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Buongiorno Vitaminic SpA
Half-Year Report as of June 30, 2004
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 1
Contents
Company Boards
Economic and Financial Highlights of the Buongiorno Vitaminic Group
Stock Performance and Capitalization
1 Report on Operations
1.1 The Group at June 30, 2004, and Related Developments
1.2 Business Model of Buongiorno Vitaminic
1.3 Trend of the Markets
1.4 The Evolution of Buongiorno Vitaminic Business
1.5 Operations of the Buongiorno Vitaminic Group
1.5.1 Economic operations
1.5.2 Financing and investment operations
1.5.3 Financial operations
1.6 Foreseeable Evolution
1.7 Performance of the Parent Company (Buongiorno Vitaminic S.p.A.)
1.7.1 Economic Operations of the Parent Company
1.7.2 Financing and Investment Operations of the Parent Company
1.8 Human Resources
1.9 Technological Innovation
1.10 Main Corporate Events in the Half-Year
1.11 Events Following June 30, 2004
1.12 Main Shareholders
1.13 Report on the Stock Option Plan
1.14 Treasury Stocks
2 Financial Statements for the Period Ended June 30, 2004
2.1 Consolidated Financial Statements for the Period Ended June 30, 2004 –
Buongiorno Vitaminic Group
2.2 Consolidated Financial Statements for the Period Ended June 30, 2004 –
Buongiorno Vitaminic S.p.A.
3 Company Data and Information for Shareholders
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 2
Company Boards
Board of Directors
Chairman
Mauro Del Rio
Sant'Ilario d'Enza (RE), 02/20/1964
Managing Director
Andrea Casalini
Parma, 05/02/1962
Deputy Chairman
Gianluca Dettori
Turin, 03/26/1967
Director
Giorgio Luca Bruno
Milan, 02/23/1960
Deputy Chairman
Jorge Mata Jimenez
Madrid, (Spain) 04/03/1963
Director
Riccardo Lia
La Spezia, 02/03/1965
Independent Director
Rolando Polli
Milan, 11/10/1940
Independent Director
Carlo Alberto Carnevale Maffè
Vigevano (PV), 09/09/1961
Independent Director
Francisco Moreno de Alboran y Vierna
Ferrol (Spain), 06/29/1944
Board of Statutory Auditors
Chairman
Mario Tardini
Sassari, 04/29/1961
Statutory Auditor
Alberto Guiotto
Pordenone, 02/04/1967
Alternate Auditor
David John Ferrari
Cardiff (UK), 11/16/1966
Stautory Auditor
Sergio Gibelli
Calamandrana (AT), 11/18/1955
Alternate Auditor
Paolo Ribetto
Turin, 10/15/1963
Independent Auditors
PricewaterhouseCoopers SpA
The Company Boards were renewed as part of the extraordinary meeting of shareholders held on April 28, 2003, and are to
remain in office for three years.
The appointment of the statutory auditor, Sergio Gibelli, and the alternate auditor, Paolo Ribetto, took place during the ordinary
meeting of shareholders held on November 6, 2003, following the untimely death of Pietro Agostino Viotto in July.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 3
Economic and Financial Highlights of the Buongiorno Vitaminic Group
Pro-forma figures (in thousands of Euro)
Pro-forma figures
H1
H1
FY
2004
2003
2003
Economic and financial highlights
Sales of services
35,341
25,113
52,672
Value of production
36,371
26,180
55,376
Added Value (Val. of prod. - Mat. Cons. and Services)
10,611
7,650
16,475
2,412
(750)
518
(1,558)
(5,181)
(8,106)
Financial operations
(320)
(400)
(1,230)
Extraordinary operations
(423)
(691)
(1,382)
(2,301)
(6,272)
(10,719)
Gross operating margin
Operating profit / loss
Profit/Loss before taxes
Balance sheet highlights
Capital and reserves
11,625
9,771
5,800
Net financial position
3,006
(1,606)
(4,470)
30.0%
30.5%
31.3%
6.8%
-3.0%
1.0%
28.0%
-6.6%
5.0%
Earnings ratios
Added value/Revenues
Gross operating margin/Revenues
Gross Operating Margin/Net invested capital
Cost of staff
Staff (period average)
Revenues/Annual staff
Buongiorno Vitaminic S.p.A.
319
273
277
221.6
184.0
190.2
Half-Year Report as of June 30, 2004
Page 4
Stock Performance and Capitalization
July 18, 2003, was the first day of trading of Buongiorno Vitaminic shares (Nuovo Mercato, BVIT), following the
merger of Buongiorno S.p.A. into Vitaminic S.p.A.
At June 30, 2004, Buongiorno Vitaminic’s share capital amounted to Euro 18,935,354.36, divided into 72,828,286
ordinary shares of a par value of Euro 0.26 each.
Capitalisation at June 30, 2004, was Euro 125 million.
BUONGIORNO VITAMINIC
1/7/04
3.20
8000
3.00
7000
2.80
6000
2.60
5000
2.40
4000
2.20
3000
2.00
2000
1.80
1.60
1000
1.40
0
AUG SEP
OCT NOV DEC
JAN
FEB MAR APR MAY JUN
BUONGIORNO VITAMINIC
BUONGIORNO VITAMINIC - TURNOVER BY VOLUME(R.H.SCALE)
HIGH 3.17 18/7/03, LOW 1.48 25/7/03, LAST 1.70 30/6/04
Source: DATASTREAM
Mean daily trading volumes in the first half of 2004 amounted to over 350,000 shares, equivalent to Euro 615,000,
making Buongiorno Vitaminic one of the most traded stocks on the Nuovo Mercato.
On January 20, 2004, the Company announced an agreement with Banca IMI under which the latter undertook to
subscribe or place with institutional investors a capital increase in several tranches, to be called by the Company, up
to an overall countervalue of Euro 25 million. The first two tranches of this capital increase involved the issue and
placement with institutional investors of 2.27 and 2.71 million new shares each, at offer prices of Euro 1.6184 and
1.624 per share.
Stock Exchange symbol: BVIT
Reuters Code: BVTA.MI
Bloomberg Code: BVIT.IM
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 5
1 Report on Operations
1.1 The Group at June 30, 2004, and related developments
In the first half of 2004, the Buongiorno Vitaminic Group continued to pursue the streamlining and simplification of its
corporate structure, launched following the merger between Buongiorno and Vitaminic, closing or merging certain
companies that have long been dormant or no longer in operation.
In June, the Group sold its 100% stake in Vitaminic Sverige A.B., a non-operating Swedish entity based in
Stockholm.
During the half year, Skala Soft EOOD, a Bulgarian company fully owned by the Spanish subsidiary MyAlert.com
S.A. was removed from the consolidation area, under a management buy-out agreement finalized in August. The
disposal of the Bulgarian software house was aimed at focusing the Group’s technical resources on the core
platform and at decentralizing applications competencies on the various markets of reference.
In the coming months, the Group intends to simplify the structure of its French, German and Spanish operations.
The management target is to set up a single company operating on each market, with the exception of the UK
where, at least in the near future, the current three companies will continue to operate.
In June the Mexican limited liability company MyAlert S de R.I. de CV was set up in Mexico City, with a view to
launching the Group’s activities in Mexico and later in other Latin American countries, on the basis of the important
agreement entered into with ESMAS, a company that manages the interactive services of the Televisa Group, the
largest media group amongst Spanish-speaking countries and an international leader in the entertainment industry.
The Group’s layout at June 30, 2004, is presented in the following chart.
BUONGIORNO VITAMINIC S.p.A.
Italy
BUONGIORNO
Austria
Società
non
operative
Buongiorno Vitaminic S.p.A.
BUONGIORNO
France
BUONGIORNO
Germany
MYALERT.COM
Spain
BUONGIORNO
UK
VITAMINIC
France
VITAMINIC
Germany
QUANTUM GAP
Spain
VITAMINIC
UK
EUREKAN
MULTIMEDIA
France
PEOPLESOUND
Germany
VITAMINIC
Spain
PEOPLESOUND
UK
PEOPLESOUND
France
VITAMINIC
Holland
MYALERT S de
Rl de CV
Mexico
Half-Year Report as of June 30, 2004
Page 6
1.2 Business Model of Buongiorno Vitaminic
Buongiorno Vitaminic is one of the leading European companies in the market of design, production and/or
aggregation and distribution of multimedia content, mainly in the field of entertainment services via e-mail or
telephone.
Buongiorno Vitaminic has local teams in the main European markets (Italy, the United Kingdom, Spain, France,
Germany, and Austria) and in Mexico. Moreover, the Group distributes its services in a large number of other
countries, including Portugal, Switzerland, Greece, Poland, Croatia, Kuwait, the United Arab Emirates and South
Africa, through partnerships with local operators such as telephone service providers, mobile telephony retailers or
media groups.
Buongiorno Vitaminic operates with two lines of business – value-added Consumer Services for fixed and mobile
telephony and digital Marketing Services – whose synergies enhance the content aggregation, digital marketing, and
technology management skills of a team of about 350 European professionals coming from 18 different nationalities.
Within Consumer Services, Buongiorno offers an ample portfolio of services and content which includes information
and entertainment services via SMS/MMS, audio (ringtones, sound effects, true tones, etc.), images (logos,
wallpaper, screen savers), Java games, videos, and music and song dedications.
The Buongiorno catalogue includes a wide range of licensed content, including cartoons: South Park (MTV
Networks International), Spiderman 2 (Sony Pictures), Garfield (Paws) and the Pink Panther (MGM), Just for Laugh
video gags, Cocoasoft’s Java games and over 400,000 music tracks under agreements with 1,500 recording
companies.
Consumer services are marketed through a multi-channel strategy that includes direct distribution and partnerships
with telecom companies and media groups, for a potential target of over 250 million fixed and mobile telephone
users across Europe.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 7
Within Marketing Services, Buongiorno Vitaminic works with businesses to define and manage digital marketing
programs that focus on acquiring new customers, as well as increasing customer retention and satisfaction. These
services include access to an advertising audience of over 40 million individuals in Europe, the use of a proprietary
platform to manage single-source content and message services, as well as custom implementation of formats,
communications programs and interactive entertainment programs. Buongiorno Vitaminic can count on a customer
base of over 500 corporations in Europe, most of which are companies listed with Fortune 500.
All Buongiorno Vitaminic’s services are managed through a proprietary technology platform that manages the entire
process from the acquisition and management of content, to the acquisition and management of customers and the
delivery of the digital products through various channels (e-mails, mobile messaging services, web/wap services,
IVR/voice channels), reporting and after-sales support. Use of the platform is also included as a marketing service
offering to customers and partners that directly access the platform through a web interface, under ASP or licensing
agreements. On the overall, over 1,200 user IDs are active, and over 400 million messages are managed each
month.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 8
1.3 Trends of the Markets
Buongiorno Vitaminic’s markets of reference, Value Added Services (VAS) linked to mobile telephony and digital
marketing services, are still young and not sufficiently defined to allow for a precise measurement of their half-yearly
trends.
It could however be said that market trends in the first half of 2004 have been in line with expectations.
The market for Value Added Services (VAS) continues to grow rapidly, especially as a result of:
- the widespread dissemination of cell phones and the services accessible through them, as one of the main
“style symbols”, the personalisation of which is bound to gradually attract more attention and resources;
- the gradual extension of the potential customer base that covers new age brackets “in both directions” (the very
young and adults);
- the increasingly active role played by telecommunications operators in the development of VAS;
- the growing synergies with television and conventional media;
- the constant extension of offerings, especially in terms of the wealth of digital content, thanks to the
dissemination of new increasingly sophisticated handsets capable of supporting multimedia content and the
growth of available bandwidth.
Growth does not however seem to be uniform on the various markets and for various services, but progresses in
steps, with sudden spurts for certain services and downtrends in the case of others. Competition is high, with a very
few pan-European operators competing with a large number of local players on the main European markets.
The market for Marketing Services has shown signs of recovery, especially in the sector of online advertising.
Growth was not however uniform in all the various segments that, quite to contrary, featured rather differing
dynamics. Market growth in recent months was focused mainly on the “search” segment, linked to search engines.
E-mail advertising, a field in which Buongiorno specialises, maintains high potential, but seems to suffer in the
current phase of the negative effects of spamming and rampant viruses. There are however signs that these
problems may be overcome, thanks especially to joint initiatives by sector operators, and that e-mail advertising may
recover. Growth prospects in the mobile advertising sector, in which Buongiorno also specialises, seem to be
promising. These prospects however vary from country to country depending on market approach, the privacy
regulations applicable to telecommunications operators and differences in the availability of specific databases. The
Business Services sector continues to feature considerable potential, even though large companies seem to be
cautious when making investments. In terms of offerings, the market is highly pulverised, with leading companies in
niche sectors and geographical areas, but without a European player capable of offering a wide range of services
and solutions.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 9
1.4 The Evolution of Buongiorno Vitaminic Business
The Group’s rapid growth continued in the first half of 2004, with revenues up 41% over H1 2003, thus exceeding
the high annual target of 30% and showing the expected significant improvement both in gross operating margin
and net result.
The Consumer Services business line, in particular, grew by 79% compared to the first half of 2003. The rapid and
continuous growth in this area is the result of the Group’s strategy, based on the development and expansion of the
portfolio of digital content, and the setting up of a multi-channel distribution model that includes partnerships with
telecommunications operators, agreements with media companies and proprietary channels. The partnerships that
generated the most significant results in H1 2004 include the collaborative relationships underway with Tim and Rai
in Italy, Antena3 and Tele5 in Spain, mmO2 in the UK, ProSieben and T-Mobile in Germany, the Vodafone group in
various countries, the H3G group worldwide, and Teljoy in South Africa.
Direct service offerings on the market also plaid a significant role and, in the half-year in question, were supported by
marketing expenses amounting to nearly Euro 4.4 million.
The growth in Consumer Services sales for H1 was driven by a significant increase in the value of individual
transactions – with average per-unit revenues up from Euro 0.18 in 2003 to Euro 0.23 in Q1 2004 and Euro 0.26 in
Q2 2004. This phenomenon is the result of a shift in consumer demand towards services of greater value, such as
polyphonic ring tones or Java games, boosted by the gradual dissemination of new mobile handsets.
In the first half of 2004, Buongiorno Vitaminic sold about 84 million units of consumer products/services against
payment.
The “objects" sold, fall into the content category of infotainment (various information services, horoscopes,
sentences sent via SMS, MMS, WAP, etc.) or downloadable content (logos, ringtones, wallpaper, java games) and
interactive content (chat, voting, etc.).
End users (individual GSM numbers) amounted to about 11 million in the period, about half of whom made at least
one purchase in both the first and the second quarters of the year.
mn digital objects sold
Quarterly trend of the number of “objects” sold in the Consumer Services sector
48.9
6.5
11.6
Q1
2002
Q2
2002
38.9
29.4
32.4
29.9
Q4
2002
Q1
2003
Q2
2003
45
39
18.5
Q3
2002
Q3
2003
Q4
2003
Q1
2004
Q2
2004
During the six-month period, the Group also implemented a program to stimulate the online digital music business
by expanding the catalogue of licensed music tracks – which currently includes all of the hits of the Majors – and
signing high-profile distribution agreements such as the partnerships with Telecom Italia/ Rosso Alice and Rai.
In the first half of this year, revenues from Marketing Services returned to a growth rate of 7% compared to the
previous year (+11% in the second quarter), despite market trends that are still unsatisfying in the e-mail advertising
segment. Mobile advertising helped to offset this negative market effect in H1, particularly in the domestic market
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 10
where the company signed an agreement with TIM for the sale of advertising space regarding TimSpot. The
Business Services area achieved positive results in demonstration of the growing strength of the Group in assisting
large corporations in the use of the digital channel as a customer retention tool. In particular, eCRM services
increased with a series of new customers in the Italian finance industry, as did musical marketing products (Premium
CDs), particularly in the UK.
Geographic areas of operations in H1 2004 confirm the international scope of the Buongiorno Vitaminic Group,
which generates over 65% of its sales outside Italy, primarily on the Iberian Peninsula (Spain and Portugal) and the
UK. Despite high growth rates in the other European countries in which the Group operates, the Group has
acquired a level of market competition that still falls short of that attained by market leaders. Growth is expected to
be further boosted with the setting up of the new Mexican subsidiary and the implementation of new important
collaboration agreements in the US and the Far East.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 11
1.5 Operations of the Buongiorno Vitaminic Group
1.5.1 Economic operations
CONTO ECONOMICO CONSOLIDATO RICLASSIFICATO
(migliaia di Euro)
1° semestre 2004
RICAVI DELLE VENDITE E DELLE PRESTAZIONI
Anno 2003
1° semestre 2003
Variazioni
1°
sem '04
vs 1°
sem '03
35.341
52.672
25.113
10.228
1.030
2.704
1.067
(37)
36.371
(32)
(25.728)
(8.199)
55.376
(150)
(38.756)
(15.952)
26.180
(132)
(18.403)
(8.395)
10.191
100
(7.325)
196
2.412
(3.388)
(80)
(188)
(314)
518
(6.644)
(286)
(987)
(707)
(750)
(2.994)
(206)
(990)
(241)
3.162
(394)
126
802
(73)
Proventi / (oneri) straordinari netti
(1.558)
(200)
(120)
(423)
(8.106)
(723)
(507)
(1.383)
(5.181)
(401)
1
(691)
3.623
201
(121)
268
RISULTATO PRIMA DELLE IMPOSTE
(2.301)
(10.719)
(6.272)
3.971
Altri ricavi e proventi ed incrementi di imm.ni per lavori int.
TOTALE VALORE DELLA PRODUZIONE
Materiali di consumi e merci
Servizi e godimento beni di terzi
Costi del personale
MARGINE OPERATIVO LORDO
Ammortamenti
Svalutazioni immobilizzazioni immateriali e materiali
Svalutazione crediti ed altri accantonamenti
Oneri diversi di gestione
RISULTATO OPERATIVO
Proventi / (oneri) finanziari netti
Rettifiche di valore di attività finanziarie
The Value of Production as of June 30, 2004, amounted to Euro 36.37 million, up 38.9% over the pro-forma figure
for 2003 of Euro 26.18 million. In particular, the Group’s characteristic revenues reached Euro 35.34 million, up
40.7% compared to the same period of the previous year, already surpassing the Group’s targets for the year
underway.
A breakdown by business areas shows H1 2004 Consumer Services revenues of Euro 21 million, which accounts
for approximately 59.5% of total revenues, for growth of 79% over the same period of the previous year. Marketing
Services generated Euro 14,3 million, with an increase by 7%.
In terms of geographical area, in the first half of 2004, over 65% of overall revenues was generated outside Italy
(67% in the case of Consumer Services taken alone). Revenues in Italy grew by 13.4% compared to the previous
year, and by 61.3% abroad.
(thousand of Euros)
H1 2004 - INCOME FOR EACH LINE OF BUSINESS AND FOR EACH GEOGRAPHICAL AREA
Italy
Marketing Services
Consumer Services
Total income
Europe
Total H1
2004
Italy
Europe
Total H1
2003
Delta
% Delta
5,318
6,922
8,986
14,115
14,304
21,037
4,597
6,198
8,737
5,581
13,334
11,779
970
9,258
7%
79%
12,240
23,100
35,341
10,795
14,318
25,113
10,228
41%
The item “Other income and revenue and increase of fixed assets for internal works” includes amongst other things,
about Euro 400 thousand by way of other revenues and about Euro 620 thousand by way of the capitalization of
internal costs for the development of the technological platform.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 12
Gross operating margin (GOM) for the period amounted to Euro 2.4 million, a clear improvement compared to the
loss of Euro 750 thousand recorded in the first half of 2003. GOM currently stands at about 7% of the turnover for
the period, as against -3% for the corresponding period of 2003. This result was attained thanks to growth in
revenues and the constant optimization of operating costs.
Improved operating efficiency was reflected in a reduction in the incidence of personnel costs on turnover from
44.5% to 23.2%, with a turnover per employee that grew by over 20% from Euro 184 thousand to Euro 221
thousand on an annual basis. The incidence of other costs of production was reduced from 73.8% to 72.9%,
despite a product mix that entailed an increase in the incidence of variable product costs.
.
