Financial Press Releases

Press Release in accordance with CONSOB Regulation No. 11971/1999
                            
Approval of DADA S.p.A. and DADA Group draft accounts as of December 31, 2004
DADA FINANCIAL RESULTS FOR THE YEAR 2004 APPROVED

The Board of Directors of DADA today approved DADA S.p.A. and DADA Group 2004 draft accounts, adopted some important resolutions and called DADA shareholder’s meeting on April 28th in first call and on April 29th in second call.

  • In 2004 DADA further strengthened its leadership in community and entertainment, thanks to a wide offering of web and mobile product and services dedicated to DADA’s subscribers
  • DADA Group revenues in 2004 were equal to Euro 48.4 millions (+63% compared to 2003),
  • DADA Group EBITDA equal to Euro  6.0 million (+263% in 2003),
  • DADA Group Net Cash Position at December 31, 2004 positive for Euro 20.1 million (+24% compared to the end of 2003).
  • In 2004 DADA stock has been admitted to TechStar, the new segment of the Italian Stock Exchange for listed companies meeting the highest requirements in sustainable growth and transparency.

Fiscal year 2005 has started for DADA in the name of microbrowsing. Further positive upside could derive from the Consumer offering in other promising markets, such as UK, Germany, France and US.


Florence, March 14, 2005 – The Board of Directors of DADA S.p.A. (NM TechSTAR, Italian Stock Exchange: DA.MI) under the chairmanship of Paolo Barberis, today approved DADA S.p.A. and DADA Group draft accounts as of December 31, 2004. 

In 2004 DADA further strengthened its leadership in Italy in both community and entertainment, where subscribers can access DADA’s products and services both via web, through PC, and via mobile.

DADA’s main assets and distinguishing features in the European VAS providers market are its very strong presence in the Italian consumer market, thanks its wide and fast growing mobile and web subscribers base, together with a unique convergence between its web and wireless solutions.

In the fiscal year 2004 DADA has further strengthen its financial soundness and proficient business model, which is divided into two different areas:  Direct to Consumer (D2C), where the target is the end user and Indirect to Consumer  (D2C or “Enabling”), where DADA is a partner of client companies in their digital development.

DADA Board of Directors has also approved the purchase from Dadamobile S.p.A. (previously known as Concento S.p.A., 100% controlled by DADA) of Wireless Solutions S.p.A., (a company within DADA Group, offering mainly mobile services) for Euro 2.5 million; the purchase price has been fixed in accordance with an independent expert’s valuation. In addition, the Board of Directors has approved the merger of Wireless Solutions S.p.A. and Clamm S.r.l. (both 100% controlled by DADA).

Finally, the Board of Directors has called the DADA ordinary shareholders’ meeting on April 28th in first call and on April 29th  in second call: among the matters to be deliberated upon is the approval of the fiscal year 2004 accounts and the renewal for a further 18 months of the authorization for the acquisition and disposal of DADA shares in order to stabilize DADA stock and to facilitate the company’s investments. The authorization to purchase DADA shares will be requested for a maximum number of shares representing up to 10% of the capital for a price which shall not be less than 20% and more than 10% of the price registered the day before each single purchase. As of today DADA owns a number of shares representing 2.1% of the capital.
 
Among the other matters on the shareholders’ meeting agenda, there will also be the proposal to confirm the nominated directors, as well as the request for a five-years authorization to the Board of Directors for a capital increase for a maximum up to 470.135 new shares for a  new stock-option plan for DADA Group’s employees. The stock-option plan is aimed at increasing the employees’ loyalty and commitment and its execution will be substantially linked to DADA’s stock price.
 
Economic and financial results

In 2004 DADA Group Revenues were equal to Euro 48.4 million, up 63% compared to the previous fiscal year, while consolidated EBITDA was positive for Euro 6.0 million (compared to Euro 1.7 million in the previous year).

