182)
|
1,481
|
|
Income tax expense
|
(670)
|
(846)
|
176
|
20.8
|
Profit (loss) from continuing
operations
|
629
|
(1,028)
|
1,657
|
|
Profit (loss) from Discontinued
operations/Non-current assets held for sale
|
7
|
−
|
7
|
|
Profit (loss) for the year
|
636
|
(1,028)
|
1,664
|
|
TELECOM
ITALIA S.p.A. - STATEMENTS OF COMPREHENSIVE INCOME
In accordance with IAS 1 (Presentation
of Financial Statements) here below are presented the Statements of
Comprehensive Income, including the Profit (loss) for the year, as shown in the
Separate Income Statements, and all non-owner changes in equity.
(millions of euros)
|
|
2014
|
2013
|
|
|
|
|
|
|
|
|
Profit (loss) for the year
|
(a)
|
636
|
(1,028)
|
Other components of the Statement of
Comprehensive Income:
|
|
|
|
Other components that will not be
reclassified subsequently to Separate Income Statement
|
|
|
|
Remeasurements of employee defined benefit
plans (IAS19):
|
|
|
|
Actuarial gains (losses)
|
|
(186)
|
(19)
|
Income tax effect
|
|
51
|
5
|
|
|
(135)
|
(14)
|
Total other components that will not be
reclassified subsequently to Separate Income Statement
|
(b)
|
(135)
|
(14)
|
Other components that will be reclassified
subsequently to Separate Income Statement
|
|
|
|
Available-for-sale financial assets:
|
|
|
|
Profit (loss) from fair value adjustments
|
|
67
|
(26)
|
Loss (profit) transferred to the Separate
Income Statement
|
|
−
|
−
|
Income tax effect
|
|
(18)
|
8
|
|
(c)
|
49
|
(18)
|
Hedging instruments:
|
|
|
|
Profit (loss) from fair value adjustments
|
|
(489)
|
175
|
Loss (profit) transferred to the Separate
Income Statement
|
|
(234)
|
326
|
Income tax effect
|
|
199
|
(138)
|
|
(d)
|
(524)
|
363
|
Total other components that will be
reclassified subsequently to Separate Income Statement
|
(e= c+d)
|
(475)
|
345
|
Total other components of the Statement
of Comprehensive Income
|
(f= b+e)
|
(610)
|
331
|
Total comprehensive income (loss) for the
year
|
(a+f)
|
26
|
(697)
|
TELECOM
ITALIA S.p.A. – STATEMENTS OF FINANCIAL POSITION
(millions of euros)
|
|
12/31/2014
|
12/31/2013
|
Change
|
|
|
|
|
|
|
|
(a)
|
(b)
|
(a-b)
|
|
|
|
|
|
Assets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Intangible assets
|
|
|
|
|
Goodwill
|
|
28,424
|
28,424
|
−
|
Intangible
assets with a finite useful life
|
|
4,015
|
4,420
|
(405)
|
|
|
32,439
|
32,844
|
(405)
|
Tangible assets
|
|
|
|
|
Property,
plant and equipment owned
|
|
9,268
|
9,307
|
(39)
|
Assets held
under finance leases
|
|
842
|
918
|
(76)
|
|
|
10,110
|
10,225
|
(115)
|
Other non-current assets
|
|
|
|
|
Investments
|
|
9,243
|
9,329
|
(86)
|
Non-current financial assets
|
|
1,924
|
1,371
|
553
|
Miscellaneous
receivables and other non-current assets
|
|
1,012
|
1,134
|
(122)
|
Deferred tax assets
|
|
728
|
561
|
167
|
|
|
12,907
|
12,395
|
512
|
Total Non-current assets
|
(a)
|
55,456
|
55,464
|
(8)
|
Current assets
|
|
|
|
|
Inventories
|
|
111
|
154
|
(43)
|
Trade and
miscellaneous receivables and other current assets
|
|
3,492
|
3,475
|
17
|
Current income tax receivables
|
|
80
|
101
|
(21)
|
Current financial assets
|
|
|
|
|
Securities
other than investments, financial receivables and other current financial
assets
|
|
1,105
|
2,009
|
(904)
|
Cash and cash equivalents
|
|
1,305
|
1,284
|
21
|
|
|
2,410
|
3,293
|
(883)
|
Current assets sub-total
|
|
6,093
|
7,023
|
(930)
|
Discontinued
operations/Non-current assets held for sale
|
|
−
|
−
|
−
|
Total Current assets
|
(b)
|
6,093
|
7,023
|
(930)
|
Total Assets
|
(a+b)
|
61,549
|
62,487
|
(938)
|
Equity and Liabilities
|
|
|
|
|
Equity
|
|
|
|
|
Share capital issued
|
|
10,724
|
10,694
|
30
|
Less: treasury shares
|
|
(21)
|
(21)
|
−
|