350
319
312
273
300
Employees
221
250
184
200
150
Value of Production/Employees
118
100
Lineare (Value of
Production/Employees)
50
0
H1 2002
H1 2003
H1 2004
Operating loss amounted to Euro -1.56 million, reflecting a clear improvement compared to the first half of 2003
(Euro -5.18 million). The main cost item under the gross operating margin was amortization and depreciation,
including Euro 1.563 million (on a half-yearly basis) in respect of the goodwill arising from the acquisitions of
MyAlert.com and Peoplesound.com Ltd, finalized between 2001 and 2002. Other amortization and depreciation for
the period amounted to approximately Euro 1,825 million. The gradual reduction of amortization and depreciation is
due to the features of the business model that allows for limited investments at full regime.
Write-downs and provisions fell sharply, moving from about Euro 1.2 million in the first half of 2003 to Euro 268
million in the same period of 2004, primarily as a result of the reduction of provisions to the credit risk fund, arising
from improvements in the quality of working capital.
Other operating expenses that amounted to Euro 240 thousand in the first half of 2003, increased to Euro 314
thousand, essentially in line with the growth in turnover.
Loss before taxation went from Euro 6.27 million in the first half of 2003 to Euro 2.30 million in the same period of
this year, reflecting an improvement of 63.3% compared to the corresponding period of last year. Excluding goodwill
amortization, loss for the period amounted to only Euro 0.74 million.
The following items have an impact on the result before taxation:
-
net financial charges amounting to Euro 201 thousand: mainly including interest on loans from banks and
the loan from shareholders amounting to Euro 1.5 million and expiring at the end of the year;
value adjustments of financial assets: amounting to Euro 120 thousand, mainly as a result of deficits arising
from the disposal of the stake in Skala Soft Food (Euro 60 thousand), the total write off of the minority
stakes in Future 121 OYO (Euro 37 thousand) and Proffer (Euro 9 thousand);
Net exceptional charges in the amount of Euro 423 thousand, reflecting a sharp drop compared to the
same period of the previous year, as a result of the completion of post-merger restructuring and integration.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 13
Economic breakdown by quarter
The second quarter of 2004 saw an increase of 5.2% in characteristic revenues and 5.5% of Total Value of
Production, compared to the first quarter of 2004. The increase in gross operating margin is even more significant,
having grown from Euro 1,014 thousand to Euro 1,398 thousand (+37.9%).
The gross margin in the second quarter therefore grew from 5.7% to 7.5%, confirming the soundness of the growth
policy and the strategy to increase margins, launched following the merger last year, especially with a view to
attaining a leading position on Western European markets.
GROSS OPERATING MARGIN - COMPARISON BY QUARTERS
Q2 2004
(in thousands of Euro)
SALES OF GOODS AND SERVICES
Other income and revenues and increase of fixed
t f i t
l
k
TOTAL VALUE OF PRODUCTION
Consumables and goods
Services and use of third-party assets
Personnel costs
GROSS OPERATING MARGIN
Buongiorno Vitaminic S.p.A.
Q1 2004
Change Q2 2004 vs.
% change Q2
Q1 2004
2004 vs. Q1 2004
18,116
557
17,224
474
892
83
5.2%
17.5%
18,673
(17)
(13,183)
(4,074)
17,698
(15)
(12,545)
(4,125)
0
1,014
975
(3)
(639)
51
5.5%
17.3%
5.1%
-1.2%
385
37.9%
1,398
Half-Year Report as of June 30, 2004
Page 14
1.5.2 Financing and investment operations
RECLASSIFIED CONSOLIDATED BALANCE SHEET STATEMENT
(in thousands of Euro)
6/30/2004
12/31/2003
6/30/2003
Change
6/30/2004 vs.
12/31/03
FIXED ASSETS
10,948
1,451
601
13,000
12,776
1,547
685
15,008
13,924
1,808
772
16,504
-1,828
-96
-85
-2,009
20,550
2,532
-19,711
-6,040
-2,669
20,609
2,906
-20,665
-5,319
-2,469
19,214
3,873
-20,369
-5,601
-2,883
-59
-375
954
-721
-200
SEVERANCE INDEMNITY FUND
-917
-849
-725
-68
FUNDS FOR RISKS AND CHARGES
-795
-1,420
-1,519
626
8,618
10,270
11,377
-1,652
18,935
-4,989
-2,294
-28
11,625
17,605
-763
-11,022
-20
5,800
17,481
-1,077
-6,382
-251
9,771
1,330
-4,226
8,728
-8
5,825
1,500
1,500
-
-
Intangible fixed assets
Tangible fixed assets
Investments
NET WORKING CAPITAL
Inventories
Trade debtors
Other assets
Trade creditors
Other liabilities
NET INVESTED CAPITAL
CAPITAL AND RESERVES
Paid-up capital
Reserves and profit (loss) carried forward
Consolidated profit (loss) for the period
Minority interests
MEDIUM AND LONG-TERM BORROWINGS
SHORT-TERM BORROWINGS
-17
-54
-2,019
37
Debts to banks and other financial institutions
-7,530
3,040
-4,506
-1,646
4,670
2,970
-2,471
6,096
1,606
-5,883
-1,630
-7,476
NET BORROWINGS
-3,006
4,470
1,606
-7,476
8,618
10,270
11,377
-1,652
Financial assets that are not fixed assets
Cash and cash equivalents*
TOTAL
SHAREHOLDERS'
BORROWINGS
EQUITY
AND
*: if negative, it constitutes an asset for the company
At June 30, 2004, the Buongiorno Vitaminic Group’s net invested capital amounted to Euro 8,618 thousand,
represented by:
-
Net fixed assets: amounted to Euro 13 million, down from 2003 due to depreciation and amortization,
which was only partially offset by new investments. New capitalizations, of a limited amount, are related
primarily to costs for the development of new modules for the technology platform;
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 15
-
Net working capital of Euro –2.7 million that has remained substantially unchanged since December 31,
2003, against an increase in business volumes, attained through a reduction in collection times and the
use of financial solutions for the collection of receivables;
-
Severance indemnity fund amounting to 917 thousand reflected an increase of Euro 70 thousand since the
end of financial year 2003;
-
Funds for risks and charges, amounting to Euro 795 thousand, reflected a sharp fall as a result of a gradual
use of the Fund set up to cover restructuring charges associated with the closure of operations in countries
that are no longer strategic or in which overlaps required operations to be streamlined.
Net invested capital is covered by shareholders’ equity amounting to Euro 11.62 million, reduced by the positive net
financial position of Euro 3.0 million.
Consolidated shareholders’ equity rose by Euro 5.8 million, to reach Euro 11.6 million at the end of June 2004. The
movement was determined by a reduction of Euro 2.3 million due to the loss for the period and an increase of Euro
8.2 million following the completion of the first two tranches of the increase in share capital subscribed in April and
May 2004, as well as the exercise of stock options.
Net financial position at the end of June 2004 was a positive Euro 3.0 million, up Euro 7.5 million over the same
figure at the end of 2003 of a negative Euro 4.47 million.
The movement in the financial position reflects Euro 7.6 million by way of capital increases, net of banking
commissions, completed in April and May 2004 and the partial subscription of stock options amounting to about
Euro 100 thousand.
Investments and liquid assets amounted to Euro 7.55 million at June 30, 2004, while the Group’s financial debt
amounted to Euro 4.54 million made up of Euro 3.04 million by way of exposure to banks secured by invoices and
Euro 1.5 million in exposure towards shareholders.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 16
1.5.3 Financial operations
RECLASSIFIED CONSOLIDATED CASH FLOW STATEMENT
(in thousands of Euro)
H1 2004
FY 2003
H1 2003 Change 30/06/04
vs. 30/06/03
NET FINANCIAL POSITION AT PERIOD START
(4,470)
2,479
2,479
(6,949)
(2,294)
3,588
(11,022)
7,163
(6,382)
3,303
4,088
285
68
(626)
(8)
729
148
(583)
(29)
(4,324)
24
(485)
0
(3,540)
44
(141)
(8)
4,269
200
1,703
2,117
(1,917)
(1,385)
(186)
(36)
27
(1,579)
(4,889)
(5)
(243)
247
(4,890)
(2,645)
75
(231)
151
(2,650)
1,260
(261)
195
(124)
1,071
8,242
(108)
8,133
106
268
374
0
32
32
8,242
(140)
8,101
0
(101)
0
0
0
(8)
(8)
101
187
188
0
(44)
(44)
0
36
36
3,006
(4,470)
(1,606)
4,612
CASH FLOW FROM ORDINARY ACTIVITY
Consolidated Group profit (loss) for the period
Amortization and write-down of intangible fixed
assets and investments
Net change in the severance indemnity fund
Net change in funds for risks and charges
Other ordinary activities items
CHANGE IN CURRENT ASSETS
CASH FLOW FROM INVESTING ACTIVITIES
Intangible fixed assets
Tangible fixed assets
Investments
Change in consolidation area
CASH FLOW FROM FINANCING
Paid increase of capital
Other changes
OTHER CHANGES IN THE EQUITY AND
FINANCIAL SITUATION THAT DO NOT ENTAIL
CASH FLOWS
Allotment and acquisition of companies through
issuing of stocks
Capital increase through contribution in-kind
Minority interests
NET FINANCIAL POSITION AT PERIOD END
The clear improvement in the Buongiorno Vitaminic Group’s net financial position at the end of the period of
reference is due to a combination of some of the main factors that emerge from an analysis of the cash flow
statement:
- significant cash flow generated by financing activities, arising from capital increases amounting to a total of
Euro 8.2 million;
- a reduction in cash flow from investing activities, especially with regard to intangible fixed assets (including
about Euro 500 thousand in bank commissions for the capital increases);
- a significant improvement in the cash flow from characteristic transactions that, for the first time, shows a
positive balance of Euro 729 thousand;
- a small movement of Euro 200 thousand in net working capital, a clear drop compared to the movement
recorded in the same period of the previous year.
In addition, free cash flow for Q2 2004, net of charges related to the increases in capital, was positive for the first
time.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 17
1.6 Foreseeable Evolution
In the second half of the year, Group revenues are expected to continue their rapid growth over the previous year.
The management believes that there are opportunities for growth in all geographic areas in which the Company
currently operates, particularly in the Consumer Services line. The new markets, such as Mexico and the US, with
respect to which agreements were recently signed, are expected to gradually make increasingly significant
contributions to growth in revenues.
Revenues from Consumer Services are expected to grow at the same rate as in previous quarters, albeit with a
slowdown in “quarter-on-quarter” terms towards the very end the year. To achieve this growth the Group will focus
on updating its range of services and multimedia content and on further broadening its multi-channel distribution
capacity, including in non-European countries.
The Group intends to stimulate growth in Marketing Services, both by taking advantage of its good positioning in
mobile advertising and by increasing the sales force in the Business Services area.
The Group also intends to develop new ideas and approaches aimed at converging Consumer and Marketing
Services, for instance, through the integration of e-mail and mobile initiatives.
The acquisition of Gsmbox SpA, expected to be completed in September 2004, will also allow for the consolidation
of further revenues.
Moreover, operations will remain focused on increasing profitability, with growth in the cost structure that will allow a
further reduction of the ratio to sales and an emphasis on lines of revenue which can provide good margins despite
intense competition on the markets in which the Group operates.
Lastly, side by side with the industrial integration of Gsmbox, the Group may also grasp new acquisition
opportunities.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 18
1.7 Performance of the Parent Company (Buongiorno Vitaminic S.p.A.)
During the first half of 2004, Buongiorno Vitaminic S.p.A. posted an increase in core business revenues, which rose
by 13.5% compared to the same period last year. This confirms its role as a leader in the segment of Interactive
Mobile Service (IMS) in Italy.
The sector of Consumer Services – i.e. value-added services (VAS) offered to mobile users – confirms the
characteristics of an expanding and constantly growing market that is nevertheless marked by powerful competition
among operators.
According to the latest market estimates published by the Permanent Observatory on Mobile VAS of the Milan
Polytechnic Institute, this market in Italy rose to a value of over Euro 400 million by the end of 2003, and it grew by
more than 20% in the first quarter of 2004.
The VAS segment in relation to telephone services has benefited from various aspects that have effectively made it
possible to expand the target of end users and thus increase the size of the market. We are convinced that, in
particular, the following factors drove development in the first half of the year:
- expansion of the portfolio of products and digital content also offered in an evolved form for third-generation
handsets;
- the definitive start-up of services offered by the UMTS network (by mid-August, H3G had approximately 1.3
million subscribers in Italy);
- the growth in distribution channels, also through media partnerships or collaboration agreements between
VAS service providers and media actors (television, printed press and radio);
- increasingly sophisticated terminals available on the market, allowing end users to appreciate the evolution
in this offer;
- powerful dynamism in terms of marketing and promotional actions by the entire VAS production chain.
Instead, the market for Marketing Services has demonstrated signs of an upswing with respect to the past few
years.
According to the most recent studies conducted by UPA (association of major companies investing in advertising),
the advertising market has started to grow again after a three-year slump. Initial forecasts indicate an increase in
aggregate investments of at least 3%, most of which going to television and the new media (Internet and telephone).
Activities in the Advertising sector have been stimulated by advertising via SMS (mobile advertising), an area in
which Buongiorno Vitaminic is Italy’s leading company in terms of commercial and operative management capacity,
as well as the effect of the important commercial collaboration with TIM through the TIMSpot service.
In Business Services, the introduction of an offer integrated with music solutions (e.g. CDs and ringtones) has made
it possible to propose innovative marketing solutions to acquire customers and ensure their loyalty to leading
companies in the banking and insurance sector (BNL, Unicredito, SanPaoloIMI, Zuritel and 6Sicuro), consumer
sector (L’Oreal, Barilla, Danone), large-scale retail sector (GS, Metro and Autogrill) and hi-tech sector (TDK, Philips,
HP and 3M).
In this line of services, note must also be made of the good trend in revenues connected with the sale, on a
licensing basis, of the technological platform to H3G; this contract, stipulated in 2002, envisaged part of the price
tied to the number of service subscribers.
At June 30, 2004, the Parent Company Buongiorno Vitaminic S.p.A. had 149 employees, an increase with respect
to the staff of 123 at the end of 2004. The increase in internal resources was determined by the increase in turnover
of the Italian Business Unit, as well as the decision to bolster several central functions (particularly the technological
area and the Global Mobile Unit). As activities serving the Group, these areas required the recruitment of specialized
employees to manage growing operating complexity and international vocation.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 19
1.7.1 Economic Operations of the Parent Company
RECLASSIFIED PROFIT AND LOSS ACCOUNT
(in thousands of Euro)
First Half 2004
Year 2003
First Half 2003
Change H1
2004 vs. H1
2003
SALES OF GOODS AND SERVICES
Other income and revenues and increase of fixed
assets for internal works
13,885
861
25,451
2,095
13,530
942
355
(81)
TOTAL VALUE OF PRODUCTION
14,745
(32)
(9,978)
(3,709)
27,546
(59)
(19,854)
(7,220)
14,472
(31)
(11,048)
(3,892)
273
(1)
1,070
183
1,026
(1,047)
0
0
(129)
413
(1,987)
(173)
(498)
(175)
(499)
(719)
(158)
(519)
(112)
1,525
(328)
158
519
(17)
Net exceptional earnings / (charges)
(151)
(228)
(1,449)
(429)
(2,421)
(14)
(8,577)
(925)
(2,007)
203
(3,590)
(426)
1,856
(431)
2,141
(3)
PROFIT (LOSS) BEFORE TAXATION
(2,257)
(11,936)
(5,820)
3,563
Consumables and goods
Services and use of third-party assets
Personnel costs
GROSS OPERATING MARGIN
Amortization, depreciation and write-downs
Intangible and tangible fixed assets write-downs
Allowance for bad debts and other provisions
Other operating costs
OPERATING PROFIT / (LOSS)
Net financial earnings / (charges)
Value adjustments of financial assets
During the first half of 2004 Buongiorno Vitaminic S.p.A. posted an aggregate growth of approximately 13.5% in
core business revenues, with a growth of 2.6% in the Value of Production, which rose from Euro 13,530 thousand
to Euro 13,885 thousand. The Value of Production rose by just 2.6% due to the notable decrease in intercompany
revenues. This can be attributed to the reduction in services provided by the Parent Company following completion
of the start-up activities and the transfer to Peoplesound.com Ltd of the purchases of premium CDs, formerly
managed centrally.
(in thousands of Euro)
First Half 2004
First Half 2003
Marketing Services
5,318
4,597
Consumer Services
6,922
6,198
12,240
10,795
Total
Intercompany services
Total
1,645
2,735
13,885
13,530
A breakdown of turnover shows an increase in revenues attributable to the excellent performance of both lines of
business. Consumer Services rose by 11.7%, whereas Marketing Services increased by 15.7%.
During the first half of 2004 the gross operating margin (GOM) of the Parent Company was Euro 1,025 thousand,
as opposed to a loss of Euro 499 thousand posted during the same period last year.
This clear-cut improvement is due not only to the growth in revenues but also to the significant reduction in costs for
services as well as personnel costs.
The former decreased by nearly 10% on a six-monthly basis due to full exploitation of the synergies arising from the
merger between Buongiorno S.p.A. and Vitaminic S.p.A., which commenced effective July 16, 2003.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 20
The decrease in personnel costs (about 5% on a six-monthly basis), despite the increase in employees (+26), arose
from the different composition of company staff (more “junior” staff on average) and the lower incidence of variable
bonuses.
The Operating Loss was Euro 151 thousand, reflecting a decisive improvement over the loss of approximately Euro
2 million posted in the first half of 2003.
An important factor in these results was the fact that no provisions were made – in general or to the fund for bad
debts – due to the good quality of current assets (Euro 519 thousand in the first half of 2003), coupled with the lack
of write-downs on tangible and intangible fixed assets.
”Amortization, depreciation and write-downs” for the period rose by approximately Euro 328 thousand to Euro 1,047
thousand, as opposed to Euro 719 thousand in the first half of 2003.
”Other operating costs” rose slightly (from Euro 112 to 129 thousand), in keeping with the growth in turnover.
Loss before taxes went from Euro 5,820 thousand in 2003 to Euro 2,257 thousand in 2004.
A significant contribution to this improvement came from the decrease in “Value adjustments to financial assets”
compared to the same period last year, by virtue of the improved economic results of all the subsidiaries.
Increased bank exposure, above all during the first quarter of 2004, led to higher financial management costs
compared to the same period in 2003. At the end of the first half of the year, net financing operations totaled Euro
228 thousand.
Instead, net extraordinary operations essentially remained the same, generating costs of Euro 429 thousand during
the period, attributable mainly to the last phases of the integration process between Buongiorno and Vitaminic.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 21
1.7.2 Financing and Investment Operations of the Parent Company
RECLASSIFIED BALANCE SHEET
(in thousands of Euro)
6/30/2004
12/31/2003
6/30/2003
Change
6/30/2004 vs.
12/31/03
FIXED ASSETS
Intangible fixed assets
Tangible fixed assets
Investments
4,142
989
29,292
34,423
3,756
1,044
26,473
31,273
3,606
1,337
29,545
34,488
386
(55)
2,819
3,150
12,442
1,164
(14,605)
(3,791)
(4,790)
17,017
1,100
(14,998)
(3,349)
(230)
15,195
6,066
(16,781)
(3,451)
1,029
(4,576)
65
393
(442)
(4,560)
(913)
(845)
(725)
(68)
(4,179)
(4,914)
(4,970)
735
24,541
25,284
29,822
(742)
18,935
10,508
(2,257)
27,186
17,605
15,865
(12,269)
21,202
17,481
15,783
(5,975)
27,289
1,330
(5,357)
10,012
5,985
1,500
1,500
-
-
NET WORKING CAPITAL
Inventories
Trade receivables
Other assets
Trade payables
Other liabilities
SEVERANCE INDEMNITY FUND
FUNDS FOR RISKS AND CHARGES
NET INVESTED CAPITAL
CAPITAL AND RESERVES
Paid-up capital
Reserves and profit (loss) carried forward
Profit (loss) for the period
MEDIUM AND LONG-TERM BORROWINGS
SHORT-TERM BORROWINGS
(13)
(43)
(1,753)
31
Debts to banks and other financial institutions
(5,232)
1,100
(4,145)
(676)
3,302
2,582
(1,109)
5,395
2,533
(4,556)
(2,202)
(6,727)
NET BORROWINGS
(2,645)
4,082
2,533
(6,727)
24,541
25,284
29,822
(742)
Financial assets that are not fixed assets
Cash and cash equivalents*
TOTAL
SHAREHOLDERS'
BORROWINGS
EQUITY
AND
*: if negative, it constitutes an assets for the company
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 22
At June 30, 2004 the Parent Company Buongiorno Vitaminic S.p.A. posted a net invested capital of Euro 24.5
million, composed of net fixed assets of Euro 34.4 million and negative net current assets of Euro 4.8 million, net of
the fund for risks and charges of Euro 4.2 million and the severance indemnity fund of Euro 913 thousand.
