Doctor Cattaneo, what could be the impact of Enel's competition? “You are asking me what could happen if Fiat entered our sector. I don't know, I could only make nonsense hypotheses ”. The new CEO of Telecom Italia, Flavio Cattaneo thus reaffirms the difference with Enel "natural monopoly of energy, ready to enter the broadband. “So far we have taken note of an idea, but we don't know the project – adds Cattaneo -. It would not be appropriate to comment under these conditions." But on Metroweb, contested by Enel, the CEO is more explicit. “For us it's just a matter of price. If it is fair, according to our assessments, we will proceed with the purchase”. Otherwise? “Nothing changes for us. Today we have 48% of the fiber market, we will be able to serve 84% of the demand, or 20 million users by 2018". There are also no spaces for the conversion of savings shares put in place by the previous Board of Directors: "Today there are no conditions for the implementation of the savings share conversion plan, given the Italian rules on the right of withdrawal", the manager cut short.
Thus Cattaneo makes his debut in front of analysts as number one of the former telecommunications monopolist. A lucky debut, as confirmed by the response from Piazza Affari. The title takes flight right from the start, with a price up by more than 3 percentage points, despite the results for the quarter not being as expected, much: a net profit of 433 million (260 million if we exclude some extraordinary items). Last year in the same period it was 82 million. Revenues decreased by 12,1% to 4,44 billion euros. Ebitda fell by 15,8% to 1,712 billion, Ebit decreased by 28,2% to 704 million.
But to push Telecom is the cost cutting plan prepared in record time by Cattaneo, chosen by the shareholder Vivendi to achieve at least one billion savings compared to the management of Marco Patuano. It seemed like an impossible mission. By contrast, Cattaneo has nearly tripled the cuts plan to 1,6 billion euros by 2018. The cuts will involve 800 million euros in operating costs and 800 million euros in capital expenditure, but without affecting investments technological. There will be no personnel cuts but many operations currently outsourced will be internalized and corporate welfare will be rethought. These are just a few examples of a profound review of all costs, the subject of "fifty work sites led by as many managers".
The savings operation, for now, has overshadowed the other elements of the strategy. On the media front, in particular, it took its time, avoiding anticipating moves that could involve Mediaset Premium, after the transition to Vivendi. Nor does the guidance offer particular prospects on the revenue front in Italy, while the cure for the Brazil promises to be even more drastic and severe than for the Bel Paese.
But what counts today is the cost-cutting test, surpassed in a big way by Cattaneo, with a plan which, according to Banca Imi analysts, is "simply impressive" but credible: "this upward revision is challenging but not unrealistic, our view, given the telecommunications group's chronic inefficiencies and the manager's proven track record in restructuring." Therefore, “the caution is a must, but this commitment makes Telecom Italia a fundamental player as well as a speculative call”.