Share capital
|
|
10,703
|
10,673
|
30
|
Paid-in capital
|
|
1,725
|
1,704
|
21
|
Other reserves
and retained earnings (accumulated losses), including profit (loss) for the
year
|
|
4,078
|
4,203
|
(125)
|
Total Equity
|
(c)
|
16,506
|
16,580
|
(74)
|
Non-current liabilities
|
|
|
|
|
Non-current financial
liabilities
|
|
30,010
|
29,154
|
856
|
Employee benefits
|
|
910
|
762
|
148
|
Deferred tax liabilities
|
|
2
|
2
|
−
|
Provisions
|
|
484
|
469
|
15
|
Miscellaneous
payables and other non-current liabilities
|
|
359
|
412
|
(53)
|
Total Non-current liabilities
|
(d)
|
31,765
|
30,799
|
966
|
Current liabilities
|
|
|
|
|
Current financial liabilities
|
|
7,747
|
8,882
|
(1,135)
|
Trade and
miscellaneous payables and other current liabilities
|
|
5,531
|
6,226
|
(695)
|
Current income tax payables
|
|
−
|
−
|
−
|
Current liabilities sub-total
|
|
13,278
|
15,108
|
(1,830)
|
Liabilities
directly associated with Discontinued operations/Non-current assets held for
sale
|
|
−
|
−
|
−
|
Total Current Liabilities
|
(e)
|
13,278
|
15,108
|
(1,830)
|
Total
Liabilities
|
(f=d+e)
|
45,043
|
45,907
|
(864)
|
Total Equity and liabilities
|
(c+f)
|
61,549
|
62,487
|
(938)
|
TELECOM ITALIA S.p.A. – STATEMENTS OF CASH
FLOWS
|
|
|
|
(millions of euros)
|
|
2014
|
2013
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
Profit (loss) from continuing operations
|
|
629
|
(1,028)
|
Adjustments for:
|
|
|
|
Depreciation and amortization
|
|
3,190
|
3,470
|
Impairment
losses (reversals) on non-current assets (including investments)
|
|
132
|
2,371
|
Net change in
deferred tax assets and liabilities
|
|
65
|
140
|
Losses (gains)
realized on disposals of non-current assets (including investments)
|
|
(31)
|
1
|
Change in
provisions for employee benefits
|
|
(48)
|
(33)
|
Change in inventories
|
|
43
|
(35)
|
Change in
trade receivables and net amounts due from customers on construction
contracts
|
|
(103)
|
769
|
Change in trade payables
|
|
(112)
|
(388)
|
Net change in
current income tax receivables/payables
|
|
332
|
(53)
|
Net change in
miscellaneous receivables/payables and other assets/liabilities
|
|
(396)
|
(667)
|
Cash flows from (used in) operating
activities
|
(a)
|
3,701
|
4,547
|
Cash flows from investing activities:
|
|
|
|
Purchase
of intangible assets on an accrual basis
|
|
(971)
|
(1,235)
|
Purchase
of tangible assets on an accrual basis
|
|
(1,722)
|
(1,680)
|
Total purchase
of intangible and tangible assets on an accrual basis
|
|
(2,693)
|
(2,915)
|
Change in
amounts due to fixed asset suppliers
|
|
(360)
|
(81)
|
Total purchase
of intangible and tangible assets on a cash basis
|
|
(3,053)
|
(2,996)
|
Acquisition/disposal
of control of companies or other businesses, net of cash acquired/disposed of
|
|
(1)
|
5
|
Acquisitions/disposals
of other investments
|
|
(43)
|
(174)
|
Change in
financial receivables and other financial assets
|
|
337
|
(108)
|
Proceeds from
sale/repayments of intangible, tangible and other non-current assets
|
|
86
|
18
|
Cash flows from (used in) investing
activities
|
(b)
|
(2,674)
|
(3,255)
|
Cash flows from financing activities:
|
|
|
|
Change in
current financial liabilities and other
|
|
2,295
|
(194)
|
Proceeds from
non-current financial liabilities (including current portion)
|
|
4,411
|
2,441
|
Repayments of
non-current financial liabilities (including current portion)
|
|
(7,518)
|
(3,025)
|
Share capital
proceeds/reimbursements
|
|
9
|
−
|
Dividends paid
|
|
(166)
|
(454)
|
Cash flows from (used in) financing
activities
|
(c)
|
(969)
|
(1,232)
|
Cash flows from (used in) discontinued
operations/non-current assets held for sale
|
(d)
|
7
|
−
|
Aggregate cash flows
|