Net invested capital is covered by financial resources composed of Capital and Reserves of Euro 27.18 million, less
the positive net financial position of Euro 2,645 thousand.
The main changes in the balance sheet for the period of reference relate to the following movements due to
utilization:
-
-
net current assets posted a negative change of approximately Euro 4,560 thousand, attributable to the
conversion of debtors from subsidiaries into capital, the reduction of trade receivables due to improved
collection conditions and timing, as well as the use of financial solutions to unblock debtors;
the fund for risks and charges decreased by approximately Euro 735 thousand due to the partial use of
funds created to cover losses generated by the subsidiaries in previous years and, to a lesser extent, by
the partial use of the fund established to restructure the companies of the former Vitaminic Group, which
was involved in the corporate and operational streamlining process.
Likewise, among the sources of financing, capital and reserves rose to Euro 27,186 thousand, up approximately
Euro 6 million as a result of capital increases worth approximately Euro 8.2, million, adjusted for the losses accrued
during the period.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 23
RECLASSIFIED CASH FLOW STATEMENT
(in thousands of Euro)
H1 2004
FY 2003
H1 2003
Change
6/30/2004 vs.
6/30/2003
NET FINANCIAL POSITION AT PERIOD START
(4,082)
824
824
(4,906)
(2,257)
1,047
(12,269)
2,160
(5,974)
877
10,012
(1,113)
1,495
68
1,227
1,580
6,582
150
3,371
(6)
2,799
29
1,093
(1,176)
(5,087)
(82)
(2,145)
1,586
2,848
1,785
1,409
1,063
(1,290)
(89)
(4,564)
(5,943)
(3,381)
127
(3,537)
(6,792)
(2,146)
(68)
(1,375)
(3,589)
2,091
(216)
(1,027)
849
8,242
8,242
106
106
0
0
8,136
8,136
Allotment and acquisition of companies through the
issuing of stocks
Capital increases through contribution in-kind
0
(101)
0
101
0
101
0
(101)
Balancing of losses of subsidiaries through a reduction
in credits
Balancing of losses of subsidiaries through the use of
the shareholding write-down fund
1,962
25,373
23,039
(1,962)
(25,373)
(23,039)
23,411
0
0
0
0
2,645
(4,083)
(2,532)
6,727
CASH FLOW FROM ORDINARY ACTIVITIES
Consolidated profit (loss) for the period
Amortization and write-downs of intangible fixed assets
Shareholdings write-downs
Net change in severance indemnity fund
Net change in funds for risks and charges
CHANGE IN CURRENT ASSETS (*)
CASH FLOW FROM INVESTING ACTIVITIES
Intangible fixed assets
Tangible fixed assets
Investments
CASH FLOW FROM FINANCING ACTIVITIES
Paid increase of capital
OTHER CHANGES IN THE EQUITY AND FINANCIAL
SITUATION THAT DO NOT ENTAIL CASH FLOWS
NET FINANCIAL POSITION AT PERIOD END
(*) net of intercompany account payables used to balance losses of subsidiaries
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 24
During the reference period, for the very first time the Company’s management of current assets generated positive
net cash flows of approximately Euro 1,580 thousand, thereby achieving economic/financial balance on an
operating level.
Instead, investment activities absorbed resources totaling Euro 6 million, of which approximately Euro 4.6 million in
investments, tied mainly to the recapitalization of subsidiaries, and Euro 1.3 million in intangible fixed assets.
Recapitalization of the foreign companies was handled mainly through the conversion of the Parent Company’s
trade and financial debtors, a financing method that essentially influenced the trend in current assets.
The first two portions of the capital increase and the partial subscription of stock options brought in Euro 8,242
thousand in resources.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 25
1.8 Human Resources
During the first half of 2004, great emphasis was placed on enhancing human capital by developing internal
resources but also through a widespread and high-quality recruiting plan.
With regard to internal resources, several programs were developed for training and evaluating key resources, and
these programs will be extended to all personnel in the coming months.
Moreover, several micro-organizational activities were set up to harmonize structures and internal processes in the
different Group companies. The project focuses on improving the effectiveness and efficiency of the operating
structures, and it is based on the possibility of standardized comparison among the structures of the various
countries, identifying within each one internal best practices and benchmarks to be extended to the entire Group.
As to recruitment, special attention was paid to the selection process from both a qualitative standpoint – with
specific selection processes to hire resources showing great potential – and a quantitative one, reducing the
timeframe for bringing in new resources. As a result of these activities, over 60 new employees have been hired,
90% of which in Italy, Spain and the United Kingdom. They were hired following over 500 job interviews.
1.9 Technological Innovation
During the first half of 2004, the development of Buongiorno Vitaminic’s technological architecture was oriented
above all towards implementing new technical functions required for efficiently backing the increasingly complex
business demands of the Consumer Services area.
Specifically, the offer to the public of increasingly complex items, such as music, videos and Java games, has
required the integration in Be3A of more sophisticated functions, such as modules to develop Web, WAP and voice
portals, and modules to manage music rights (DRM) and to manage electronic payment systems.
Moreover, there has been significant expansion in the quantity and potential of active connections towards the main
mobile operators of all the countries in which Buongiorno Vitaminic works, not only in Europe but also around the
world.
In the development of digital music services, synergies have been exploited between the technical assets of the
former Vitaminic and those of the former Buongiorno, adopting hardware and software solutions focusing on further
reducing costs over the medium term.
Development continues to be conducted entirely with in-house company resources, whose expertise contributes to
reinforcing capabilities and making the Group’s offer unique.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 26
1.10 Main Corporate Events in the Half-Year
The main corporate events that occurred during the first half of 2004 are detailed below.
January
•
On January 20, 2004, an agreement with Banca IMI SpA was signed, by which the bank undertakes to
underwrite and/or place with institutional investors new Buongiorno Vitaminic shares up to a maximum total
value of €25 million (par value plus additional paid-in capital). The issue of new shares can take place in stages
through December 31, 2005, at the discretion of Buongiorno Vitaminic, with each tranche being of no more
than 5 million shares.
February
•
On February 12, 2004, the Board of Directors approved the Quarterly Report as of December 31, 2003.
March
•
On March 8, the Extraordinary Shareholders’ Meeting unanimously approved the proposal to increase share
capital, on a divisible basis, with a premium and excluding option rights as provided for by Article 2441,
Paragraph 5, of the Italian Civil Code, for a maximum nominal value of Euro 4,680000. This will be implemented
by issuing a maximum of 18,000,000 ordinary shares with a par value of Euro 0.26 each, cum coupon, to be
offered to institutional investors for subscription. The Board of Directors was vested with the authority to
delegate one or more of its members to decide on the timing and procedures for the approved increase and to
determine the issue price; approval of this capital increase reserved by the Shareholders’ Meeting of
Buongiorno Vitaminic represented a condition precedent to the agreement signed with Banca IMI S.p.A. on
January 20, 2004.
•
On March 23 the Board of Directors approved the draft of the 2002 Annual Report.
April
•
On April 13 the first tranche of the capital increase was called, closing on April 28 with the issue of 2.27 million
new shares at the offer price of Euro 1.6184 placed with institutional investors.
•
On April 28, the General Shareholders Meeting unanimously approved the Financial Statements for the year
ended December 31, 2003. At the time, it unanimously resolved to pay the directors who are not vested with
special responsibilities a gross aggregate fee of Euro 30,000 for 2004, giving the Board of Directors the power
to determine how this fee would be distributed among the parties involved.
•
On April 29, the Company announced its agreement with ESMAS, a company that manages the interactive
services of the Televisa Group, the leading Spanish-language media group, through which Buongiorno Vitaminic
has expanded its activities to South America. When the agreement was announced, the opening of new offices
in Mexico City was also announced, together with the establishment of subsidiary Buongiorno MyAlert Srl,
under Mexican law. Its goal is to post revenues of Euro 3 million by the end of this year and immediately reach
the breakeven point in EBITDA.
May
•
On May 11 the Board of Directors approved the Quarterly Report at March 31, 2004.
•
On May 18 the second tranche of the capital increase was called, closing on June 1 with the issue of 2.71
million new shares at the offer price of Euro 1.624 placed with institutional investors.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 27
June
•
On June 10 Buongiorno Vitaminic signed the definitive agreement for the acquisition of a 95.1% stake in
Gsmbox SpA, a leading mobile media company in the area of interaction and TV participation in Italy and Spain.
Gsmbox SpA holds 55% of the share capital of Gsmbox España S.A., a company in which Telecinco holds a
45% stake. In turn, Gsmbox holds 50% of the share capital of Endemol-Gsmbox SpA, a joint venture recently
established with Endemol Finance BV. The transaction will be completed via a stock contribution, which will give
Gsmbox shareholders approximately 4.36 million Buongiorno Vitaminic shares, for a countervalue – at the
reference price of June 9 – of approximately Euro 7.2 million.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 28
1.11 Events Following June 30, 2004
In July
•
Based on the provisions of the Shareholders’ Agreement signed on February 4, 2003, the number of shares
participating in the agreement and subject to the lock-up restriction was automatically reduced on July 16,
2004.
•
On July 26, the Board of Directors called an Extraordinary Shareholders’ Meeting to discuss the proposal for a
capital increase totaling 4,589,372 new shares reserved for the contribution of 100% of the shares of Gsmbox
S.p.A. and the proposal to amend the Company Bylaws, in order to adapt them to the new regulations
envisaged by corporate law reforms in Italy.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 29
1.12 Main Shareholders
(Holdings as indicated in the Share Register and/or notifications pursuant to Art. 120 of Legislative Decree No.
58/1998.)
The chart below shows the shares held by the shareholders who have Buongiorno Vitaminic S.p.A. stock exceeding
2% of the Share Capital at June 30, 2004.
Del Rio Mauro*
29,40%
Mercato
61,92%
Mata Jiménez
Jorge
6,00%
Barilla Holding
SpA
2,68%
*directly and indirectly
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 30
1.13 Report on the Stock Option Plan
Both Buongiorno S.p.A. and Vitaminic S.p.A. have always favored the possibility of implementing stock option plans,
feeling that they are an appropriate tool in building relationships between the company and its employees/directors
by providing an incentive to create a professional, long-lasting relationship. As such, over the years various equitybased incentive plans have been implemented, in compliance with Consob notice No. 11,508 of February 15,
2000 regarding stock option plans, as described below.
In particular, in 2003 the following stock option plans were “active”:
a) the stock incentive plan promoted in 2000 by Vitaminic S.p.A. As of January 1, 2003, this plan included 81,051
stock options with an exercise price of €30.78. No options were exercised in 2003. On June 30, 2003, this stock
option plan came to a close, so there are no further options to be exercised.
b) the conversion of the Buongiorno S.p.A. stock incentive plan in effect at the time of the merger into Vitaminic
S.p.A.;
c) the launch of new stock incentive plans following the merger.
Below are the details of points (b) and (c) above.
Conversion of the Buongiorno S.p.A. stock incentive plan in effect at the time of the merger into Vitaminic S.p.A.
Foreword
At the time of the merger agreement entered into by Buongiorno S.p.A. and Vitaminic S.p.A., Buongiorno S.p.A.
had outstanding stock option plans giving the option holders the right to Buongiorno shares at strike prices set by
the Board of Directors based on the market value of the stock at the time the options were allocated. These options,
as established by Article 14 of the regulations of each of the stock option plans, have remained in effect after the
merger, as well, ensuring that the option holders be granted the same rights after the merger as they had prior to the
merger. As a result, the merger agreement itself established that for each option held on Buongiorno stock a new
option would be issued giving the option holder the right to a number of Buongiorno Vitaminic S.p.A. shares based
on the swap ratio adopted for the merger.
The Buongiorno S.p.A. plans, as described below, were thereby transferred to Buongiorno Vitaminic S.p.A. with the
same option holders (i.e., those who held valid options which had not been exercised as of the effective date of the
merger), the same regulations, and the same strike prices as for the Buongiorno S.p.A. plans based on the swap
ratio adopted for the merger.
Structure and conditions of the Buongiorno S.p.A. stock option plans
The Buongiorno S.p.A. stock option plans were the result of three separate increases in share capital as authorized
by the shareholders on the following dates:
1. February 26, 2000 (the “First stock option plan”)
2. November 29, 2000 (the “Second stock option plan”)
3. August 30, 2001 (the “Third stock option plan”)
These plans were covered by three separate regulations which were all essentially similar:
(a)
each beneficiary was granted options, free of charge, to purchase Buongiorno S.p.A. shares, issued in
relation to the previously authorized increases in share capital; each option gave the holder the right to one
share;
(b)
the beneficiaries were divided into two categories: (i) “Category A”: holders of options which could be
exercised when certain objectives were reached (as established from time to time by the Buongiorno S.p.A.
Board of Directors); (ii) “Category B”: other holders of options which could be exercised based on time of
employment with the Group;
(c)
the options could be exercised in stages, and four exercise periods were established each year, as
described in more detail below;
(d)
the options matured had to be exercised by December 31, 2005.
The individual regulations established that the matured options could be exercised between “the fifteenth and last
day of the months of February, May, August, and November of each year, or in other periods established either by
the Board of Directors itself or by proxy as approved by the Board”.
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 31
Status of Buongiorno S.p.A. stock option plans as of the increase in share capital for the merger, and methods of
conversion
As of April 28, 2003, the date of approval of the increase in share capital for the merger, the Board of Directors of
Buongiorno S.p.A. had granted a total of 1,300,525 options for the three stock option plans. Of these options:
- 927,830 had a strike price of Euro 7.75;
- 372,695 had a strike price of Euro 23.66.
Vitaminic S.p.A. shareholders were then asked to approve three additional increases in share capital in their
extraordinary meeting of April 28, 2003, as described in more detail below, in order to convert the three Buongiorno
S.p.A. stock option plans into the same number of post-merger Buongiorno Vitaminic stock option plans.
•
The conversion of the first stock option plan
As of the date of approval of the increase in share capital for the merger, the Board of Directors of Buongiorno
S.p.A. had granted a total of 799,434 options for the first stock option plan, of which:
- 637,334 had a strike price of Euro 7.75
- 162,100 had a strike price of Euro 23.66.
Consequently, based on the swap ratio of 13 Vitaminic shares for every 2 Buongiorno shares, Vitaminic S.p.A.
shareholders were asked to approve, for the purposes of the conversion of the first stock option plan with the same
terms and conditions, a divisible increase in share capital up to a maximum value of Euro 1,351,043.46 by issuing a
maximum of 5,196,321 new Vitaminic ordinary shares at a par value of Euro 0.26 with standard dividend rights.
In particular, of these 5,196,321 new Vitaminic shares:
- up to 4,142,671 new shares can be settled at a strike price of Euro 1.19 (amount calculated by applying the swap
ratio specified above to the original strike price: Euro 7.75:6.5=Euro 1.19);
- up to 1,053,650 new shares can be settled at a strike price of Euro 3.64 (amount calculated by applying the swap
ratio specified above to the original strike: Euro 23.66:6.5=Euro 3.64).
•
The conversion of the second stock option plan
As of the date of approval of the increase in share capital for the merger, the Board of Directors of Buongiorno
S.p.A., in addition to approving the regulations for this plan, had granted a total of 31,326 options for the second
stock option plan at a strike price of Euro 23.66.
Consequently, based on the swap ratio of 13 Vitaminic shares for every 2 Buongiorno shares, Vitaminic S.p.A.
shareholders were asked to approve, for the purposes of the conversion of the second stock option plan with the
same terms and conditions, a divisible increase in share capital up to a maximum value of Euro 52,940.94 by
issuing a maximum of 203,619 new Vitaminic ordinary shares at a par value of Euro 0.26 with standard dividend
rights.
In particular, these 203,619 new Vitaminic shares can be settled by exercising an equivalent number of options at a
strike price of Euro 3.64.
•
The conversion of the third stock option plan
As of the date of approval of the increase in share capital for the merger, the Board of Directors of Buongiorno
S.p.A. had then granted a total of 469,765 options for the third stock option plan, of which:
- 290,496 had a strike price of Euro 7.75;
- 179,269 had a strike price of Euro 23.66.
Consequently, based on the swap ratio of 13 Vitaminic shares for every 2 Buongiorno shares, Vitaminic S.p.A.
shareholders were asked to approve, for the purposes of the conversion of the third stock option plan with the same
terms and conditions, a divisible increase in share capital up to a maximum value of Euro 793,902.72 by issuing a
maximum of 3,053,472 new Vitaminic ordinary shares at a par value of Euro 0.26 with standard dividend rights.
In particular, of these 3,053,472 new Vitaminic shares:
- up to 1,888,224 could be settled at a strike price of Euro 1.19;
- up to 1,165,248 could be settled at a strike price of Euro 3.64.
Specification of beneficiaries and assignment of options
In fulfillment of the merger agreement between Vitaminic S.p.A. and Buongiorno S.p.A. dated February 4, 2003, the
Board of Directors of Buongiorno Vitaminic in their meeting of July 29 executed the shareholders’ resolutions
regarding the three stock option plans by specifying beneficiaries and thereby ensuring the full conversion of the
plans by these beneficiaries.
As a result of the above, as of the date of preparation of this report, the beneficiaries are now holders of options for
a total of 8,453,412 shares in Buongiorno Vitaminic S.p.A. as follows:
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 32
Launch of new stock incentive plans following the merger.
Buongiorno Vitaminic Group is passing through a particularly important phase of its development. The company,
following the recent completion of the merger of Buongiorno S.p.A. and Vitaminic S.p.A., is approaching a period of
significant change and business expansion, which will require the hiring and motivation of new personnel and the
further development of those who are already working for the Group, all of whom possess skills and experience
which will ensure success in the future. As such, the existing stock option plans would appear insufficient, both
because of the current market price of the stock (which makes the options no longer attractive) and because the
plans in effect are approaching their conclusion.
In the meeting of shareholders of November 6, 2003, Buongiorno Vitaminic S.p.A. defined two new increases in
share capital for the purposes of assigning options to employees and directors who merit such incentives.
The Employee Plan
The objective of this plan is to make it possible for the company to:
- grant new stock options to employees of the Company and of other Group companies who merit particular
recognition or to new hires for which similar treatment is appropriate (“New Employee Stock Options”);
- grant new stock options to employees of the Company and of other Group companies who merit particular
recognition or to new hires for which similar treatment is appropriate, in the event that the stock options
granted as part of previous plans are no longer exercisable (“Additional New Stock Options”).
For this plan, a reserved capital increase of up to 2,600,000 newly issued shares was approved in order to grant up
to 1,400,000 New Employee Stock Options and 1,200,000 Additional New Stock Options.
The Directors Plan
The objective of this plan is to make it possible for the company to grant stock options to Directors (or to third
parties or employees who are considered of key importance to the company) in order to motivate them to achieve
strategic and operational objectives (“New Stock Options for Directors”).
For this plan, a reserved capital increase of up to 1,400,000 newly issued shares was approved in order to grant up
to 1,400,000 New Stock Options for Directors.
Characteristics of the new incentive plans
The plans are covered by two Regulations, which are essentially the same, issued by the Board of Directors based
on the regulations for existing plans in effect within the Group. Some of the most important terms and conditions are
as follows:
- deadline for assigning stock options: December 31, 2007
- stock option maturity: upon reaching objectives and/or following a minimum time of employment/service with the
company;
- determination of the stock option issue price: in general, the regulations are based on the principle of fiscal
neutrality. The strike price is therefore calculated based on the average market price over the last month. In
particular, with regard to the increase reserved to Directors, the Board of Directors also considered the
shareholders’ equity of the company and the average price of the share prior to assigning the options, in
accordance with the criteria defined by applicable Law (Article 2441(6) of the Italian Civil Code), where such value is
greater than the average market value over the last month.
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 33
Summary of active stock option plans as of June 30, 2004
Further details on the stock option plans in effect as of the end of the year are provided in the table below.