After amortization of Euro 9 million, DADA Consolidated Operating Result in 2004 improved by 64%, thus reducing the loss to Euro 3.2 million (Euro -9 million in 2003).
Also DADA Group Net Result improved significantly in 2004 compared to the loss in 2003 of Euro 24.9 million, at Euro –5.8 million, after Euro 1.3 million of extraordinary non recurring expenses, write-downs and provisions.

In 2004 the holding company DADA S.p.A. closed the year with a turnover equal to Euro 26 million (+91% compared to the previous year) and a positive EBITDA of Euro 1.4 million, compared to a negative amount of Euro 0.9 million in 2003.

Personnel costs in 2004 accounted for 18% of revenues, thus being halved compared to the previous year in which personnel cost represented 35% of the overall turnover. General expenses accounted for less than 5% of the 2004 revenues (17% in 2003). 

DADA Group Net Financial Position as of December 31, 2004 was positive for Euro 20.1 million (Euro 16.4 million at the end of 2003). DADA Group therefore recorded a positive Free Cash Flow generation equal to Euro 3.7 million. At the year end 2004 DADA Group Operative Cash Flow was positive for Euro 4.7 million (a 30% growth from the Net Financial Position at the beginning of the year), compared to a cash use of  Euro 1.8 million recorded in 2003.

Thanks to its financial and operational strengths, DADA Group succeeded in self-financing all its investments in tangible assets, which totaled Euro 2.9 million.
A further financial contribution for about Euro 1.5 million derived from DADA Group’s reorganization, which in particular saw the divestment of non-strategic holdings.

Thanks to those positive results, DADA stock was admitted to TechStar, the new segment of the Italian Stock Exchange which identifies the listed companies meeting the highest requirements of sustainable growth and transparency.

DADA Group’s encouraging results in 2004 particularly benefited from the focus on products and services with higher margins and most interesting growth potential, in accordance with the 2003-2005 Business Plan targets approved by the Board of Directors on May 28 , 2003.

Business results

In 2004 DADA’s Consumer unit, whose revenues are about 54% on DADA Group turnover, reported a larger than expected growth, driven by the heavy demand of DADA community and entertainment products/services by over 4.5 million web users and more than 1.9 million mobile users.
Dada’s Consumer offering includes a wide range of fee community and entertainment services and products, which are available both via the Internet – through DADA historical brand “superEva” – and via mobile – through SMS shortcodes on the networks of mobile operators such as TIM, Vodafone, Wind – and finally through DADA presence in the new generation 3 and I-mode mobile portals.
Besides the already mentioned interaction between web and wireless services, DADA main assets are its marketing strength, which allows DADA to offer its services to a very large subscribers’ base – its products quality and finally its exclusive content.
With reference with the last two issues, DADA can rely on a wide library of content and images and videos optimized for all devices and on agreements with the main European and US labels.
In particular, 2004 saw a large increase in the demand of DADA services connected with mobile phones personalization (ring tones, true tones, sound effects, logos, pictures, screensavers,…) and with mobile entertainment in general (videos, MMS, Java Games, TXT fun,…), a demand which has also been stimulated by a Euro 10 million advertising investments during 2004, mostly on TV networks.
On December 31, 2004 there were 860,000 active subscribers to DADA mobile entertainment services, while during the entire year over 35 million DADA objects were downloaded, with an average revenue per download equal to Euro 0.70 and an average monthly ARPU per service from Euro 1 (for all interactive services such as chat and voting), to Euro 3.2 (for multimedia download of ring tones, wallpaper and Java games…).
The success of DADA’s mobile entertainment format and product offering was at the basis of an agreement with China’s leading Mobile Content provider LINKTONE www.linktone.com (NASDAQ: LTON), finalized to introducing such services and formats in the Chinese market.
Also MSN (Microsoft network, world leader in delivering web services to consumer) chose DADA as technological partner to enrich its “entertainment” section within the Italian portal (http://intrattenimento.msn.it/), with an area devoted to interactive mobile services.
2004 also saw the launch of superEva.com, which is an “advanced” way to meet new people and organize your social life: among its main purposes, besides friendship and job finder, there is also dating with  the matching service “Incontri by superEva”, which exceeded 1 million registered users in 2004 – now it reports about 1.3 million users with over 489,000 unique users –, thus confirming to be the first online pay-community in Italy according to Nielsen Net Ratings last analysis, dated January 2005.