(e=a+b+c+d)
|
65
|
60
|
Net cash and cash equivalents at
beginning of the year
|
(f)
|
971
|
911
|
Net cash and cash equivalents at end of
the year
|
(g=e+f)
|
1,036
|
971
|
Additional Cash Flow
Information
|
2014
|
2013
|
(millions of euros)
|
|
|
|
|
|
Income taxes (paid) received
|
(352)
|
(759)
|
Interest expense paid
|
(4,928)
|
(4,419)
|
Interest income received
|
3,230
|
2,708
|
Dividends received
|
12
|
104
|
Analysis of Net Cash
and Cash Equivalents
(millions of euros)
|
2014
|
2013
|
|
|
|
|
|
|
Net cash and cash
equivalents at beginning of the year:
|
|
|
Cash and cash equivalents
|
1,284
|
2,146
|
Bank
overdrafts repayable on demand
|
(313)
|
(1,235)
|
|
971
|
911
|
Net cash and cash
equivalents at end of the year:
|
|
|
Cash and cash equivalents
|
1,305
|
1,284
|
Bank
overdrafts repayable on demand
|
(269)
|
(313)
|
|
1,036
|
971
|
TELECOM ITALIA S.p.A. – NET FINANCIAL DEBT
(millions of euros)
|
12/31/2014
|
12/31/2013
|
Change
|
|
|
|
|
Non-current financial liabilities
|
|
|
|
Bonds
|
15,806
|
15,828
|
(22)
|
Amounts due to banks, other financial
payables and liabilities
|
13,327
|
12,325
|
1,002
|
Finance lease liabilities
|
877
|
1,001
|
(124)
|
|
30,010
|
29,154
|
856
|
Current financial liabilities (1)
|
|
|
|
Bonds
|
1,846
|
1,406
|
440
|
Amounts due to banks, other financial
payables and liabilities
|
5,736
|
7,288
|
(1,552)
|
Finance lease liabilities
|
165
|
188
|
(23)
|
|
7,747
|
8,882
|
(1,135)
|
Total Gross financial debt
|
37,757
|
38,036
|
(279)
|
Non-current financial assets
|
|
|
|
Financial receivables and other
non-current financial assets
|
(1,924)
|
(1,371)
|
(553)
|
|
(1,924)
|
(1,371)
|
(553)
|
Current financial assets
|
|
|
|
Securities other than investments
|
(802)
|
(1,462)
|
660
|
Financial receivables and other current
financial assets
|
(303)
|
(547)
|
244
|
Cash and cash equivalents
|
(1,305)
|
(1,284)
|
(21)
|
|
(2,410)
|
(3,293)
|
883
|
Total financial assets
|
(4,334)
|
(4,664)
|
330
|
Net financial debt
carrying amount
|
33,423
|
33,372
|
51
|
Reversal of fair value measurement of
derivatives and related financial assets/liabilities
|
(1,942)
|
(1,063)
|
(879)
|
Adjusted Net Financial Debt
|
31,481
|
32,309
|
(828)
|
Breakdown as follows:
|
|
|
|
Total adjusted
gross financial debt
|
34,636
|
35,934
|
(1,298)
|
Total adjusted financial
assets
|
(3,155)
|
(3,625)
|
470
|
(1) of which current portion of medium/long -term debt:
|
|
|
|
Bonds
|
1,846
|
1,406
|
440
|
Amounts due to
banks, other financial payables and liabilities
|
2,273
|
5,380
|
(3,107)
|
Finance lease liabilities
|
165
|
188
|
(23)
|
TELECOM ITALIA S.p.A. – EFFECTS OF NON-RECURRING EVENTS AND TRANSACTIONS ON EACH ITEM OF THE SEPARATE INCOME STATEMENTS
The effects of non-recurring events and transactions on the separate income statement line items are set out below in accordance with Consob communication DME/RM/9081707 dated September 16, 2009:
(millions of euros) |
2014 |
2013 |
|
|
|
Employee benefits expenses |
|
|
Expenses for mobility |
(5) |
(15) |
Other operating expenses |
− |
− |
Fines |
(1) |
(2) |
Fine for A428 proceedings |
− |
(84) |
Sundry expenses |
(3) |
− |
Impact on operating profit before depreciation and amortization, capital gains (losses) and impairment reversals (losses) on non-current assets (EBITDA) |
(9) |
(101) |
Gains (losses) on disposals of non-current assets |
|
|
Gains (losses) on non-current assets |
38 |
1 |
Impairment reversals (losses) on non-current assets |
|
|
Goodwill impairment changes |
− |
(2,187) |
Impact on EBIT - Operating profit (loss) |
29 |
(2,287) |
Impact on profit (loss) before tax from continuing operations |
29 |
(2,287) |