Plan 1 (based on Buongiorno S.p.A. shareholders’ resolution of February 26, 2000)
strike price
(Euro )
options assigned
and not exercised
at 12/31/2003
1.19
options
assigned in
FY 2004
options exercised options expired
in FY 2004
in FY 2004
4,112,671
options extant
at 6/30/2004
85,540
-
4,027,131
-
-
1,053,650
85,540
-
5,080,781
3.64
1,053,650
-
TOTAL
5,166,321
-
Plan 2 (based on Buongiorno S.p.A. shareholders’ resolution of November 29, 2000)
strike price
(Euro )
options assigned
and not exercised
at 12/31/2003
3.64
options
assigned in
FY 2004
options exercised options expired
in FY 2004
in FY 2004
203,619
-
options extant
at 6/30/2004
-
203,619
Plan 3 (based on Buongiorno S.p.A. shareholders’ resolution of August 30, 2001)
strike price
(Euro )
options assigned
and not exercised
at 12/31/2003
1.19
options
assigned in
FY 2004
options exercised options expired
in FY 2004
in FY 2004
1,829,224
options extant
at 6/30/2004
38,726
-
1,790,498
-
-
1,165,248
38,726
-
2,955,746
3.64
1,165,248
-
TOTAL
2,994,472
-
Plan 4 (based on Buongiorno Vitaminic S.p.A. shareholders’ resolution of November 6, 2003)
strike price
(Euro )
options assigned
and not exercised
at 12/31/2003
2.12
options
assigned in
FY 2004
options exercised options expired
in FY 2004
in FY 2004
412,000
options extant
at 6/30/2004
-
-
412,000
-
-
652,500
-
-
1,161,000
-
-
2,225,500
2.21
652,500
-
1.74
1,161,000
TOTAL
1,064,500
1,161,000
Plan 5 (based on Buongiorno Vitaminic S.p.A. shareholders’ resolution of November 6, 2003)
strike price
(Euro )
options assigned
and not exercised
at 12/31/2003
2.29
TOTAL PLANS
options
assigned in
FY 2004
520,000
9,948,912.,00
Buongiorno Vitaminic S.p.A.
options exercised options expired
in FY 2004
in FY 2004
1,161,000
124,266
Half-Year Rport as of June 30, 2004
-
options extant
at 6/30/2004
520,000
10,985,646
Page 34
1.17 Treasury Stocks
As of June 30, 2004, Buongiorno Vitaminic S.p.A. did not hold any treasury stocks, nor has it made any
acquisitions or sales of such stocks during the first half of 2004, either directly or indirectly, nor through trust
companies or other third parties.
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 35
2. Half-Year Report as of June 30, 2004
2.1 Consolidated Half-Year Report for the Period Ended June 30, 2004 – Buongiorno Vitaminic Group
FINANCIAL STATEMENTS
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock Euro 18,935,354
Registered office: Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
30.06.2004
CONSOLIDATED BALANCE SHEET - ASSETS
A)
CALLED-UP SHARE CAPITAL NOT PAID
1)
2)
3)
4)
5)
5) bis
6)
7)
I
a
b
2)
a
b
3)
a
b
4)
a
b
5)
1)
a
b
c
2)
a
b
d
3)
4)
Tangible fixed assets
Land and buildings
Costs and possible revaluations
Depreciation fund
Plant and machinery
Costs and possible revaluations
Depreciation fund
Industrial and commercial equipment
Costs and possible revaluations
Depreciation fund
Other assets
Costs and possible revaluations
Depreciation fund
Work in process and advances to suppliers
II - Total tangible fixed assets
Net investments
Shareholdings
Subsidiaries
Affiliated companies
Other companies
-Shareholding write-down fund
Debtors
Subsidiaries
Affiliated companies
Other companies
Other securities
Treasury stock
III - Total investments
B)
I
1)
2)
3)
4)
5)
1)
2)
3)
1,803
1,280
132
681
227
6,567
409
1,675
12,774
195
601
174
733
341
8,133
1,948
1,799
13,924
0
0
0
18
19
2
3
1,431
1,453
0
1,451
C)
TOTAL CURRENT ASSETS
D)
PREPAYMENTS AND ACCRUED INCOME
(A+B+C+D)
Half-Year Rport as of June 30, 2004
0
1,808
216
3
168
45
0
429
Cash and cash equivalents
Bank and postal accounts
Cheques
Cash in hand and cash equivalents
IV - Total cash and cash equivalents
1,771
2,822
(1,051)
73
1,548
172
0
0
429
7
17
(10)
4,373
(2,920)
4
0
168
0
30
57
(27)
13
(10)
4,560
(3,129)
0
0
0
50
(31)
13
(11)
Short-term financial assets
Shareholdings in subsidiaries
Shareholdings in affiliated companies
Other shareholdings
Tresury stock
Other securities
Total short-term financial assets
- financial assets write-down fund
III - Short-term financial assets
Buongiorno Vitaminic S.p.A.
2,073
1,432
183
640
114
4,990
528
988
10,948
52
(34)
Debtors
Trade debtors
Subsidiaries
Affiliated companies
Parent companies
Other companies
Total debtors
- Fund for bad debt
II - Total net debtors
TOTAL ASSETS
0
0
Inventories
Raw materials, supplies and merchandise
Work in process, semi-finished goods and compon.
Contract work in process
Finished goods and merchandise
Advances
Total inventories
- Inventory write-down fund
- Total net inventories
30.06.2003
0
0
0
TOTAL FIXED ASSETS
1)
2)
3)
4)
5)
1)
2)
3)
4)
5)
Net intangible fixed assets
Start-up and expansion costs
R&D and advertising
Patents and intellectual property rights
Concessions, licenses, trademarks and similar rights
Goodwill
Consolidation difference
Work in process and advances to suppliers
Other fixed assets
- Total intangible fixed assets
31.12.2003
0
255
3
207
45
0
469
0
44
425
517
0
0
517
0
0
601
0
0
685
0
0
772
13,000
15,007
16,504
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
20,612
614
30
0
512
21,768
0
21,768
20,636
1,397
36
0
632
22,701
0
22,701
18,831
1,792
30
0
2,865
23,518
0
23,518
0
0
0
0
4
4
0
4
0
0
0
0
12
12
0
12
0
0
0
0
266
266
0
266
7,513
15
1
7,529
1,625
19
3
1,647
2,448
15
8
2,471
29,301
24,360
26,255
1,389
883
1,415
43,690
40,250
44,174
Page 36
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock Euro 18,935,354
Registered office: Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
CONSOLIDATED BALANCE SHEET - LIABILITIES
1)
2)
3)
4)
5)
6)
7)
8)
9)
30.06.2004
18,935
10,508
0
0
0
0
622
(16,119)
(2,294)
17,605
7,795
0
0
0
0
8,808
(17,366)
(11,022)
17,481
7,712
0
0
0
0
(8,789)
0
(6,382)
TOTAL CAPITAL AND RESERVES OF THE GROUP
11,652
5,820
10,022
(28)
(20)
(251)
11,624
5,800
9,771
0
0
795
0
0
1,420
0
0
1,519
TOTAL CAPITAL AND RESERVES
a
b
Funds for risks and charges
for pensions and similar rights
for deferred taxes and sanctions
for other risks
-Exchange risk coverage
-Legal practises
c
d
-Product guarantees
-Other
1)
2)
3)
30.06.2003
Capital and Reserves
Share capital
Share premium account
Revaluation reserve
Legal reserve
Reserve for treasury stock
Statutory reserve
Total other reserves
Reserve and profit (loss) carried forward
Profit (loss) for the period
MINORITY INTERESTS
A)
31.12.2003
0
40
0
755
0
40
0
1,380
0
40
0
1,479
B)
TOTAL FUNDS FOR RISKS AND CHARGES
795
1,420
1,519
C)
SEVERANCE INDEMNITY FUND
917
849
725
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)
Creditors
Bonds
Convertible bonds
Banks
Financial payables
Payments on account
Trade creditors
Securities
Subsidiaries
Affiliated companies
Parent companies
Taxes payable
Providence and social security charges
Other creditors
0
0
3,040
1,500
63
19,678
0
33
0
0
2,238
688
1,300
0
0
4,670
1,500
27
19,842
0
762
61
0
1,883
838
1,692
0
0
5,351
745
93
18,917
0
1,351
101
0
1,382
915
1,539
D)
TOTAL CREDITORS
28,540
31,275
30,394
E)
ACCRUED EXPENSES AND DEFERRED INCOME
1,814
906
1,765
43,690
40,250
44,174
TOTAL LIABILITIES
(A+B+C+D+E)
MEMORANDUM ACCOUNTS
1)
Commitments to Leasing companies
0
0
0
2)
Mortgage guarantee
0
0
0
3)
Guranteees for L/C import
0
0
0
4)
Sureties
480
280
699
5)
Our goods deposited with third parties
TOTAL MEMORANDUM ACCOUNTS
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
0
0
0
480
280
699
Page 37
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock Euro 18,935,354
Registered office: Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
First Half 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
A)
VALUE OF PRODUCTION
1)
Sales and services revenues
Year 2003
First Half 2003
35,341
52,672
25,113
- Allowances and discounts to customers
0
0
0
2)
Change in inventory of finished goods
0
0
0
3)
Change in contract work in process
0
0
0
4)
Increases in fixed assets for internal work
623
1,368
430
5)
Other income and revenues
407
1,336
637
36,371
55,376
26,180
32
145
127
24,871
36,892
17,445
857
1,865
958
TOTAL VALUE OF PRODUCTION (A)
B)
COSTS OF PRODUCTION
6)
Raw materials, supplies, consumables and goods
7)
Services
8)
Use of third-party assets
9)
Personnel costs
a
Wages and salaries
6,371
12,366
6,497
b
Welfare contributions
1,616
3,167
1,718
c
Severance indemnity fund
180
338
153
d
Pensions and similar rights
0
0
0
e
Other personnel costs
32
81
27
8,199
Total personnel costs
10)
8,395
3,129
6,066
2,697
259
578
297
Other fixed assets write-downs
80
286
206
Bad debts and cash
91
838
a
Amortization of intangible fixed assets
b
Depreciation of tangible fixed assets
c
d
Total amortization, depreciation and write-downs
11)
15,952
Amortization, depreciation and write-downs
Changes in stock of raw materials,
819
3,559
7,768
4,019
0
5
5
supplies, consumables and goods
12)
Provision for risks
13)
Other provisions
14)
Other operating expenses
TOTAL COSTS OF PRODUCTION
(B)
DIFFERENCE BETWEEN VALUE AND COSTS OF PRODUCTION (A-B)
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
97
14
0
0
135
171
314
708
242
37,929
63,484
31,362
(1,558)
(8,108)
(5,182)
Page 38
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock Euro 18,935,354
Registered office: Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
First Half 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
C)
Year 2003
First Half 2003
FINANCIAL EARNINGS AND CHARGES
15)
Earnings from shareholdings
a
Earnings from shareholdings in subsidiaries and affiliated companies
0
b
Earnings from other companies
0
Total earnings from shareholdings
16)
Other financial earnings
a
from debtors entered in shareholdings
0
0
0
b
from securities entered in fixed assets that
0
0
0
1
64
0
171
172
557
are not shareholdings
c
from securities entered in current assets that
are not shareholdings
d
Interest and other financial earnings
e
Exchange gains
f
Other earnings
172
Total other earnings
17)
236
557
Interest and other financial charges
a
Interest to subsidiaries and affiliated companies
0
0
0
b
Interest to parent companies
(1)
0
0
c
Interest to other companies
d
Interest and other financial charges
e
Exchange losses
f
(24)
(5)
(1)
(348)
(954)
(957)
Other financial charges
Total interest and other financial charges
TOTAL FINANCIAL EARNINGS AND (CHARGES)
D)
(C)
(373)
(959)
(958)
(201)
(723)
(401)
ADJUSTMENTS OF FINANCIAL ASSETS VALUE
18)
Revaluations:
a
Of shareholdings
0
135
135
b
Of investments that
0
0
0
0
0
0
are not shareholdings
c
Of securities entered in current assets that
are not shareholdings
0
Total revaluations
19)
135
135
Write-downs
a
Of shareholdings
b
Of investments that
(120)
(642)
(134)
0
0
0
0
0
0
are not shareholdings
c
Of securities entered in current assets that
are not shareholdings
E)
Total write-downs
(120)
(642)
TOTAL ADJUSTMENTS OF FINANCIAL ASSETS VALUE (D)
(120)
(507)
(134)
1
EXCEPTIONAL EARNINGS (CHARGES)
20)
Exceptional earnings:
a
Gains
b
Contingent assets
c
Other earnings
1
50
0
487
1,577
918
43
21)
66
531
Total exceptional earnings
38
1,693
956
Exceptional charges:
a
Losses
0
(279)
(103)
b
Contingent liabilities
(486)
(1,743)
(634)
c
Other charges
(468)
Total exceptional charges
TOTAL EXCEPTIONAL EARNINGS (CHARGES)
(E)
PROFIT (LOSS) BEFORE TAXES (A-B+C+D+E)
23)
Income taxes
26)
CONSOLIDATED PROFIT (LOSS) FOR THE PERIOD
PROFIT (LOSS) FOR THE PERIOD ATTRIBUTABLE TO MINORITY INTERESTS
PROFIT (LOSS) FOR THE YEAR ATTRIBUTABLE TO THE GROUP
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
(1,051)
(909)
(954)
(3,073)
(1,646)
(423)
(1,380)
(690)
(2,302)
(10,718)
(6,272)
0
(333)
(154)
(2,302)
(11,051)
(6,426)
(8)
(29)
(44)
(2,294)
(11,022)
(6,382)
Page 39
BUONGIORNO VITAMINIC S.p.A.
Registered office: B.go Masnovo, 2 – Parma (Italy)
Wholly paid-up capital stock Euro 18,935,354
Parma Register of Companies No. 02699820045
Tax code 02699820045
Vat Code 07863930017
Parma Index R.E.A. No. 225247
NOTES ON THE FINANCIAL STATEMENTS
General principles followed in drawing up the consolidated half-year report
General principles followed in drawing up the consolidated half-year report
These consolidated half-year financial statements include the Balance Sheet, the Profit and Loss Account, and the
notes on the financial statements, and were drawn up in accordance with the provisions of the Italian Civil Code, as
introduced by Legislative Decree 127/91, and with CONSOB regulation No. 11971 of May 14, 1999, as amended
by Resolution No. 12475 of April 6, 2000.
Figures are expressed in thousands of euro and any other units are specifically indicated.
The Financial Statements as indicated above refer to the figures from the Consolidated Financial Statements of
Buongiorno Vitaminic S.p.A. at June 30, 2004, at December 31, 2003 and at June 30, 2003; the figures for FY
2003 are the ones resulting from the merger of the companies Vitaminic S.p.A. and Buongiorno S.p.A. on July 16,
2003, with statutory and fiscal effects commencing as of January 1, 2003.
The evaluation criteria adopted to draw up the Consolidated Financial Statements do not diverge from the ones
used to draw up the 2003 Consolidated Financial Statements. They comply with Italian laws on Consolidated
Financial Statements and accounting principles recommended by the National Councils of Accountants, in particular
from Document No. 30 for interim reports.
Consolidation Area
Consolidation Area
The table below lists the companies included in the consolidation area. As can be noted, several changes have
arisen in the consolidation area with respect to December 31, 2003 due to the transfer or liquidation of nonstrategic shareholdings, in keeping with the Group’s plan to focus on the markets of Western Europe, as well as the
opening of the Mexican company MyAlert S. de R.L. de CV.
In keeping with the representation of the Financial Statements for the year 2003, the companies of the former
Vitaminic Group that ceased operations as of December 31, 2002 were also excluded from the consolidation area.
The companies in the Buongiorno Vitaminic Group that were part of the consolidation area at June 30, 2004 are
listed in the table below (the percentage of the each holding is also listed):
Company name
Registered office 6/30/2004
Buongiorno.at email services GmbH
Buongiorno Deutschland GmbH
Buongiorno France S.a.r.l.
MyAlertcom S.a.
Buongiorno.uk Ltd
Peoplesound.com Ltd
Vitaminic Ltd
Quantum Gap S.l.
Vienna
Berlin
Paris
Madrid
London
London
London
Madrid
100%
100%
97.96%
99.91%
99.55%
100%
100%
100%
12/31/2003
6/30/2003
100%
100%
97.96%
99.91%
99.55%
100%
100%
100%
90%
100%
97.9%
99.9%
99.5%
100%
100%
100%
The companies in the Buongiorno Vitaminic Group that were not part of the consolidation area at June 30, 2004
and that will be part of the corporate streamlining and simplification process (with the exception of the Mexican
company, which was not included in the consolidation area since it was started up at the end of June and its
volume of business is not significant yet) are reported in terms of shareholding percentages in the following table:
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 40
Company name
Skala Soft EOOD (*)
Eurekan Multimedia S.a.
Peoplesound.fr Eurl (**)
Peoplesound.de GmbH (**)
Vitaminic S.a.r.l.
Vitaminic S.l.
MyAlert S. de R.L. CV(***)
Vitaminic GmbH
Vitaminic B.V.
Registered office
Bulgaria
Paris
Paris
Munich
Paris
Madrid
Mexico City
Hamburg
Amsterdam
6/30/2004
12/31/2003
6/30/2003
100%
100%
100%
100%
100%
100%
99%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(*) Skala Soft EOOD was sold through a management buyout and this transaction was finalized in August 2004. The stake was held directly by
MyAlertcom S.A.
(**) 100% held by Peoplesound.com Ltd.
(***) Company under Mexican law established in June 2004, held 99% by Buongiorno Vitaminic S.p.A. and 1% by MyAlertcom S.A.
Consolidation principles
The Group’s half-year consolidated Financial Statements were drawn up in compliance with the following principles:
- line-by-line consolidation of entries of the Balance Sheets and Profit and Loss Accounts of companies included in
the consolidation area;
- elimination of the net accounting value of shareholdings in consolidated companies against the corresponding
fractional portion of subsidiaries’ equity;
- elimination of equity and economic relations among consolidated companies;
- elimination of any profit and loss generated by operations among consolidated companies that at period-end were
not generated by operations with third parties;
- conversion of the Balance Sheets of foreign subsidiaries whose currency has no fixed parity with the euro
(Vitaminic Ltd., Peoplesound.com Ltd, Buongiorno.uk LTD) at period-end exchange rates. The Profit and Loss
Accounts were converted at the average exchange rate for the period. Any conversion difference is entered
directly as an increase or decrease in the “Exchange reserve”, included in the consolidated reserves under item
“Other reserves”.
Evaluation criteria
The main evaluation criteria used to draw up the consolidated Half-Year Report, pursuant to Article 2426 of the
Italian Civil Code and further recalled by Article 35 of Legislative Decree No. 127/1997 are as follows:
Intangible fixed assets
Intangible fixed assets have been entered at purchase or production cost, including accessory charges, and they
have been amortized based on their potential residual use.
Start-up and expansion costs are amortized over a five-year period.
The costs borne for the creation and registration of trademarks are amortized at a fixed percentage over a period of
ten years.
Consolidation differences arising from the higher value of shareholdings with respect to the subsidiary’s share of
capital and reserves at the time it was taken over are amortized over a five-year period.
Other intangible fixed assets are amortized over a five-year period, with the exception of software, which is
amortized at an annual allowance of 33.33% due to its faster technical and economic obsolescence.
Extraordinary maintenance and improvements made on third-party assets are amortized based on the duration of
the contracts.
Tangible fixed assets
Tangible fixed assets were entered at purchase or production cost, inclusive of accessory charges.
Depreciation was calculated at fixed percentages based on the technical and economic rates established in
accordance with the possible residual use of the assets.
Depreciation goes into effect as of the year in which use of the asset begins. For the year of purchase or
production, the applied rates are reduced by 50%.
Costs for ordinary maintenance are entered fully on the profit and loss account; any such costs that increase the life
of the asset to which they refer are attributed at increasing rates for the cost of the assets and are depreciated in
relation to possible residual use.
It must also be noted that during the period, there were no write-ups of the assets, nor were any financial charges
capitalized to increase their value.
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 41
The annual depreciation rates that were used are detailed below:
Plant and machinery
Rate
10%
Industrial and commercial equipment
15%
Other assets:
- Furnishings and ordinary office equipment
12%
- Electrical and electronic office equipment
20%
- Assets with a unit value of less than ITL1 million
100%
Net investments
This account shows the non-controlling interests held by the Parent Company or by other Group companies, as well
as investments in unconsolidated subsidiaries.
Shareholdings in affiliated companies were evaluated using the equity method, whereas those in other companies
held by the Parent Company have been evaluated at cost, and write-downs were taken only in the event of losses
that are considered permanent and long-term.
Investments in subsidiaries excluded from the consolidation area have been measured using the equity method.
Inventories
Inventories were evaluated at the lesser value between purchase or production cost, and the value assumed based
on market trends.
Debtors and creditors
Debtors are entered based on presumable break-up value, done via entry in a write-down fund to lower their
nominal value. Creditors are entered at their nominal value.
