Reports 38% year-on-year increase in revenues to €197.3M in Q4 and 58% increase in full-year revenues to €719.6M

February 8, 2005

5 Min Read

MILAN, Italy -- The Board of Directors of FASTWEB S.p.A. (Milan, Nuovo Mercato: FWB), Italy’s leading broadband telecommunications company, met today and approved the 2004 financial report. The Company, following the Instructions accompanying the Rules of the Nuovo Mercato, will not present separate documentation relative to the fourth quarter of the year.

In 2004, FASTWEB reported consolidated revenues of €719.6 million – versus €700 million initially forecast – with a 36% increase with respect to the €529.1 million of 2003 (+58% excluding HanseNet which since October 2003 is no longer consolidated by the Company). In the fourth quarter 2004, Group revenues amounted to €197.3 million, a 38% increase with respect to € 143.3 million reported for the fourth quarter 2003. There was a sharp increase also in margins. The continuous and progressive increase in consolidated EBITDA during 2004 allowed FASTWEB to close the year with an EBITDA of €218.9 million – vs €210 million initially forecast – reaching a 120% increase with respect to €99.5 million achieved in 2003 (and almost double when compared to €110.7 million calculated including HanseNet). In the fourth quarter 2004, the Company reported consolidated EBITDA of € 62.1 million, equal to 31.5% of consolidated revenues, an increase of 60% with respect to € 38.8 million reported during the fourth quarter 2003.

On December 31st 2004, FASTWEB had 496,019 customers, of which over 73,000 businesses (representing 56% of revenues) and almost 423,000 residential customers (44% of revenues). The percentage of IRUs (Indefeasible Rights of Use) on revenues in 2004 was further reduced to 6% with respect to 8.1% in 2003. Customers have increased by 50% with respect to 330,600 reported at the end of 2003. The 39,400 new customers, who subscribed in the fourth quarter 2004, confirm this trend.

In the business segment, FASTWEB has acquired such important customers as the Italian Ministry of Defense, Banca Popolare di Sondrio, Biverbanca, Banca Popolare di Bari, the new premises of the Fiera di Milano and Conad. 2004 was an important year for the acquisition of companies with multiple premises throughout Italy thanks to the high quality of FASTWEB’s VPN (virtual private network) service.

“The results obtained in 2004 testify to the continued market appreciation and the high quality of our services” said Stefano Parisi, CEO of FASTWEB, “they also show the satisfaction rate of our customers on which we have concentrated the attention of the whole Company. In particular, FASTWEB is recognized as the prime supplier of mission critical applications by its business customers”.

In 2004 FASTWEB connected the cities of Modena, Bari, Alessandria and the historical center of Venice. The extension of its network in Italy is above 12,700 Km. At December 31st 2004, FASTWEB’s potential market was of 4 million homes passed with respect to 3 million at the end of 2003.

In December 2004, FASTWEB’s residential ARPU (average revenue per user) rose to € 925 per annum, a significant increase with respect to € 894 reported in December 2003. This result is due both to an increased annual ARPU from telecom services (from € 803 in December 2003 to € 829 in December 2004) and to the increased contribution from video services (from € 341 in December 2003 to € 359 in December 2004), thanks to the higher penetration of video on the total customer base.

In the fourth quarter 2004, FASTWEB reported net consolidated income of €1 million, with respect to a net consolidated loss of € 7.8 million in the fourth quarter 2003. This result was positively impacted (€59.4 million) by the tax effect connected to the year’s losses (this effect amounted to €61 million in the fourth quarter 2003).

The consolidated net loss amounts to € 124 million, while the parent company's net loss totals € 377.8 million. These two figures differ because of the different accounting treatment of the deficit arising from the cancellation of shares following the merger of the Group's main operating company into the parent company (formerly e.Biscom). The parent company has recorded the portion of the deficit not allocated to goodwill as an extraordinary item in the income statement. That portion had no effect on the consolidated financial statements, as it had already been recorded in the income statements of prior years.

The Company’s net financial position was of € -820.2 million at the end of 2004, practically stable with respect to € - 814.4 million in September 2004, better than what was expected according to Company’s 2003 forecasts. This further demonstrates the positive trend not only from an operational point of view but also in terms of free cash flow. Fourth quarter 2004 free cash flow was negative by only €6.9 million, with respect to €-165 in the fourth quarter 2003.

In 2004 consolidated investments amounted to €435.2 million (of which €397.9 million in operational expenditure) versus €458.2 million in 2003. During 2004, the Company bought the historical 1920s AEM building in Via Caracciolo, in Milan, which will now be refurbished and enlarged in order to become the headquarters of FASTWEB. Another building in Via Valcava was purchased in which the call center is housed.

At December 31st 2004 the headcount for the Group was of 2,108 employees with an external workforce of around 3,000 people full time focusing especially on sales, customer care, network development and client connections.

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