Income taxes on non-recurring items |
(11) |
4 |
Impact on profit (loss) for the year |
18 |
(2,283) |
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the United States Private Securities Litigation Reform Act of 1995.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. The Group's interim report as of and for the twelve months ended December 31, 2014 included in this Form 6-K contains certain forward-looking statements. Forward-looking statements are statements that are not historical facts and can be identified by the use of forward-looking terminology such as "believes," "may," "is expected to," "will," "will continue," "should," "seeks" or "anticipates" or similar expressions or the negative thereof or other comparable terminology, or by the forward- looking nature of discussions of strategy, plans or intentions.
Actual results may differ materially from those projected or implied in the forward-looking statements. Such forward-looking information is based on certain key assumptions which we believe to be reasonable but forward-looking information by its nature involves risks and uncertainties, which are outside our control, that could significantly affect expected results.
The following important factors could cause our actual results to differ materially from those projected or implied in any forward-looking statements:
1. our ability to successfully implement our strategy over the 2015-2017 period;
2. the continuing effects of the global economic crisis in the principal markets in which we operate, including, in particular, our core Italian market;
3. the impact of regulatory decisions and changes in the regulatory environment in Italy and other countries in which we operate;
4. the impact of political developments in Italy and other countries in which we operate;
5. our ability to successfully meet competition on both price and innovation capabilities of new products and services;
6. our ability to develop and introduce new technologies which are attractive in our principal markets, to manage innovation, to supply value added services and to increase the use of our fixed and mobile networks;
7. our ability to successfully implement our internet and broadband strategy;
8. our ability to successfully achieve our debt reduction and other targets;
9. the impact of fluctuations in currency exchange and interest rates and the performance of the equity markets in general;
10. the outcome of litigation, disputes and investigations in which we are involved or may become involved;
11. our ability to build up our business in adjacent markets and in international markets (particularly in Brazil), due to our specialist and technical resources;
12. our ability to achieve the expected return on the investments and capital expenditures we have made and continue to make in Brazil;
13. the amount and timing of any future impairment charges for our authorizations, goodwill or other assets;
14. our ability to manage and reduce costs;
15. any difficulties which we may encounter in our supply and procurement processes, including as a result of the insolvency or financial weaknesses of our suppliers; and
16. the costs we may incur due to unexpected events, in particular where our insurance is not sufficient to cover such costs.
The foregoing factors should not be construed as exhaustive. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or
circumstances after the date hereof, including, without limitation, changes in our business or acquisition strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 19th, 2015
TELECOM ITALIA S.p.A.
BY: /s/ Umberto Pandolfi
---------------------------------
Umberto Pandolfi
Company Manager