Financial assets that are not fixed assets
Financial assets intended for short-term use are entered under current assets and evaluated at either
purchase/subscription cost or the value assumed based on market trends, whichever of the two is lower.
Accruals and deferrals
Accruals and deferrals include shares of costs and income for the period that accrue in two or more periods to
comply with the accrual principle.
Funds for risks and charges
These were allocated to cover specific losses or charges that are certain or likely but whose amount or occurrence
was still undetermined at period end. The allocations were made respecting the general accruals and prudence
concepts, and they reflect the best possible estimate based on the elements that were available.
Severance indemnity fund
This was allocated as required by law and by the labor contracts in force, and reflects the liabilities that have fallen
due to employees of the Parent Company at period-end, net of any advances that were disbursed.
Acknowledgement of income and costs
Income and costs are recorded in accordance with the principle of prudence and the accruals concept, and are net
of returns, discounts, rebates and premiums.
In particular, income and costs have been recorded as follows:
•
•
Advertising income and costs: these have been posted to the Profit and Loss Account in accordance with the
underlying contract, based on the accruals concept (as regards length of contract) or on the actual number of
advertising campaigns that took place in the year;
Income and costs for Business Services: these are shown in the Profit and Loss Account in relation to
underlying contracts;
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 42
•
Income and costs for Consumer Services: these are shown in the Profit and Loss Account based on the actual
number of contacts made by the end user and/or on the actual telephone traffic generated.
Conversion criteria for entries in other currencies
Debtors and creditors expressed in foreign currency were initially converted into euro at contractual exchange rates
or the rates in force at the time of the individual transactions. The exchange differences that arose when debtors
were collected and creditors were paid in foreign currency are entered in the Profit and Loss Account.
Losses or profits on entries in currencies that are not part of the European Monetary Union and that arise from the
adjustment to the precise exchange rates at the end of June are reflected in the Profit and Loss Account for the
year.
Financial earnings and charges
These have been recorded in the accounts based on the principles of accruals-basis accounting.
Exceptional earnings and charges
These include non-operating and other exceptional earnings and charges resulting from events outside of the
normal operations or positive and negative components of income related to previous periods.
Current and deferred taxes
With reference to the period being examined, taxes were not allocated in observance of the provisions of Art. 81,
paragraph 7, of the regulations implementing Legislative Decree No. 58 of February 24, 1998 regarding the
regulations of issuers adopted by CONSOB with Resolution No. 11971 of May 14, 1999, as amended.
Where applicable, deferred taxes were calculated for the main temporary and taxable differences arising from the
differences between the book value of consolidated balance-sheet assets and liabilities and the values for tax
purposes. Any benefits for tax losses that can be carried forward to subsequent periods were not entered on the
Balance Sheet as a prudential measure.
Guarantees, endorsements and risks
Guarantees and sureties granted or received are expressed in the memorandum accounts at their nominal value.
Other information
Pursuant to Art. 2428 of the Italian Civil Code, as well as Art. 40 of Legislative Decree 127/1991, we hereby specify
that:
- the Parent Company, Buongiorno Vitaminic S.p.A., is not, in turn, controlled by other companies;
- no subsidiaries hold shares in the Parent Company, either directly or through trust companies or other
intermediaries;
- the Parent Company does not hold its own shares, either directly or through intermediaries.
Furthermore, in line with the recommendations issued by the Committee of European Securities Regulators (CESR),
below is a brief explanation of how Buongiorno Vitaminic has dealt with the transition to IAS/IFRS, which is expected
to be quite a challenge given the nature of the Company and the primary differences between current Italian
standards and the international accounting standards to be adopted in 2005.
As specified in European Regulation (EC) 1606/2002, as of 2005 all listed European companies will be required to
adopt IAS/IFRS in the preparation of consolidated financial statements. This obligation will most likely be extended to
company financial statements for listed companies.
This is a significant event for the European economic environment as these standards present significant differences
from standards commonly adopted throughout Europe, including the Italian standards currently adopted in the
preparation of Buongiorno Vitaminic financial statements.
We are currently identifying the key differences; however, there are a number of standards which are still only
available in draft form or which have not yet been fully endorsed in accordance with the regulation mentioned above.
This project is expected to be completed by the end of 2004, and involves the following activities:
1. In-depth analysis of the impact and assessment of both the alternatives available for each of the standards
and the options related to IFRS 1 for the transition phase
2. Preparation of the necessary models and of what-if scenarios so as to be in a position to make informed
decisions
3. Preparation of an IFRS Balance Sheet for December 31, 2003, which will be used for the opening balances
for the preparation of the first real IFRS financial statements
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 43
4. Analysis of the impact on the release of information
5. Preparation of quarterly reports for 2004 to be used for comparison in 2005
Below is a list of the most significant areas of difference between IAS/IFRS and the Italian accounting standards
used thus far by the company in the preparation of the consolidated financial statements:
•
•
•
•
Intangible fixed assets
Net investments
Severance indemnities
Treatment of non-recurring items
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 44
NOTES ON THE ASSET ITEMS OF THE CONSOLIDATED BALANCE SHEET
(B) FIXED ASSETS
I. Intangible fixed assets
The net values of intangible fixed assets are as follows:
(in thousands of Euro)
12/31/2003
Start-up and expansion costs
R&D and advertising
Patents and intellectual property
rights
Concessions, licenses, trademarks
and similar rights
Goodwill
Consolidation difference
Work in process and advances to
suppliers
Other intangible assets
Total
Increases
Depreciation
1,803
1,280
132
535
244
112
(299)
(472)
(47)
681
19
(60)
227
6,567
409
557
(114)
(1,63)
-
1.675
12,776
2
1,469
(574)
(3,129)
Change in
consolidation
area
Write-downs
and other
movements
6/30/2004
34
379
(11)
2,073
1,432
183
-
640
(14)
(438)
114
4,990
528
(3)
(19)
(113)
(149)
988
10,948
(2)
“Start-up and expansion costs” rose due to the effect of bank brokerage fees for the two capital increases, totaling
approximately Euro 500 thousand; the remaining portion of the increase is due to costs borne to complete the
merger process.
“Research and development costs” take into account the investments made in technological updates and
innovations for the multi-channel platform for transmitting digital content.
The increases in “Works in process and advances to suppliers” refer essentially to costs borne for R&D projects that
had not yet been started up at the closing date of the accounts (e.g. the CRM project in the area of advertising
customers, and the projects to develop the technological platform by in-house personnel).
The item “Consolidation differences” can be attributed to the takeovers of subsidiary Peoplesound.com Ltd. (whose
residual value at June 30, 2004 was Euro 2,483 thousand) and of the MyAlertcom S.A. Group (whose aggregate
residual value at June 30, 2004 was Euro 2,507 thousand).
The column “Write-downs and other movements” includes reclassification of the works in process that started to
generate their economic utility during the period, as well as any write-downs or divestments of assets that are no
longer utilized.
II. Tangible fixed assets
Below is a description of the changes to tangible fixed assets in terms of historical cost, depreciation, and net value.
Historical cost
(in thousands of Euro)
Plant and machinery
Industrial and commercial equipment
Other fixed assets
Work in process
Total fixed assets
Depreciation fund
52
13
4,560
4,625
Net value
6/30/2004
(34)
(11)
(3,129)
(3,174)
Net Value
12/31/2003
18
2
1,431
1,451
18
3
1,453
73
1,547
Plant and machinery
This item includes telephone and electrical systems.
The following changes took place during the six-month period:
Historical cost
(in thousands of Euro)
December 31, 2003
Increases
Decreases
Depreciation
June 30, 2004
Buongiorno Vitaminic S.p.A.
Depreciation fund
49
3
52
Half-Year Rport as of June 30, 2004
Net valueV
(31)
18
3
(3)
(34)
(3)
18
Page 45
Industrial and commercial equipment
The following changes took place during the six-month period:
Historical cost
(in thousands of Euro)
December 31, 2003
Increases
Decreases
Depreciation
June 30, 2004
Depreciation fund
13
-
Net value
(10)
(1)
(11)
13
3
(1)
2
Other fixed assets
This item includes furnishings, office machinery and computers.
Movements during the period were as follows:
December 31, 2003
Increases
Decreases
Changes in consolidation area and other changes
Depreciation
June 30, 2004
Historical cost
4,372
145
43
4,560
Depreciation fund
(2,920)
4
(214)
3,129
Net value
1,453
145
47
(214)
1,431
III. Net investments
1) Shareholdings
This item groups minority shareholdings pertaining to the Parent Company or to other Group companies, as well as
the shareholdings that have not been consolidated because they pertain to companies for which the liquidation
process is in an advanced phase, or companies whose values in the accounts are currently irrelevant and are thus
not listed.
At June 30, 2004 the unconsolidated subsidiaries whose net shareholding value is zero were Vitaminic S.a.r.l.,
Peoplesound.fr Eurl and Eurekan Multimedia S.A. in France; Vitaminic BV in the Netherlands; Peoplesound.de
GmbH in Germany; Vitaminic S.L. in Spain.
The tables below lists the gross book value of the shareholdings, the write-downs that were taken, and the net value
posted in the Financial Statements:
Company
Held by
Shareholding
value
Write-down
Balance
MyAlert Portal S.l.
MyAlertcom S.a.
3
-
3
MyAlert S. de R.L. CV
Buongiorno Vitaminic S.p.A.
1
-
1
4
-
4
Total shareholdings in subsidiaries
Other shareholdings
World Investment Partners (WIP)
Buongiorno Vitaminic S.p.A.
168
-
168
Profero S.r.l.
Buongiorno Vitaminic S.p.A.
9
(9)
-
Future 121 OY
MyAlertcom S.a.
36
(36)
-
Total shareholdings in other companies
213
(45)
168
TOTAL SHAREHOLDINGS
217
(45)
172
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 46
The entire shareholding in Digibrands S.p.A. was transferred at the end of May to the Luxembourg company World
Investment Partners (WIP), the leading business of the Allaxia Group, which offers integrated solutions for public and
private organizations in social research, marketing and consulting. Payment was handled via an exchange of stock.
Buongiorno Vitaminic S.p.A. currently holds 1.13% of WIP’s capital.
Two other minority shareholdings (Profero S.r.l. and Future 121 OY) were definitively written down by canceling the
value of the shareholding as a result of long-term losses of value that brought down the value of their capital and
reserves.
2) Debtors
a) Subsidiaries
At June 30, 2004 there were no receivables from subsidiaries.
b) Affiliated companies
At June 30, 2004 there were no receivables from affiliated companies.
c) Other companies
Financial receivables totaled Euro 429 thousand and include amounts paid as guarantee deposits at the time of
stipulating rental contracts for the offices used by the various companies of the Group.
C) CURRENT ASSETS
II. Debtors
1) Trade debtors
The balance at June 30, 2004 is detailed below:
(in thousands of Euro)
Trade debtors
Fund for bad debts
Total
6/30/2004
21,239
(627)
12/31/2003
21,682
(1,046)
6/30/2003
20,223
(1,392)
20,612
20,636
18,831
The decrease in the value of trade debtors compared to the end of 2003 – despite an increase in turnover – is due
mainly to the following reasons:
- ongoing optimization of the collection process, which has gradually made it possible to improve the
average collection time for invoices;
- improvement in the quality of the customer portfolio (which in turn has also led to a large reduction in
allocations to the fund for bad debts);
- the use of financial instruments to unfreeze receivables.
The fund for bad debts was decided pursuant to specific and timely analysis and is considered to be appropriate to
adjust the debtors based on probable break-up value.
All trade debtors are due within twelve months.
2) Subsidiaries
This item includes amounts due by unconsolidated subsidiaries to the Parent Company Buongiorno Vitaminic S.p.A.
and the subsidiary Peoplesound.com Ltd, which have been taken into consideration when valuating the
shareholdings and the relative fund for risks. At June 30, 2004 receivables totaled Euro 614 thousand, compared to
approximately Euro 1.4 million at December 31, 2003.
(in thousands of Euro)
Vitaminic BV
Vitaminic S.a.r.l.
Vitaminic S.l.
Peoplesound.fr
Eurekan Multimedia E.u.r.l.
Vitaminic A.S.
Vitaminic GmbH
Vitaminic Sverige A.B.
Vitaminic USA Inc.
Total debtors – Parent Company
Peoplesound.fr (to Peoplesound.com Ltd.)
Total debtors Group
Buongiorno Vitaminic S.p.A.
6/30/2004
34
55
51
55
25
-
12/31/2003
318
172
51
10
219
252
-
03/30/2003
318
364
353
219
247
291
220
394
614
1,022
375
1,397
1,792
1,792
Half-Year Rport as of June 30, 2004
Page 47
3) Affiliated companies
This item is composed of receivables owed to MyAlertcom S.A. by two companies that, in terms of the
organizational and management plan, are part of the Iberia division.
(in thousands of Euro)
Vitaminic S.l.
Digibrands S.p.A.
MyAlert S. de R.L. de CV
Group total
6/30/2004
28
2
30
12/31/2003
36
36
6/30/2003
30
30
5) Other debtors
This item is composed as follows:
(in thousands of Euro)
VAT credit
Credit from the State Treasury
Trade debtors for advances
Other debtors
Total
6/30/2004
14
108
2
387
512
12/31/2003
39
110
26
458
633
6/30/2003
2,005
338
75
447
2,865
Under the item “Other debtors”, the decrease with respect to December 31, 2003 is due mainly to “Other”, and in
particular to the collection of contributions for the EU project “eContent” – completed at the end of the year and
definitively approved by the European Commission in April 2004 – for which Buongiorno Vitaminic acted as Project
Coordinator. At June 30, 2004 the outstanding amount due from the European Commission was approximately Euro
154 thousand. Inversely, there was a net decrease in VAT credits as a result of the increase in turnover and in the
collection of VAT refunds accrued in previous periods.
III. Financial assets that are not fixed assets
5) Other securities
This item totals approximately Euro 4 thousand.
Cash and cash equivalents
At June 30, 2003, this item totaled Euro 7,529 thousand and was divided as follows:
(in thousands of Euro)
Bank and postal accounts
Checks
Cash in hand and cash
equivalents
Total
6/30/2004
7,513
15
1
12/31/2003
1,625
19
3
6/30/2003
2,448
15
8
7,529
1,647
2,471
Investment flows relating to the period are shown in the cash flow statement (Annex B).
D) ACCRUED INCOME AND PREPAYMENTS
2) Other accrued income and prepayments
This item is made up as follows:
(in thousands of Euro)
Accrued income
Prepayments
Total
6/30/2004
315
1,074
1,389
12/31/2003
326
557
883
6/30/2003
652
763
1,415
The change in accrued income compared to the same period last year is due mainly to a decrease, in terms of both
number and volume, in advertising campaigns and business services still underway at the end of the reference
period.
Prepayments refer mainly to operating costs and rent. The significant increase here can be attributed to the
contractual terms for content offered by the Majors, which required payment of guaranteed minimums as well as
advance payment for the licensing they offer.
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 48
NOTES ON THE LIABILITY ITEMS OF THE CONSOLIDATED BALANCE SHEET
A) CAPITAL AND RESERVES
Annex B details the reconciliation between the capital and reserves item and the results of Buongiorno Vitaminic
S.p.A. with the same items for the Group, while the variations for the items composing the consolidated capital and
reserves are shown in Annex C.
I. Share capital
During the first half of 2004, the share capital of Buongiorno Vitaminic S.p.A. rose from Euro 17,605,190 to Euro
18,935,354 as a result of:
capital increase of Euro 1,297,855;
capital increase for the stock option plan in the amount of Euro 32,309;
IX. Consolidated loss for the period
This item includes the loss of the Buongiorno Vitaminic Group for the period of Euro 2,294 thousand.
Since Buongiorno Vitaminic S.p.A. does not fully control some of its subsidiaries, there are shares of the income
(loss) for the period and of capital and reserves at June 30, 2004 that total approximately Euro 28 thousand and
pertain to minority interests.
(in thousands of Euro)
Capital and reserves of Parent
Company
Capital and reserves of
Minority Interests
Total capital and reserves
6/30/2004
11,652
12/31/2003
5,820
6/30/2003
10,022
(28)
(20)
(251)
11,624
5,800
9,771
B) FUNDS FOR RISKS AND CHARGES
Funds for risks and charges include: the funds for restructuring charges, the funds covering losses of
unconsolidated subsidiaries, the funds to cover future costs or losses arising from operations, and the funds for
legal practices or commercially-related contractual risks.
The variation with respect to previous periods is due mainly to the partial use of funds to cover losses of
unconsolidated companies to compensate for negative capital and reserves following their liquidation and closing,
as set forth in the table below:
(in thousands of Euro)
Funds for legal practices
Other funds
Total funds for risks and charges
6/30/2004
40
755
795
12/31/2003
40
1,380
1,420
6/30/2003
40
1,479
1,519
”Other funds” of Euro 755 thousand are composed as follows:
approximately Euro 514 thousand for the fund for write-downs on shareholdings, entered to cover the
negative capital and reserves of companies not included in the consolidation area, of which Euro 120 thousand for
the subsidiaries of the Parent Company and Euro 394 thousand for the subsidiaries of Peoplesound.com LTD;
Euro 102 thousand for the restructuring fund to cover restructuring activities already approved during the
previous period but accruing in this period and subsequent periods;
other funds, in the amount of Euro 139 thousand, to cover future costs or losses resulting from operations.
C) SEVERANCE INDEMNITIES
The severance indemnity fund shows the actual amount due by the Parent Company for severance indemnities at
June 30, 2004 for the employees on the payroll at that time, net of advances paid and payments following the
departure of personnel.
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 49
Movements during the period were as follows:
(in thousands of Euro)
Severance indemnity fund at December 31, 2003
Allocations
Payments
849
180
(112)
Severance indemnity fund at June 30, 2004
917
D) CREDITORS
At June 30, 2004, there were no amounts falling due after more than one year, nor any borrowing secured by
collateral (“real securities”).
3) Banks
Amounts due to banks totaled Euro 3,040 thousand, reflecting a decrease compared to the figure of Euro 4,670
thousand at December 31, 2003.
Investment flows relating to the first half of 2004 are detailed and commented upon in the cash flow statement
(Annex A).
4) Other financial institutions
This item includes the interest-bearing medium-term loan issued in 2003, chiefly by shareholders and falling due at
the end of 2004, for a total of Euro 1,500 thousand.
6) Trade creditors
Trade creditors at the end of the period mainly involve content-production services, rebates to telephone and media
operators on revenues from telephone traffic, and advertising and promotion of Consumer Services. All these trade
creditors are due within twelve months.
At June 30, 2004, trade creditors totaled Euro 19,678 thousand, declining slightly compared to December 31,
2003.
(in thousands of Euro)
Trade creditors
6/30/2004
19,678
12/31/2003
19,842
6/30/2003
18,917
8) Subsidiaries
Amounts due to subsidiaries at June 30, 2004, totaling Euro 33 thousand, involve amounts owed by the Parent
Company Buongiorno Vitaminic S.p.A. to companies not included in the consolidation area because they ceased
operations at the beginning of the year.
(in thousands of Euro)
Vitaminic GmbH
Vitaminic S.a.r.l.
Group total
Total creditors
19
14
33
11) Taxes payable
Taxes payable at June 30, 2004 totaled Euro 2,238 thousand, and they can be broken down into Euro 509
thousand in withholding for employees and independent workers, Euro 341 thousand in income taxes (IRAP, the
Regional Business Tax), and Euro 1,388 thousand in VAT.
12) Providence and social security charges
This item refers to contributions that have accrued but have not yet been paid to providence and social security
institutions. At the end of the first half of 2004, these charges were Euro 688 thousand.
13) Other creditors
At June 30, 2004, other creditors totaled Euro 1,300 thousand and can be broken down as follows:
(in thousands of Euro)
Accruals to personnel
Buongiorno Vitaminic S.p.A.
6/30/2004
795
Half-Year Rport as of June 30, 2004
12/31/2003
1,294
6/30/2003
1,044
Page 50
Other
Total
505
398
495
1,300
1,692
1,539
Payables to employees and collaborators are composed of liabilities related to bonuses, paid holidays and leaves that
were not taken, and reimbursement of expenses to staff.
The item “Other creditors” includes those related to EU contributions paid on a quota basis to participants in the
project for which the Parent Company Buongiorno Vitaminic S.p.A. is acting as the Project Coordinator, as well as
creditors for fees to directors and statutory auditors matured in the fiscal year but not yet paid.
