Today was an important day for Telecom Italia, called not only to approve the 2016 budget accounts, but above all to elect the new board of directors of the company led by Flavio Cattaneo. The board of directors in turn will have to decide tomorrow, May 5, on the confirmation of the CEO, which seems obvious, while the appointment of the president remains in the balance. In the meantime, Piazza Affari's investors rewarded the stock with a veritable downpour of purchases, leading it to achieve one of the best performances among the blue chips, with an increase of 4,66% to 0,865 euro. However, the credit seems to be all due to the quarterly published late yesterday evening which favorably impressed analysts.
The meeting opened with the CEO clearly announcing his intentions for the future: “In a few months we have removed the minus sign from our main metrics. Now there is a great chance to raise for the whole group. We will return to structural growth also conquering market shares – continued Cattaneo – also through new services”, he added. After the great work done over the last few years, the time seems to have come to reap the benefits.
The manager has repeatedly reiterated that the group has changed its mentality, no longer proposing itself as a former state-owned company, but as a company that has just arrived on the market, aggressive and ready to win new customers.
Words also confirmed by the vice-president of Telecom and CEO of Vivendi, Arnaud de Puyfontaine: “I think Tim is stronger than ever today. Is there progress to be made? Absolutely. Not everything has been done yet. But I proudly think that the team and the group are stronger than 15 months ago."
Telecom Italia: Vivendi wins
A head-to-head won by Vivendi on the wire. The shareholders' meeting appointed the new board of directors by voting with 49,372% of those present for the names proposed by Vivendi's majority list. Therefore, all ten candidates of the French partner were elected at the first attempt. On the other hand, 49,005% of the votes went to the minority list of Assogestioni.
The new board will therefore include: the CEO of Vivendi Arnaud de Puyfontaine, the CFO of the transalpine group Hervé Philippe, the head of the legal Frédéric Crépin, the outgoing president Giuseppe Recchi, the CEO Flavio Cattaneo, the independents Felicité Herzog, Franco Bernabè, Marella Moretti, Camilla Antonini and Anna Jones, for the majority. The minority will instead be represented by Lucia Calvosa, Francesca Cornelli, Dario Frigerio, Danilo Vivarelli and Ferruccio Borsani.
The number of directors has been set at 15 (the proposal received 97,6% of the votes in favour), while their mandate will last three years. Tomorrow the first meeting of the new board will be held in which the roles within the board will be established. In recent weeks Vivendi had notified the European Antitrust that, after today's meeting, if its majority list were voted, it would obtain de facto control of the Italian telecommunications group.
Telecom Italia: the new president
Regardless of today's victory of the Vivendi list (top shareholder of Telecom Italia with 23,94%) against the funds, the European Union's response to the prior notification sent at the end of March will be awaited for the appointment as president of the French giant's CEO . However, the response from the EU seems to be destined to be postponed to the end of the month (the deadline was May 12). By virtue of what has just been said, tomorrow the board of directors will in any case assign the operating powers, while the appointment of De Puyfontaine will probably be established in the coming months. The first meeting will be chaired by the most senior director, the former president Franco Bernabè.
Subsequently, it will be necessary to decide whether to re-appoint Recchi for a few months (the latter should then hand over his powers to allow De Puyfontaine to occupy the position of president) or whether to find a different solution until the EU assessment has clarified the matter . The choice will still be up to Bolloré.
Telecom Italia: the 2016 financial statements and the quarterly
The shareholders' meeting approved the 2016 financial statements, which closed with a net profit of 1,8 billion euros. 58,75% of the share capital was present at the vote. But it is above all that attracts the attention of investors first quarter accounts of the current year, archived with consolidated revenues of 4,8 billion euros, an increase of 8,5% compared to the same period of 2016 and with a group ebitda of 2 billion euros (+16,2, 25,2%). Adjusted net financial debt stood at 1,9 billion, down by 2016 billion compared to the end of March 200. The sore point is profit, which was halved to 50 million euro. However, the figure would have increased by 2016 million compared to the same period of 115, if a tax dispute of XNUMX million and other extraordinary items had been excluded from the calculation. In the first quarter of Telecom Italia "the recovery of efficiency goes beyond expectations, as well as the results of revenues and economic performance", underlines Cattaneo, who expresses all his satisfaction, speaking of "a solid first quarter, consistent with the transformation which we announced with the new plan. In one year we returned all the main parameters to growth, both in Italy and in Brazil, accelerating on ultrabroadband, renewing the commercial strategy and managing costs with discipline".
Words that, however, do not reflect the thoughts of the workers of the group who during the meeting carried out a garrison at the entrance to the Rozzano auditorium (site of the meeting) to contest the renewal of the mandate of the CEO and in particular the bonus "for the excellent work done by cutting workers' rights and wages".
Bonus which Cattaneo has however announced that he wants to renounce, giving it to charity: "The recipients have not yet been identified, but it will be Tim's families in difficulty who will be identified".
“We have protected jobs, safeguarding the employment perimeter”, added Telecom Italia's number one – “No collective staff reduction operations are envisaged within the strategic plan. An extension of the solidarity agreements for 12 months is possible”.
As for the return to the dividend, Cattaneo reiterated that Telecom Italia will return to taking the question into consideration when the ratio between debt and EBITDA falls below the 2,7 times level that the industrial plan sets for 2018. "We will think about the coupon when the debt ebitda ratio will be below 2,7, or in 2018 the board of directors will decide".
Telecom Italia: the Vivendi node
Also at the center of attention is Vivendi, the Italian company's leading shareholder with 23,94% of the capital, after the decision by AgCom to declare the contemporary positions of the French giant in Mediaset and Telecom incompatible with current legislation. Investors and shareholders are waiting to know the future moves of the company led by Vincent Bolloré who, through his CEO (as well as Telecom vice-president) Arnaud de Puyfontane, present at the meeting, seems to want to reassure everyone: “Vivendi will continue to support the management (of Telecom Italia, ed.), bringing its expertise and resources in order to increase the operator's turnover, results and support its transformation”. “This is Tim's meeting, not Vivendi's – however the French manager pointed out – eluding all the questions of the small shareholders on the decision that the French group will take regarding its shareholdings in the two Italian companies.
Responding to the question of possible extraordinary operations, Recchi added that "Merger operations with Vivendi are not envisaged".
Furthermore, despite the existing disagreements between Mediaset and the French company, Telecom Italia's number one, Flavio Cattaneo, assured the shareholders that the group is respecting the contact signed with Mediaset. “Telecom is respecting the contract with Mediaset for Premium online. Working tables are underway to review some commercial aspects also to increase results".
Telecom Italia: the arrival of Iliad
"The group formed by Telecom Italia and Vivendi will have a critical mass to seize opportunities, but also to calmly face the challenges associated with the important changes in the telecom sector and the arrival of a new player". This is Arnaud de Puyfontaine's comment at the assembly of the telecom operator, on the future arrival in Italy of Xavier Niel's Iliad-Free, ready to land in our country in 6-9 months.
“We don't take anyone lightly”, added the CEO of Telecom Italia, Flavio Cattaneo. In reference to competition, the manager also said that the "Infratel tenders and the presence of Enel were initially considered hostile actions, but we have transformed them from threats into opportunities".