Thanks to DADA Business area, whose revenues are 33% of the Group turnover, DADA represents one the main Italian players offering advanced technological services and net marketing solutions to large and medium accounts.
In particular, 2004 saw an increase in the demand of DADA mobile VAS solutions, which allow DADA clients to offer their users’ base mobile content, services and applications.
During 2004 DADA actually developed mobile VAS projects for 20 large Italian accounts that needed to communicate with their customers in a new, more usable way.
Moreover, in 2004 about 1,500 companies chose DADA for its marketing on line solutions and some of the main Italian Group entrusted DADA the development of personalized customer relationship solutions.

During 2004 net revenues from DADA Self Provisioning business area, headed by the subsidiary Register.it S.p.A,  made up 13% of the Group turnover.
In 2004 Register.it further strengthened its leadership in Italy in the market of domains and hosting, with over 200,000 active domain names, 200,000 premium email accounts and over 40,000 hosted web sites.
Average revenue per customer increased during 2004 thanks to Register.it up-selling services, which were 25% of the revenues.
2004 also saw important commercial agreements with some of the most important Italian companies in the market of fashion, entertainment and industry for the protection of their online brands.
2005 outlook
DADA current fiscal year has started in the name of microbrowsing, with the further development of DADA presence in the main Italian micro-portals Vodafone Live, 3 and I-mode.

Additional positive potential could derive from the Consumer offering in other promising markets, such as UK, Germany, France and US, a process already in progress regarding particularly community and entertainment mobile services.

In 2005, DADA Business activities will be mostly focused on web marketing, scalable services with higher margins, rather than on the offering of technology and web design solutions.

Moreover, starting from the current year, an exclusive internal advertising agency, DADA Digital Advertising, will be selling advertising on the Group’s web portals such as superEva, Clarence and Register.it.

In light of the encouraging results of 2004 and of the indications received up to now regarding the first two months of 2005, DADA expects an increase of the consolidated revenues for the full fiscal year 2005 equal to Euro 55-60 million. Based on the same assumptions, DADA Group EBITDA in 2005 is expected to be in the range 16-20% of the Group revenues, thus a significant increase compared to DADA Group EBITDA in 2004 which was equal to 12.4% of the Group’s revenues.
In addition, with lower depreciation and amortisation costs which are expected to amount to Euro 4 million, DADA Group is likely to reach a positive EBIT in 2005. 
Finally, the Group Net Financial Position at the end of 2005 is expected to be equal to Euro 25 million.
In 2005 DADA will also continue to rationalise the Group’s structure through extraordinary corporate transactions and divestments of non-strategic holdings.

During the current year DADA will strengthen its leadership in the Italian digital community and entertainment market, and aims to become a significant player in the European mobile VAS market mainly thanks its significant financial resources and high margin, innovative products and services.

***
 DADA S.p.A. is the Italian leading provider of web and mobile entertainment services: its offering  is made up by a wide range of pay “Community & Infotainment” product and services, which can  be enjoyed both through the Group’s historical brand superEva, and via mobile, thanks to the  unique number SMS to the TELCO TIM, Vodafone, Wind and/or through the presence in the new  generation web portals “TRE” and “ iMode”.
 Listed on TechStar of the Italian Stock Exchange, DADA heads a Group of companies offering web  products and services, among which there’s also Register.it S.p.A., the Italian leader in the  management of privates and companies online presence.