E) ACCRUALS AND DEFERRED INCOME
Accruals and deferred income totaled Euro 1,814 thousand at June 30, 2004 and can be broken down as follows:
(in thousands of Euro)
Accruals to personnel
Other
Total
Deferred income
Total
6/30/2004
187
4
191
1,623
1,814
12/31/2003
37
15
52
854
906
6/30/2003
569
251
820
945
1,765
Accruals to personnel include deferred portions of salaries such as the “thirteenth” and the “fourteenth month” of
salary.
Deferred income refers to amounts accruing in the next fiscal periods for advertising campaigns and business
services already invoiced by the Company and which will be completed in 2004, and are recorded based on the
completed percentage of the campaign or service.
SURETYSHIPS AND OTHER GUARANTEES GRANTED
Memorandum accounts include suretyships for a sum total of Euro 480 thousand, for guarantees granted by the
Parent Company Buongiorno Vitaminic SpA to banks for foreign loans issued to subsidiaries in Austria (Euro 80
thousand) and Germany (Euro 400 thousand).
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 51
NOTES ON THE MAIN ITEMS OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT
A) VALUE OF PRODUCTION
1) Sales of goods and services
Breakdown of income for each line of business and for each geographical area is as follows:
Income for each line of business
(in thousands of Euro)
Italy
Europe
Total First Half
2004
Total First Half
2003
Marketing Services
5,318
8,986
14,304
13,334
Consumer Services
6,922
14,115
21,037
11,779
12,240
23,101
35,341
25,113
TOTAL CORE BUSINESS SALES
Marketing services includes the revenues from both advertising and business services. For more information on
sales performance, see section 1.5.1 above. The revenue item relating to “non-monetary transactions” was not
significant during this six-month period.
Value of production can be broken down as follows:
(in thousands of Euro)
Total First Half
2004
Total First Half
2003
35,341
25,113
Increase in fixed assets for internal work
623
430
Other income and revenues
407
637
36,371
26,180
Core business revenues
TOTAL VALUE OF PRODUCTION
Capitalizations refer to internal costs borne for the expansion and further development of management operating
programs, e-mail and SMS transmission services, and the upgrade of the technological platform to meet growing
business needs arising from the rapid growth of the Consumer Services market on both a domestic and
international level.
Notably, the item “Other income and revenues” includes recovery arising from the release of the fund for bad debts,
payment of damages, mistaken estimates of costs for previous periods, and office sublets.
B) COSTS OF PRODUCTION
7) Costs for services
This item can be broken down as follows:
(in thousands of Euro)
Costs of production
Marketing & sales
Overheads and administrative expenses
TOTAL COSTS FOR SERVICES
First Half 2004
17,791
4,343
2,736
24,871
First Half 2003
9,981
3,872
3,592
17,445
Costs of production include bandwidth leasing costs, costs for the purchase of SMS and content, amounts
recognized to list owners and telcos, and technology costs for housing and hosting, royalties and the Majors’ and
the artists’ rights.
Sales and marketing costs include advertising investments for all media channels, marketing consulting,
commissions paid to media centers, and all production costs for marketing initiatives.
Included among the overheads and administrative expenses are expenses for consulting, office expenses,
maintenance costs, insurance expenses, costs for various services, and travel expenses for all employees.
8) Use of third-party assets
Costs related to the use of third-party assets include primarily the rental of office space and operative leasing fees
for the hardware systems used by Group companies.
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 52
9) Personnel costs
This item includes the costs for employees, including provisions required by the law and by collective contracts, as
well as the cost of holidays that had matured but were still unused at June 30, 2004. The staff is distributed as
follows (mean number of employees for the period):
Employees and middle
management
Executives
Total
6/30/2004
279
12/31/2003
240
6/30/2003
235
40
319
37
277
38
273
The increase of 41 employees for the period is due to the constant growth in business requiring additional
personnel, particularly on an international level (Spain, Great Britain and France), as foreign sales now represent over
65% of the total turnover of the Buongiorno Vitaminic Group.
10) Amortization, depreciation and write-downs
(in thousands of Euro)
Amortization of intangible fixed assets
Amortization of tangible fixed assets
Other fixed asset write-downs
Write-downs of bad debt and cash
Total depreciation, amortization and write-downs
First Half 2004
3,129
259
80
91
3,559
First Half 2003
2,697
297
206
819
4,019
Amortization of intangible fixed assets
The allocation for the period (a total of Euro 3,129 thousand) is detailed in the notes on intangible fixed assets.
Depreciation of tangible fixed assets
Depreciation for the period, amounting to Euro 259 thousand was determined using technical and economic rates
established based on possible residual asset use as previously illustrated in the Notes on evaluation criteria for
tangible fixed assets.
Write-downs of intangible fixed assets
The write-down of Euro 80 thousand refers to write-downs on intangible fixed assets (ASP software for managing email services) no longer used by the Group.
Write-down of debtors entered in current assets
This entry corresponds to the allocation of Euro 91 thousand to the write-down fund for bad debts, a measure taken
after specific analysis to adjust the total amount to its probable break-up value. Specifically, adjustment allocations
were made to the accounts receivable of Buongiorno France, for Euro 19 thousand, and of Buongiorno
Deutschland, for Euro 72 thousand.
14) Other operating expenses
Other operating expenses, amounting to Euro 314 thousand, include residual entries of individually non-significant
amounts which could not be included in the other items of section “B – Production Costs”, as well as miscellaneous
costs of operations.
C) FINANCIAL EARNINGS (CHARGES)
16) Other financial earnings
This item is composed as follows:
(in thousands of Euro)
Income from repurchasing agreements
Earned banking interest
Currency exchange differences
Other minor items
Total
Buongiorno Vitaminic S.p.A.
First Half 2004
-
First Half 2003
-
17
154
1
172
81
476
557
Half-Year Rport as of June 30, 2004
Page 53
17) Interest and other financial charges
This item is composed as follows:
(in thousands of Euro)
Interest to others
Interest and banking fees
Currency exchange differences
Other minor items
Total
First Half 2004
74
251
21
27
373
First Half 2003
16
904
39
959
E) EXCEPTIONAL EARNINGS (CHARGES)
20) Earnings
Exceptional earnings amounted to Euro 531 thousand at June 30, 2004, and are detailed as follows:
(in thousands of Euro)
Gains on the transfer of realty
Contingent assets
Other earnings
Total exceptional earnings
First Half 2004
1
487
43
531
First Half 2003
918
38
956
Contingent assets refer mainly to mistaken estimates of revenues and costs for previous periods, or from positive
entries arising from agreements for the settlement of disputes, which varied the costs of services provided in
previous periods.
21) Charges
Exceptional charges amounted to Euro 954 thousand and can be broken down as follows:
(in thousands of Euro)
Losses on the disposal of fixed assets
Contingent liabilities
Other charges
Total exceptional charges
First Half 2004
486
468
954
First Half 2003
103
634
909
1,646
Contingent liabilities include mistaken estimates for revenues and costs from previous periods.
On behalf of the Board of Directors
The Chairman
Mauro Del Rio
Buongiorno Vitaminic S.p.A.
Half-Year Rport as of June 30, 2004
Page 54
Pro forma cash flow statement
(Annex A)
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock 18,935,354
Registered office Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
Consolidated Cash Flow Statement at June 30, 2004
H1 2004
(in thousands of Euro)
Group loss
Amortization, depreciation and write-downs
Intangible assets write-downs
Write-down of non-consolidated shareholdings
Net change in severance indemnity fund
Net change in funds for risks and charges
FY 2003
H1 2003
(2,294)
(11,022)
(6,382)
3,388
6,644
2,994
80
286
309
120
233
-
68
148
24
(626)
(583)
(484)
Minority interests
(8)
(29)
(44)
Other ordinary activities items
-
-
Cash flow from ordinary activities
(Increase) / decrease in trade debtors
Increase / (decrease) in trade creditors
Change in other current assets items
Change in consolidation area
Cash flow from ordinary activities
(A)
-
729
(4,324)
(3,583)
(948)
59
(2,820)
(225)
1,745
860
313
3,412
2,647
53
(634)
(441)
929
(2,621)
(1,467)
(1,385)
(4,889)
(2,645)
(186)
(5)
75
(36)
(243)
(231)
Net investments/disinvestments in:
- intangible fixed assets
- tangible fixed assets
- investments
- change in consolidation area
Cash flow from investing activities
(B)
Cash flow from operating and investing activities (A+B)
Paid capital increases
27
248
151
(1,579)
(4,890)
(2,650)
(650)
(7,511)
(4,117)
8,242
106
-
116
397
32
Other changes in capital and reserves
(224)
(128)
-
Cash flow from financing activities (C)
8,133
374
32
(101)
-
Exchange reserve
Other changes in the equity and financial situation that do not entail cash flows
(D):
Allotment of intangible assets and acquisition of companies through issuing of
stocks
Capital increases through contribution in-kind
Minority interests
Cash flow for the period (A+B+C+D)
Cash and cash equivalents at period start
-
101
-
(8)
188
-
7,476
(6,949)
(4,085)
(4,470)
2,479
2,479
Cash flow for the period
7,476
(6,949)
(4,085)
Cash and cash equivalents at period end
3,006
(4,470)
(1,606)
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 55
(Annex B)
Reconciliation between the Financial Statements of Buongiorno Vitaminic S.p.A. and the Consolidated Financial
Statements: Capital and Reserves, and Consolidated Profit (Loss) of Buongiorno Vitaminic S.p.A. at June 30, 2004
Reconciliation between the Buongiorno SpA FS and the Consolidated FS:
Buongiorno S.p.A. and Consolidated capital and reserves and profit (loss) for the period
(in thousands of Euro)
Capital and reserves
Movements in
Change in
Profit (loss)
Capital and reserves
01/01/04
capital and reserves
consolidation area
for the period
6/30/04
Buongiorno Vitaminic SpA
21,202
Elimination of shareholdings
(15,316)
Goodwill
Other lesser items
Capital and reserves of the Group
Capital and reserves of minority interests
Consolidated capital and reserves
Buongiorno Vitaminic S.p.A.
8,242
(115)
(88)
(2,257)
27,187
(80)
(15,511)
43
(45)
22
5,820
22
8,242
(115)
(20)
5,800
Relazione Semestrale al 30.06.2004
8,242
(115)
(2,294)
11,653
(8)
(28)
(2,302)
11,625
Pag. 56
(Annex C)
Statement of the changes in the items composing the Consolidated Capital and Reserves, and the Net Profit (Loss) of Buongiorno Vitaminic S.p.A. at
June 30, 2004
Statement of changes in consolidated capital and reserves at 6/30/2004
(in thousands of Euro)
DESCRIPTION
Balance at period start
- Allocation of profit (loss) for the period:
Paid-up dividends
Share to the Board of Directors
- Capital increases (decreases):
- Transfer of My Alert stocks to third parties
- Capital increase and Stock Option plan
- change in % held
- Available reserve ex MyAlert stocks
- Exchange differences
- Change in consolidation area
- Other movements due to reclassification
- Profit (loss) for the period
Balance at period end
Buongiorno Vitaminic S.p.A.
Share capital
MOVEMENTS AT 6/30/2004
Profit
Profit
Share
Other
(loss)
(loss)
premium
reserves
reserve
carried forward of the Group
17,605
7,795
(4,198)
1,330
6,912
8,808
(8,071)
(17,366)
1,247
(11,022)
11,022
(16,119)
(2,294)
(2,294)
(116)
18,935
10,508
621
Half-Year Report as of June 30, 2004
Total Group
capital and
reserves
Capital
and reserves
of minority interests
5,820
0
8,242
(116)
(2,294)
11,652
Page 57
Profit
(loss)
of minority interests
9
(29)
(29)
29
(20)
(8)
(8)
Total capital and
reserves of
minority interests
(20)
(8)
(28)
Total consolidated
capital and
reserves
5,800
0
8,242
-116
(2,301)
11,624
2.2 Half-Year Report of the Parent Company (Buongiorno Vitaminic S.p.A.) for the Period Ended June 30, 2004
FINANCIAL STATEMENTS
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock Euro 18,935,354
Registered office: Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
BALANCE SHEET - ASSETS
A)
6/30/2004
CALLED-UP SHARE CAPITAL NOT PAID
Net intangible fixed assets
Start-up and expansion
1)
12/31/2003
6/30/2003
0
0
0
1,788
1,441
37
2)
R&D and advertising
724
389
130
3)
Patents and intellectual property rights
113
43
65
Concessions, licenses, trademarks and similar rights
603
646
690
48
97
145
0
0
0
528
409
1,855
4)
5)
Goodwill
5) bis
Consolidation difference
6)
Work in process and advances to suppliers
7)
Other fixed assets
I - Total intangible fixed assets
338
730
684
4,142
3,755
3,606
Tangible fixed assets
Land and buildings
a
b
2)
0
Costs and possible revaluations
0
Depreciation fund
0
Plant and machinery
a
b
3)
Costs and possible revaluations
41
Depreciation fund
(27)
b
4)
Costs and possible revaluations
Depreciation fund
Depreciation fund
5)
1,883
Work in process and advances to suppliers
II - Total tangible fixed assets
(2)
956
1,724
(908)
4
6
(2)
975
b
(20)
0
2
(2)
Costs and possible revaluations
27
47
(24)
0
Other assets
a
0
15
39
2
0
0
0
14
Industrial and commercial equipment
a
0
0
1,306
1,671
(768)
(365)
0
73
0
989
1,044
1,337
Net investments
1)
Shareholdings
a
Subsidiaries
b
Affiliated companies
c
Other companies
28,075
-Shareholding write-down fund
2)
Subsidiaries
Affiliated companies
d
Other companies
27,423
25,072
27,134
280
0
168
168
9
9
0
0
0
Debtors
a
b
25,249
27,907
1,217
1,224
2,122
1,145
1,110
2,030
0
44
0
72
70
92
3)
Other securities
0
0
4)
Treasury stock
0
0
0
29,292
26,473
29,545
34,423
31,272
34,488
III - Total investments
B)
TOTAL FIXED ASSETS
0
Inventories
1)
2)
Raw materials, supplies and merchandise
0
0
0
Work in process, semifinished goods and compon.
0
0
0
3)
Contract work in process
0
0
0
4)
Finished goods and merchandise
0
0
0
5)
Advances
0
0
0
Total inventories
0
0
0
- Inventory write-down fund
0
0
0
0
0
0
I - Total net inventories
Debtors
1)
Trade debtors
7,820
9,428
9,928
2)
Subsidiaries
4,684
7,581
9,801
3)
Affiliated companies
0
36
30
4)
Parent companies
0
0
0
5)
Other companies
395
487
2,501
Total debtors
12,899
- Fund for bad debt
II - Total net debtors
17,532
22,260
0
0
0
12,899
17,532
22,260
0
Short-term financial assets
1)
Shareholdings in subsidiaries
0
0
2)
Shareholdings in affiliated companies
0
0
0
3)
Other shareholdings
0
0
0
4)
Treasury stock
0
0
0
5)
Other securities
0
2
0
Total short-term financial assets
0
2
0
- Financial assets write-down fund
0
0
0
0
2
0
III - Net short-term financial assets
Cash and cash equivalents
1)
Banks and postal accounts
5,232
667
1,108
2)
Cheques
0
9
0
3)
Cash in hand and cash equivalents
0
0
1
5,232
676
1,109
18,131
18,210
23,369
782
654
847
53,336
50,136
58,704
IV - Total cash and cash equivalents
C)
TOTAL CURRENT ASSETS
D)
PREPAYMENTS AND ACCRUED INCOME
TOTAL ASSETS
Buongiorno Vitaminic S.p.A.
(A+B+C+D)
Half-Year Report as of June 30, 2004
Page 58
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock Euro 18,935,354
Registered office: Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
BALANCE SHEET - LIABILITIES
30.06.2004
31.12.2003
30.06.2003
Capital and reserves
1)
Share capital
18,935
17,605
17,481
2)
Share premium account
10,508
7,795
7,712
3)
Revaluation reserves
0
0
0
4)
Legal reserve
0
0
0
5)
Reserve for treasury stock
0
0
0
6)
Statutory reserve
0
0
0
7)
Total other reserves
0
8,071
8,071
8)
Reserve and profit (loss) carried forward
9)
Profit / (loss) for the period
TOTAL CAPITAL AND RESERVES
0
0
0
(2,257)
(12,269)
(5,975)
27,186
21,202
27,289
0
0
0
27,186
21,202
27,289
0
MINORITY INTERESTS
A)
TOTAL CAPITAL AND RESERVES
1)
for pensions and similar rights
0
0
2)
for deferred taxes and sanctions
0
0
0
3)
for other risks
4,179
4,914
4,970
Funds for risks and charges
a
-Exchange risk coverage
b
-Legal practices
c
-Product guarantees
d
-Other
B)
TOTAL FUNDS FOR RISKS AND CHARGES
C)
SEVERANCE INDEMNITY FUND
0
0
0
40
40
40
0
0
0
4,139
4,874
4,930
4,179
4,914
4,970
913
845
725
0
Creditors
1)
Bonds
0
0
2)
Convertible bonds
0
0
0
3)
Banks
1,100
3,302
4,650
4)
Financial payables
1,500
1,500
745
5)
Payments on account
62
27
93
6)
Trade creditors
9,625
10,358
11,062
7)
Securities
8)
Subsidiaries
0
0
0
4,980
4,579
5,618
101
9)
Affiliated companies
0
61
10)
Parent companies
0
0
0
11)
Taxes payable
1,453
896
802
12)
Providence and social security charges
13)
Other creditors
D)
TOTAL CREDITORS
E)
ACCRUED EXPENSES AND DEFERRED INCOME
TOTAL LIABILITIES
(A+B+C+D+E)
443
617
497
1,120
1,295
931
20,283
22,635
24,499
775
541
1,221
53,336
50,137
58,704
MEMORANDUM ACCOUNTS
1)
Commitments to Leasing companies
0
0
0
2)
Mortgage guarantee
0
0
0
3)
Guarantees for L/C import
4)
Sureties
5)
Our goods deposited with third parties
TOTAL MEMORANDUM ACCOUNTS
Buongiorno Vitaminic S.p.A.
0
0
0
480
280
699
0
0
0
480
280
699
0
(0)
0
Half-Year Report as of June 30, 2004
Page 59
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock Euro 18,935,354
Registered office: Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
PROFIT AND LOSS ACCOUNT
A)
First Half 2004
Year 2003
First Half 2003
VALUE OF PRODUCTION
1)
13,885
25,451
13,530
- Allowances and discounts to customers
Sales and service revenues
0
0
0
2)
Change in inventory of finished goods
0
0
0
3)
Change in contract work in process
0
0
0
4)
Increases in fixed assets for internal work
569
776
269
5)
Other income and revenues
291
1,319
673
14,745
27,546
14,472
32
54
26
9,586
19,032
10,620
393
822
428
TOTAL VALUE OF PRODUCTION
(A)
B)
COSTS OF PRODUCTION
6)
Raw materials, supplies, consumable and goods
7)
Services
8)
Use of third-party assets
9)
Personnel costs:
a
wages and salaries
2,694
5,178
2,845
b
welfare contributions
835
1,706
894
c
severance indemnity fund
180
336
153
d
pensions and similar rights
0
0
0
e
other personnel costs
0
0
Total personnel costs
10)
3,709
3,892
amortization, depreciation and write-downs:
a
amortization of intangible fixed assets
904
1,709
539
b
Depreciation of tangible fixed assets
143
278
180
c
Other fixed assets write-downs
0
173
158
d
Bad debts and cash
0
363
Total amortization, depreciation and write-downs
11)
0
7,220
Changes in stock of raw materials,
367
1,047
2,524
1,244
0
5
5
supplies, consumables and goods
12)
Provision for risks
0
0
0
13)
Other provisions
0
135
152
14)
Other operating expenses
129
175
112
14,896
29,967
16,479
(151)
(2,421)
(2,007)
TOTAL COSTS OF PRODUCTION
(B)
DIFFERENCE BETWEEN VALUE AND COSTS OF PRODUCTION (A-B)
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 60
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock Euro 18,935,354
Registered office: Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
First Half 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
C)
Year 2003
First Half 2003
FINANCIAL EARNINGS AND CHARGES
15)
Earnings from shareholdings
a
Earnings from shareholdings in subsidiaries and affiliated companies
0
b
Earnings from other companies
0
Total earnings from shareholdings
16)
Other financial earnings:
a
from debtors entered in shareholdings
b
from securities entered in fixed assets that
0
0
21
11
0
0
1
104
0
17
507
540
are not shareholdings
c
from securities entered in current assets that
are not shareholdings
d
Interest and other financial earnings
e
Exchange gains
f
Other earnings
Total other financial earnings
17)
29
611
561
Interest and other financial charges
a
Interest to subsidiaries and affiliated companies
0
0
0
b
Interest to parent companies
0
0
0
c
Interest to other companies
d
Interest and other financial charges
e
Exchange losses
f
Other financial charges
(6)
(1)
(0)
(251)
(624)
(358)
Total interest and other financial charges
TOTAL FINANCIAL EARNINGS AND (CHARGES)
D)
(C)
(257)
(625)
(358)
(228)
(14)
203
ADJUSTMENTS OF FINANCIAL ASSETS VALUE
18)
Revaluations:
a
Of shareholdings
0
135
135
b
Of investments that
0
0
0
0
0
0
are not shareholdings
c
Of securities entered in current assets that
are not shareholdings
Total revaluations
19)
0
135
135
Write-downs:
a
Of shareholdings
b
Of investments that
(1,449)
(8,712)
(3,725)
0
0
0
0
0
0
are not shareholdings
c
Of securities entered in current assets that
are not shareholdings
E)
Total write-downs
(1,449)
(8,712)
(3,725)
TOTAL ADJUSTMENTS OF FINANCIAL ASSETS VALUE (D)
(1,449)
(8,577)
(3,590)
EXCEPTIONAL EARNINGS (CHARGES)
20)
Exceptional earnings:
a
Gains
b
Contingent assets
c
Other earnings
0
0
0
190
1,212
371
0
1
Total exceptional earnings
21)
190
1
1,213
372
Exceptional charges:
a
Losses
0
(279)
0
b
Contingent liabilities
(411)
(1,174)
(344)
c
Other charges
(208)
(685)
Total exceptional charges
TOTAL EXCEPTIONAL EARNINGS (CHARGES)
PROFIT (LOSS) BEFORE TAXES (A-B+C+D+E)
23)
Income taxes
26)
PROFIT (LOSS) FOR THE PERIOD
Buongiorno Vitaminic S.p.A.
(454)
(619)
(2,138)
(798)
(429)
(925)
(426)
(2,257)
(11,937)
(5,820)
0
(333)
(154)
(2,257)
(12,270)
(5,974)
(E)
Half-Year Report as of June 30, 2004
Page 61
BUONGIORNO VITAMINIC S.p.A.
Registered office: Parma, Borgo Masnovo 2
Wholly paid-up capital stock Euro 18,935,354
Parma Register of Companies No. 02699820045
Tax code 02699820045
Vat Code 07863930017
Parma Index R.E.A. No. 225247
NOTES ON THE FINANCIAL STATEMENTS
General principles followed in drawing up the half-year report of Buongiorno Vitaminic S.p.A.l principles followed in
drawing up the half-year report of Buongiorno Vitaminic S.p.A.
These consolidated half-year financial statements include the Balance Sheet, the Profit and Loss Account, the Cash
Flow Statement and the notes on the financial statements, and were drawn up in accordance with the provisions of
the Italian Civil Code, as introduced by Legislative Decree 127/91, and with CONSOB regulation No. 11971 of May
14, 1999, as amended by Resolution No. 12475 of April 6, 2000.
Figures are expressed in thousands of euro and any other units are indicated.
The evaluation criteria adopted to draw up the Consolidated Half-Year Report do not diverge from the ones used to
draw up the 2003 Financial Statements. They comply with Italian laws on Financial Statements and accounting
principles recommended by the National Councils of Accountants, in particular from Document No. 30 for interim
reports.
Evaluation criteria
The main evaluation criteria used to draw up the Half-Year Report, pursuant to Article 2426 of the Italian Civil Code
and further recalled by Article 35 of Legislative Decree No. 127/1997 are as follows:
Intangible fixed assets
Intangible fixed assets are recorded at purchase or production cost, including related additional expenses, and have
been systematically amortized based on their expected useful life.
Startup and expansion costs are amortized over a five-year period.
The costs borne for the creation and registration of trademarks are amortized at a fixed percentage over a period of
ten years.
Consolidation differences arising from the higher value of shareholdings with respect to the subsidiary’s share of
capital and reserves at the time it was taken over are amortized over a five-year period.
Other intangible fixed assets are amortized over a five-year period, with the exception of software, for which a
shorter period of three years is applied, and of trademarks and patents, for which a ten-year period is applied.
The main change with respect to the previous period is related specifically to advertising and promotional expenses.
Starting with the current fiscal year, Buongiorno Vitaminic has already applied one of the most important changes
that will be introduced as of 2005 by the International Accounting Standards (IAS), envisaging the obligation that the
charges Italian legislation has considered as deferred charges, such as marketing expenses, if attributable to more
than one year, instead be posted as they accrue.
Extraordinary maintenance and improvements made on third-party assets are amortized based on the duration of
the contracts.
Tangible fixed assets
Tangible fixed assets were entered at purchase or production cost, inclusive of accessory charges.
Depreciation was calculated at fixed percentages based on the technical and economic rates established in
accordance with the possible residual use of the assets.
Depreciation goes into effect as of the year in which use of the asset begins. For the year of purchase or
production, the applied rates are reduced by 50%.
Costs for ordinary maintenance are entered fully on the profit and loss account; any such costs that increase the life
of the asset to which they refer are attributed at increasing rates for the cost of the assets and are depreciated in
relation to possible residual use.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 62
It must also be noted that during the period, there were no write-ups of the assets, nor were any financial charges
capitalized to increase their value.
The annual depreciation rates that were used are detailed below:
Rate
Plant and machinery
10%
Industrial and commercial equipment
15%
Other assets:
- Furnishings and ordinary office equipment
12%
- Electrical and electronic office equipment
20%
- Assets with a unit value of less than ITL1 million
100%
Net investments
-
The following items are recorded among net investments:
Shareholdings in subsidiaries, affiliated and other companies;
Long-term debtors.
Shareholdings are recorded at incorporation value or purchase price (where applicable increased by additional costs
related to the acquisition itself) and are written down in the event of permanent loss of value.
As regards this valuation, beginning with the fiscal year ended December 31, 2001, we have prudently established
that payments made or to be made in favor of subsidiaries to cover losses they may experience are not added to
the value of the investment, but are deducted directly on the Profit and Loss Account or added to the reserve for
risks related to loss coverage.
Therefore, with the exception of the specifications in section III-B.III.1 Shareholdings of the notes to the financial
statements below, the book value of shareholdings in subsidiaries and affiliated companies is not in excess of the
value calculated with the equity method (adjusted equity), corresponding to the value of capital and reserves held
also taking into consideration goodwill and higher/lower values assigned to the assets of the shareholdings as
compared to their book value.
Financial debtors are related to loans granted to subsidiaries and, to a lesser extent, guarantee deposits. These
debtors have been recorded at their nominal value.
Inventories
Inventories were evaluated at the lesser value between purchase or production cost, and the value assumed based
on market trends.
Debtors and creditors
Debtors are entered based on presumable break-up value, done via entry in a write-down fund to lower their
nominal value. Creditors are entered at their nominal value.
Financial assets that are not fixed assets
Financial assets intended for short-term use are entered under current assets and evaluated at either
purchase/subscription cost or the value assumed based on market trends, whichever of the two is lower.
Accruals and deferrals
Accruals and deferrals include shares of costs and income for the period that accrue in two or more periods to
comply with the accrual principle.
Funds for risks and charges
These were allocated to cover specific losses or charges that are certain or likely but whose amount or occurrence
was still undetermined at period end. The allocations were made respecting the general accruals and prudence
concepts, and they reflect the best possible estimate based on the elements that were available.
Severance indemnity fund
This was allocated as required by law and by the labor contracts in force and reflects the liabilities that have fallen
due to employees of the Parent Company at period-end, net of any advances that were disbursed.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 63
Acknowledgement of income and costs
Income and costs are recorded in accordance with the principle of prudence and the accruals concept, and are net
of returns, discounts, rebates and premiums.
In particular, income and costs have been recorded as follows:
•
•
•
Advertising income and costs: these have been posted to the profit and loss account in accordance with the
underlying contract, based on the accruals concept (as regards length of contract) or on the actual number of
advertising campaigns that took place in the period;
Income and costs for Business Services: these are shown in the profit and loss account in relation to underlying
contracts;
Income and costs for Consumer Services: these are shown in the profit and loss account based on the actual
number of contacts made by the end user and/or on the actual telephone traffic generated.
Conversion criteria for entries in other currencies
The debtors and creditors expressed in foreign currency were initially converted into euro at contractual exchange
rates or the rates in force at the time of the individual transactions. The exchange differences that arose when
debtors were collected and creditors were paid in foreign currency are entered in the Profit and Loss Account.
Losses or profits on entries in currencies that are not part of the European Monetary Union and that arise from the
adjustment to the precise exchange rates at the end of June are reflected in the Profit and Loss Account for the
year.
Financial earnings and charges
These have been recorded in the financial statements based on the principles of accruals-basis accounting.
Exceptional earnings and charges
These include non-operating and other exceptional earnings and charges resulting from events outside of the
normal operations or positive and negative components of income related to previous periods.
Current and deferred taxes
With reference to the period being examined, taxes were not allocated in observance of the provisions of Art. 81,
paragraph 7, of the regulations implementing Legislative Decree no. 58 of February 24, 1998 regarding the
regulations of issuers adopted by CONSOB with Resolution no. 11971 of May 14, 1999, as amended.
Guarantees, endorsements and risks
Guarantees and sureties granted or received are expressed in the memorandum accounts at their nominal value.
Other information
Pursuant to Art. 2428 of the Italian Civil Code, as well as Art. 40 of Legislative Decree 127/1991, we hereby specify
that:
• Buongiorno Vitaminic S.p.A., is not, in turn, controlled by other companies;
• no subsidiaries hold shares in the Parent Company, either directly or through trust companies or other
intermediaries;
• Buongiorno Vitaminic S.p.A. does not hold its own shares, either directly or through intermediaries.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 64
NOTES ON THE ASSET ITEMS OF THE BALANCE SHEET OF BUONGIORNO VITAMINIC S.p.A.
The items that characterize the Financial Statements of Buongiorno Vitaminic S.p.A., as compared to the items
commented in the Consolidated Financial Statements, are explained below.
(B) FIXED ASSETS
I. Intangible fixed assets
The net values of intangible fixed assets are as follows:
12/31/2003
Increases
Depreciation
Write-downs 6/30/2004
and other
movements
Start-up and expansion costs
R&D and advertising
Patents and intellectual property rights
Concessions, licenses, trademarks and similar
rights
Goodwill
Work in process and advances to suppliers
Other intangible assets
1,441
389
43
646
535
241
107
2
(222)
(303)
(26)
(45)
34
397
(11)
-
1,788
724
113
603
97
409
730
557
2
(49)
(259)
(438)
(135)
48
528
338
Total
3,755
1,444
(904)
(153)
4,142
(in thousands of Euro)
The increase in “Start-up and expansion costs” can be attributed mainly to bank brokerage fees for the two capital
increases in April and May. “Research and development costs” refer to the capitalization of internal costs,
specifically for personnel in the R&D area involved in the constant development of new modules for the B!3A
technological platform to keep it up to date in a very dynamic competitive context. The increases in “Works in
process and advances to suppliers” refer to investments in projects that have not been completed yet.
The column “Write-downs and other movements” includes reclassification of the works in process that started to
generate their economic utility during the period, as well as any write-downs or divestments of assets that are no
longer utilized.
II. Tangible fixed assets
(in thousands of Euro)
Plant and machinery
Industrial and commercial equipment
Other fixed assets
Work in process
Total fixed assets
Historical cost
Depreciation fund
41
2
1,884
1,927
(27)
(2)
(909)
(938)
Net value
6/30/2004
14
975
989
Net value
12/31/2003
15
956
73
1,044
Plant and machinery
This item includes telephone and electrical systems.
The following changes took place during the period:
Historical cost
Depreciation fund
Net value
39
2
(24)
15
2
41
(3)
(27)
(3)
14
Historical cost
Depreciation fund
Net value
2
-
(2)
(2)
-
(in thousands of Euro)
December 31, 2003
Increases
Decreases
Depreciation
June 30, 2004
Industrial and commercial equipment
The following changes took place during the period:
(in thousands of Euro)
December 31, 2003
Increases
Decreases
Depreciation
June 30, 2004
Buongiorno Vitaminic S.p.A.
2
Half-Year Report as of June 30, 2004
Page 65
Other fixed assets
This item includes furnishings, office machinery and computers.
Movements during the period were as follows:
(in thousands of Euro)
December 31, 2003
Increases
Decreases
Other movements
Depreciation
June 30, 2004
Historical cost
Depreciation fund
Net value
1,724
87
73
(768)
(141)
(909)
956
87
73
(141)
975
1,884
III. Net investments
1) Shareholdings
The company holds shares in subsidiaries and affiliated and other companies, all of which are valuated at cost and
written down, if necessary, in the event of permanent losses of value, either directly or through funds for risks to
cover losses, in the event of equity deficit.
In addition, it should be noted that of the shareholdings contained in the financial statements, all those previously
held by Vitaminic S.p.A., with the sole exception of Peoplesound.com Ltd, have been written down in their entirety
in previous periods in order to bring the value into line with the share of capital and reserves. When the losses
exceeded the book value of the stake, the shareholding was entered in the fund for risks and charges.
With regard to the shareholding in MyAlertcom S.A., during the year ended December 31, 2001 the decision was
made to maintain the book value of this company, despite the fact that it was higher than the company’s capital and
reserves. This decision stemmed from the fact that this value arose from a contribution made in the final months of
2001, against an expert appraisal drawn up in accordance with the provisions of Art. 2343 of the Italian Civil Code,
which showed an economic evaluation of the company that was much higher than its capital and reserves. The
book value in excess of capital and reserves was thus justified by the latent surplus values in this company, related
to technological and market value, above all in the wireless sector.
When the Annual Report for 2003 was drawn up, an impairment test of the company was conducted by
Ernst&Young, according to which this shareholding was worth between Euro 21.8 and 22.6 million. Prudentially, the
shareholding was entered at the lowest value in this reference range. For the half-yearly report, given the Spanish
subsidiary’s positive performance, with a gross operating margin (GOM) of approximately Euro 1 million and a net
income of approximately Euro 250 thousand, it was not considered necessary to vary the value of this shareholding.
The shareholding in the company Peoplesound.com Ltd. totaled Euro 1,895 thousand at the end of 2003 versus
capital and reserves that, due to net income for the period, rose by approximately Euro 600 thousand to Euro 793
thousand. Nevertheless, during the six-month period examined here, a write-down of Euro 318 thousand was taken
on this shareholding (bringing it to a net value of Euro 3,277 thousand), equivalent to the goodwill amortization
allowance.
During the first half of 2004, the shareholdings account was affected by the following other transactions:
•
increase in share capital through trade and financial debtors in:
ƒ Buongiorno.at email services GmbH for Euro 800 thousand;
ƒ Buongiorno Deutschland GmbH for Euro 1 million;
ƒ Peoplesound.com Ltd. for Euro 1,700 thousand;
ƒ Vitaminic Ltd. for Euro 900 thousand;
•
write-down of the shareholding in the company Profero S.p.A. in the amount of Euro 9 thousand to reflect the
losses accumulated by the company which are deemed to be long-term;
•
the exchange of the shareholding in Digibrands S.p.A. with the shareholding in the Luxembourg company
World Investment Partners, a holding that is part of the Allaxia Group, for an equivalent counter-value;
•
establishment of the Mexican company MyAlert S. de R.L. de C.V in June 2004, in which Buongiorno
Vitaminic S.p.A. holds a 99% stake and the remainder is held by MyAlertcom S.A.;
•
transfer of the shareholding in Vitaminic Sverige to a Swedish company, completed in June 2004.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 66
Based on the above, changes to the investment account can be summarized as follows:
data in or converted to Euro thousand
Balance at
12/31/2003
Increases
Decreases
Write-down
Balance at
6/30/2003
Vitaminic S.a.r.l. (France)
-
-
-
-
-
Vitaminic S.L. (Spain)
-
-
-
-
-
Vitaminic Ltd. (UK)
-
900
-
(638)
262
Vitaminic BV (Holland)
-
-
-
-
-
Eurekan Multimedia S.a. (France)
-
-
-
-
-
Peoplesound.com Ltd. (UK)
1,895
1,700
-
(318)
3,277
Buongiorno.at e-mail services GmbH
1,149
800
-
(77)
1,872
109
-
-
(109)
-
8
-
-
-
8
25
1,000
-
(423)
602
Buongiorno.Uk Ltd.
Buongiorno France S.a.s
Buongiorno Deutschland GmbH
MyAlertcom S.A.
21,800
-
-
-
21,800
86
-
-
-
86
-
(0)
-
-
(0)
25,072
4,400
-
(1,565)
27,907
Digibrands S.p.A.
168
-
(168)
-
-
Total shareholdings in affiliated companies
168
-
(168)
-
-
World Investment Partners (WIP)
-
168
-
-
168
Profero S.p.A.
9
-
-
(9)
-
WinWin Technologies Ltd.
-
-
-
-
-
Total shareholdings in other companies
9
168
-
(9)
168
25,249
4,568
(168)
(1,574)
28,075
Quantum Gap S.a.
MyAlert S. de R.L. de CV
Total shareholdings in subsidiaries
TOTAL SHAREHOLDINGS
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 67
In addition to these write-downs, as shown above, the amounts of losses for the first half of 2004 have been
accumulated to fund for risks related to loss coverage and should be reasonably settled during 2003, so changes
to these reserves can be detailed as follows:
data in or converted to Euro
Vitaminic S.a.r.l.
Vitaminic GmbH
Vitaminic S.L.
Vitaminic Ltd.
Vitaminic BV
Vitaminic Sverige
Eurekan
Peoplesound.com Ltd.
Buongiorno.at e-mail services GmbH
Buongiorno Deutschland GmbH.
Buongiorno France S.a.s
Buongiorno.Uk Ltd.
Balance at
01/01/2004
pro-forma
Utilization
Allocations
Balance at
6/30/2003
(179)
162
-
(17)
-
-
-
(5)
(5)
-
-
(559)
559
-
-
-
-
-
-
(15)
15
-
-
(97)
-
-
(97)
-
-
-
-
(1,878)
-
(1,878)
(411)
-
(411)
(1,193)
(348)
(1,541)
-
(86)
(86)
MyAlertcom S.A.
Total fund for risks - subsidiaries
Digibrands S.p.A.
Total fund for risks – affiliated companies
Profero S.p.A.
Win Win Technologies S.p.A.
World Investment Partners
Total fund for risks – other companies
TOTAL FUNDS FOR RISKS – SHAREHOLDINGS
(4,337)
736
(434)
(4,035)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,337)
736
(434)
(4,035)
These funds are found at line item B.3 of the liabilities section.
In addition to the above, the following information is also provided:
Annex B) Shareholdings in compliance with Article 126 of CONSOB resolution No. 11971 dated May 14, 1999.
Annex C) Shareholdings in subsidiaries, affiliates, and other companies
2) Financial debtors
a) Subsidiary companies
This item refers exclusively to medium/long-term loans with interest, which totaled Euro 1,145 thousand, composed
of Euro 680 thousand for Buongiorno France S.a.s. and Euro 465 thousand for Buongiorno Deutschland GmbH.
(in thousands of Euro)
Buongiorno Deutschland GmbH
Buongiorno.at Email services GmbH
Buongiorno France S.a.s.
TOTAL
6/30/2004
12/31/2003
465
330
6/30/2003
330
-
250
1,550
680
530
150
1,145
1,110
2,030
d) Other companies
Financial debtors totaled Euro 72 thousand and essentially include amounts paid as guarantee deposits at the time
of stipulating rental contracts for operating offices.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 68
C) CURRENT ASSETS
II. Debtors
1) Trade debtors
The balance at June 30, 2004 is detailed below:
(in thousands of Euro)
Trade debtors
Fund for bad debts
Total
6/30/2004
8,050
(230)
7,820
12/31/2003
10,113
(685)
9,428
6/30/2003
10,666
(738)
9,928
The significant decrease in receivables during the six-month period is due essentially to two main factors:
recourse to transfer (without recourse) to selected factoring firms of receivables that have matured with
primary customers as part of consolidated collaboration agreements;
improved performance in collecting payments.
All trade debtors are due within twelve months.
2) Subsidiaries
Listed below are the receivables owed to the Parent company by subsidiaries:
(in thousands of Euro)
Company
Vitaminic S.a.r.l.
Vitaminic GmbH
6/30/2004
55
12/31/2003
172
6/30/2003
172
219
-
218
Vitaminic SL
51
51
364
Vitaminic Ltd.
72
972
1.286
Vitaminic BV
34
318
318
-
253
247
Eurekan Multimedia S.a.
25
10
10
Peoplesound.com Ltd.
583
2,248
2,961
Vitaminic Sverige AB
Peoplesound.fr S.a.r.l.
55
-
-
Buongiorno.at email services GmbH
50
446
790
Buongiorno Deutschland GmbH
513
1,005
817
Buongiorno France S.a.s.
1,225
1,047
756
Buongiorno.uk Ltd.
1,624
332
449
397
509
536
Vitaminic USA Inc.
-
-
291
Vitaminic A/S
-
-
354
Zipmind
-
-
231
4,684
7,581
9,801
MyAlertcom S.A.
TOTAL
5) Other debtors
(in thousands of Euro)
VAT credit
Credit from the State Treasury
Trade debtors for advances
Other debtors
Total
6/30/2004
108
287
395
12/31/2003
104
384
488
6/30/2003
1,753
237
511
2,501
Under the item “Other debtors”, the decrease with respect to December 31, 2003 can be attributed mainly to the
reduction in “Other amounts receivable” due to the collection of sums arising from completion of the EU project
“eContent” at the end of 2003 and definitively approved by the European Commission in April 2004. The item also
includes Euro 44 thousand for the loan with interest that Buongiorno Vitaminic S.p.A. disbursed to Digibrands
S.p.A., falling due within the next few months after having been renewed pursuant to the agreement to transfer the
shareholding to WIP.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 69
Credits from the State Treasure at the end of the six-month period totaled Euro 108 thousand, which is essentially
the same as the previous period.
The VAT credit, arising from assets in the previous period for which a refund was requested, was collected during
the second half of 2003.
IV. Cash in hand and cash equivalents
At June 30, 2004 the Parent Company had Euro 5,232 million in cash in hand and cash equivalents. With regard to
the Company’s bank and postal accounts, it should be noted that these include a tied-up current account in the
amount of Euro 502 thousand. Cash in hand and cash equivalents are broken down as follows:
(in thousands of Euro)
Bank and postal accounts
Checks
Cash in hand and cash
equivalents
Total
06/30/004
5,232
-
12/31/2003
667
9
-
06/30/2003
1,108
1
5,232
676
1,109
Investment flows relating to the period are shown in the cash flow statement (Annex A)
D) ACCRUALS AND DEFERRALS
Accrued income, attributable mainly to advertising campaigns and business services started at the end of the sixmonth period and extending into the second half of 2004, have essentially remained the same as the values
reported at December 31, 2003.
Prepayments are related to the supply of services invoiced in advance and discounted in relation to effective
maturation of the right or supply of the service that is used.
The situation can be broken down as follows:
(in thousands of Euro)
Accrued income
Prepayments
Total
6/30/2004
315
467
782
12/31/2003
326
328
654
6/30/2003
403
444
847
NOTES ON THE LIABILITY ITEMS OF THE BALANCE SHEET OF BUONGIORNO VITAMINIC S.p.A.
A) CAPITAL AND RESERVES
I. Share capital
During the first half of 2004, share capital increased from Euro 17,605,190.20 to Euro 18,935,354.36 as a result of:
ƒ capital increases coordinated by Banca IMI S.p.A. totaling Euro 1,297,855;
ƒ capital increases for the stock option plans, subscribed in the amount of Euro 32,309;
As of June 30, 20043, the share capital of Buongiorno Vitaminic S.p.A. is therefore composed of 72,828,286
ordinary shares with a par value of Euro 0.26 each.
II. Share premium account
This includes the amounts paid up by the shareholders for the share premium during the capital increases occurring
between the date the Company was established and June 30, 2004, net of amounts paid to cover losses for
previous periods.
X. Loss for the year
This item includes the loss of Buongiorno Vitaminic S.p.A. for the year of Euro 2,257 thousand.
B) FUNDS FOR RISKS AND CHARGES
(in thousands of Euro)
Funds for legal practices
6/30/2004
12/31/2003
6/30/2003
40
40
40
Other funds
4,139
4,874
4,930
Total
4,179
4,914
4,970
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 70
The item “Other funds” includes:
- the shareholding write-down fund, in the amount of Euro 4,036 thousand, to cover the negative capital and
reserves of the related shareholdings (see section B.III (1) Shareholdings for more information);
- the fund for restructuring charges, in the amount of Euro 102 thousand, to cover restructuring activities approved
during the year but which will take place in subsequent periods;
The change from the previous periods is due primarily to the partial use of the funds to cover losses of the
consolidated and unconsolidated companies to settle the negative capital and reserves.
C) SEVERANCE INDEMNITIES
The severance indemnity fund shows the actual amount due by the Parent Company for severance indemnities at
June 30, 2004 for the employees of Parent Company on the payroll at that time, net of advances paid and
liquidations. The fund totals Euro 913 thousand, with a net increase of Euro 68 thousand for the six-month period.
Movements during the period are shown in the table below:
(in thousands of Euro)
Severance indemnity fund at December 31, 2003
845
Allocations
180
Payments
(112)
Severance indemnity fund at June 30, 2004
913
D) CREDITORS
At June 30, 2004, there were no amounts falling due after more than one year, nor any borrowing secured by
collateral (“real securities”).
3) Banks
Payables to the banks and related systems totaled Euro 1,100 thousand and are composed mainly of advances on
invoices and factoring operations with recourse.
Investment flows relating to the period are shown and commented upon in the cash flow statement (Annex A)
4) Other financial institutions
This item involves the interest-bearing loan disbursed by shareholders in 2003 and falling due at the end of 2004, in
the amount of Euro 1,500 thousand.
6) Trade creditors
Trade creditors at the end of the reference period totaled Euro 9,625 thousand. The decrease in trade creditors with
respect to the end of 2003 (Euro 10,358) – despite growth in turnover – is due mainly to:
ƒ the definitive settlement of outstanding items from previous periods;
ƒ improved terms of supply, not only with regard to accepted economic conditions but also agreed financial
conditions.
8) Amounts due to subsidiaries
Payables to subsidiaries are for services that Buongiorno Vitaminic S.p.A. acquired from other Group companies for
its own use or within a Group-related concept.
The situation at June 30, 2004 has greatly been simplified as a result of the definitive closing/liquidation of many
companies that were formerly part of Vitaminic. This item is detailed below:
(in thousands of Euro)
Company
6/30/2004
12/31/2003
Vitaminic S.a.r.l.
14
-
-
Vitaminic GmbH
19
238
238
1,326
Vitaminic Ltd.
6/30/2003
1,043
1,536
Vitaminic BV
284
284
Vitaminic Sverige AB
227
227
Eurekan Multimedia S.a.
14
-
Buongiorno.at email services GmbH
10
50
31
Buongiorno Deutschland GmbH
92
23
87
Buongiorno France S.a.s.
28
9
7
695
193
226
Buongiorno.uk Ltd.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 71
MyAlertcom S.a.
2,796
2,498
Peoplesound.com Ltd.
-
-
57
Vitaminic S.l.
-
-
312
Vitaminic U.S.A. Inc
-
-
275
Skalasoft EOOD
-
-
47
4,980
4,579
5,618
TOTAL
2,291
11) Taxes payable
Taxes payable at June 30, 2004, totaling Euro 1,453 thousand, were mainly for withholding tax for employees and
independent workers, as well as taxes for the period (IRAP – Regional Business Tax) and VAT that matured on
services provided.
12) Providence and social security charges
This item includes contributions accrued but not yet paid to providence and social security institutions related to
salaries for the month of June, unused holiday time, and bonuses for employees and collaborators. As of June 30,
2003, this item amounted to Euro 443 thousand.
13) Other creditors
”Amounts payable to employees” and collaborators is composed of sums that have matured for bonuses, as well as
paid holidays and leaves that were not taken, totaling Euro 643 thousand. This has decreased with respect to
December 31, 2003 due to the payment of employee and collaborator bonuses that matured in 2003. The item
“Other” totaled Euro 477 thousand.
This item can be broken down as follows:
(in thousands of Euro)
Amounts payable to employees
6/30/2004
643
12/31/2003
927
6/30/2003
677
477
368
254
1,120
1,295
931
Other
Total
E) ACCRUALS AND DEFERRED INCOME
This item amounted to Euro 775 and is broken down as follows:
(in thousands of Euro)
Accruals to personnel
Other
Total
Deferred income
Total
6/30/2004
187
4
191
584
775
12/31/2003
30
5
35
506
541
6/30/2003
485
5
490
731
1,221
Accruals to personnel include deferred portions of salaries such as the “thirteen” and the “fourteenth month” of salary.
Deferred income refers to amounts accruing in the next fiscal year for advertising campaigns already invoiced by the
Company and which will be completed in 2004, and are recorded based on the completed percentage of the
campaign.
SURETYSHIPS AND OTHER GUARANTEES GRANTED
The memorandum accounts include suretyships for a sum total of Euro 480 thousand, for guarantees granted by
the Parent Company Buongiorno Vitaminic S.p.A. to banks for foreign loans disbursed to subsidiaries in Austria
(Euro 80 thousand) and Germany (Euro 400 thousand).
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 72
NOTES ON THE PROFIT AND LOSS ACCOUNT ITEMS OF BUONGIORNO VITAMINIC S.p.A.
A) VALUE OF PRODUCTION
Breakdown of income for each line of business, set forth in the table below, shows 13.4% growth in core business
revenues, most of which from Consumer Services.
With regard to income for Intercompany Services, i.e. services the Parent Company has provided to subsidiaries, at
June 30, 2004 this item totaled Euro 1,645 thousand.
(in thousands of Euro)
First Half 2004
First Half 2003
Marketing Services
5,318
4,597
Consumer Services
6,922
6,198
12,240
10,795
Total
Intercompany services
Total
1,645
2,735
13,885
13,530
Value of production amounted is Euro 14,745 thousand. Increases in fixed assets for internal work (internal
capitalizations) totaled approximately Euro 570 thousand and stem from applied R&D activities required for ongoing
adaptation of the multi-channel technological platform to handle the growing and increasingly tough competitive
context.
The item “Other revenues” is composed of the release of the fund for bad debts, insurance claims and mistaken
estimates from previous periods.
The revenue item “no monetary transaction” was not significant during this six-month period.
(in thousands of Euro)
First Half 2004
First Half 2003
13,885
13,530
Incr. in fixed assets for internal work
569
269
Other income and revenues
291
673
14,745
14,472
Core business sales
Total revenues
B) COSTS OF PRODUCTION
7) Costs for services
This item includes:
ƒ costs of production including bandwidth rental costs, costs for the purchase of contents, SMS costs and costs
for rebates on revenues from telephone traffic;
ƒ marketing costs for promoting VAS services and for Corporate Image;
ƒ overheads and administrative expenses, which include consulting costs, office maintenance, insurance, and
employee travel and room/board expenses.
Listed below is the detailed breakdown of costs only for the first half of 2004, compared against the corresponding
period in 2003. This comparison shows a reduction in overheads and administrative expenses, as well as marketing
expenses due to the effect of merger synergies and the increase in production costs following the increase in
turnover.
(in thousands of Euro)
First Half 2004
First Half 2003
Costs of production
6,167
5,285
Marketing & sales
1,945
2,990
Overheads and administrative
expenses
Total
1,474
2,345
9,586
10,620
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 73
8) Use of third-party assets
Costs related to the use of third-party assets include primarily the rental of office space and operative leasing fees
for the hardware systems.
9) Personnel costs
This item includes costs for the employees of Buongiorno Vitaminic S.p.A., which at the end of the six-month period
totaled Euro 3,709 thousand versus Euro 3,892 thousand for the corresponding period in 2003. This reduction
bucks the trend with respect to the number of employees, which rose by 26 employees during the first half of 2004
(from 123 people at the end of 2003 to 149 at the end of the first half of 2004). The decrease in the average cost of
human resources is due to the need to adapt the skills and responsibilities of the structure to the new business
needs, and to the leaner managerial structure following the merger between Buongiorno and Vitaminic.
First Half 2004
First Half 2003
Average employment 2004
127
101
114
22
22
24
149
123
138
Employees and middle management
Executives
Total
10) Amortization, depreciation and write-downs
Amortization, depreciation and write-downs at the end of the first half of 2004 totaled Euro 1,047 thousand. This
item is broken down in the following table:
(in thousands of Euro)
First Half 2004
First Half 2003
Amortization of intangible fixed assets
904
539
Depreciation of tangible fixed assets
143
180
Other fixed asset write-downs
-
158
Write-downs of bad debt and cash
-
367
1,047
1,244
Total
Amortization of intangible fixed assets
The allocation for the first half of 2004 (a total of Euro 904 thousand) is detailed in the notes on intangible fixed
assets. The increase is due mainly to the amortization of merger costs during 2003 and to capital increases in
2004.
Depreciation of tangible fixed assets
Depreciation for the period, amounting to Euro 143 thousand was determined using technical and economic rates
established based on possible residual asset use as previously illustrated in the Notes on evaluation criteria for
tangible fixed assets.
Write-down of debtors entered in current assets
The fund for bad debts was commensurate to the current accurate quantification of receivables at risk in the
customer portfolio opened at the end of the reference period. As a result, no additional sums were allocated to the
funds.
C) FINANCIAL EARNINGS (CHARGES)
16) Other financial earnings
This item comprises interest income that has matured on liquid deposits, interest that has matured on intercompany
loans, and interest that has matured on the loan to Digibrands S.p.A. At the end of the first half of 2004, the item
“Other income and financial charges” totaled Euro 29 thousand.
(in thousands of Euro)
Interest from Group companies
Interest earned from other companies
First Half 2004
First Half 2003
11
21
1
-
Interest and other financial earnings
17
540
Total
29
561
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 74
17) Interest and other financial charges
This item is composed almost exclusively of interest charges on the use of lines of credits from banks and on the
medium/long-term interest-bearing loan disbursed by shareholders in mid-2003 and falling due at the end of the
year.
(in thousands of Euro)
First Half 2004
Interest to other companies
First Half 2003
6
-
Interest and other financial charges
251
358
Total
257
358
D) ADJUSTMENTS OF FINANCIAL ASSET VALUE
19) Write-downs
The write-downs coincide with the net losses posted by each subsidiary, with the exception of Peoplesound.com
LTD, which posted an adjustment equal to the amortization of goodwill, thereby adjusting the value of this
shareholding.
The write-downs on shareholdings totaled Euro 1,449 thousand, a figure that is significantly less than last year due
to the decisive improvement in the economic results of all Group companies.
The situation is detailed in the following table:
(in thousands of Euro)
Write-downs
First Half 2004
-
Write-downs
First Half 2003
95
Vitaminic Ltd.
80
607
Zipmind S.r.l.
-
49
Eurekan E.u.r.l.
-
175
Peoplesound.com Ltd.
Buongiorno.at e-mail services GmbH
318
77
1,132
279
Buongiorno.Uk Ltd.
195
343
Buongiorno France S.a.s
347
504
Buongiorno Deutschland GmbH
423
127
-
-
1,440
3,311
Vitaminic S.a.r.l.
MyAlertcom S.A.
Total write-downs of shareholdings in subsidiaries
Digibrands S.p.A.
-
350
Total write-downs of shareholdings in affiliated companies
-
350
Winwin technologies LTD
-
64
Profero S.p.A.
9
-
Total write-downs of shareholdings in other companies
9
64
1,449
3,725
TOTAL WRITE-DOWNS OF SHAREHOLDINGS
E) EXCEPTIONAL EARNINGS (CHARGES)
20) Earnings
The Parent Company’s exceptional earnings totaled approximately Euro 190 thousand in the first half of the year,
most of which arising from contingent assets for the renegotiation of debts and from payable invoicing mistakes
during previous periods.
21) Charges
Extraordinary charges for the Parent Company during the first half of the year totaled Euro 619 thousand. Part of this
amount (approximately Euro 411 thousand) came under contingent liabilities, whereas the remaining portion is
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 75
composed of other charges for services that did not take place during the reference period or that, in any event,
denote their exceptional or extraordinary character with respect to the Company’s core business.
On behalf of the Board of Directors
The Chairman
Mauro Del Rio
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 76
Cash Flow Statement
(Annex A)
BUONGIORNO VITAMINIC SpA
Wholly paid-up capital stock Euro 18,935,354
Registered office: Parma, Borgo Masnovo 2
Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
Tax code 02699820045
Vat Code 07863930017
Cash flow statement at June 30, 2004
(in thousands of Euro)
H1 2004
Group loss
FY 2003
H1 2003
-2,257
-12,269
1,047
1,987
719
0
173
158
1,495
6,582
2,799
68
150
29
Net change in funds for risks and charges
1,227
3,371
1,093
Cash flow from ordinary activities
1,580
-6
-1,177
(Increase) / decrease in trade debtors
2,828
-610
-3,819
Increase / (decrease) in trade creditors
-393
-294
2,929
413
2,688
2,299
4,428
1,779
232
-1,290
-3,381
-2,146
-89
127
-68
- investments
-4,564
-3,537
-1,375
Cash flow from investing activities (B)
-5,943
-6,792
-3,590
Cash flow from operating and investing activities (A+B)
-1,515
-5,012
-3,357
Paid capital increase
8,242
106
Cash flow from financing (C)
8,242
106
-
(101)
Amortization, depreciation and write-downs
Intangible assets write-downs
Shareholdings write-downs
Net change in the severance indemnity fund
Change in other current assets items
Net cash flow from ordinary activities
(A)
-5,974
net investments/disinvestments in:
- intangible fixed assets
- tangible fixed assets
Other changes in the equity and financial situation that do not entail cash flows
(D):
Allotment of intangible assets and acquisition of companies through the issuing of
stocks
Capital increase through contributions in-kind
-
101
-
-
Balancing of losses of subsidiaries through a reduction in credits
1,962
25,373
23,039
Balancing of losses of subsidiaries through the use of the shareholdings write-down
fund
-1,962
(25,373)
(23,039)
Cash flow for the period (A+B+C+D)
6,727
(4,906)
(3,357)
Cash and cash equivalents at period start
(4,082)
824
824
Cash flow for the period
6,727
(4,906)
(3,357)
Cash and cash equivalents at period end
2,645
(4,082)
(2,533)
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 77
(Annex B)
Statement of Relevant Shareholdings Pursuant to Article 126 of CONSOB Resolution No.11971 dated May 14,
1999
Company
Headquarters
% of voting capital held
Title to
ownership
Direct holder
Shareholdings in subsidiaries
Buongiorno Deutschland GmbH
Berlin
Buongiorno France Sarl
Paris
Buongiorno.at email serv. GmbH
Eurekan Multimédia S.A.
Vienna
Buongiorno.uk LTD
London
MyAlert Portal S.L.
Madrid
100.00%
ownership
MyAlertcom S.A.
MyAlertcom S.A.
Madrid
99.91%
ownership
Buongiorno Vitaminic S.p.A.
Paris
100%
ownership
97.96%
ownership
Buongiorno Vitaminic S.p.A.
100%
ownership
Buongiorno Vitaminic S.p.A.
100%
ownership
Buongiorno Vitaminic S.p.A.
99.55%
ownership
Buongiorno Vitaminic S.p.A.
Buongiorno Vitaminic S.p.A.
MyAlert S. de R.L. de CV
Mexico City
99.00%
ownership
Buongiorno Vitaminic S.p.A.
Peoplesound.com Ltd
London
100%
ownership
Buongiorno Vitaminic S.p.A.
Peoplesound.de GmbH
Munich
100%
ownership
Peoplesound.com Ltd
Peoplesound.fr Eurl
Paris
100%
ownership
Peoplesound.com Ltd
Quantum Gap
Madrid
100%
ownership
Buongiorno Vitaminic S.p.A.
Skala Soft EOOD
Sofia
100%
ownership
MyAlertcom S.A.
Vitaminic BV
Amsterdam
100%
ownership
Buongiorno Vitaminic S.p.A.
Vitaminic GmbH
Hamburg
100%
ownership
Buongiorno Vitaminic S.p.A.
Vitaminic Ltd
London
100%
ownership
Buongiorno Vitaminic S.p.A.
Vitaminic S.a.r.l.
Paris
100%
ownership
Buongiorno Vitaminic S.p.A.
Vitaminic SL
Madrid
100%
ownership
Buongiorno Vitaminic S.p.A.
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 78
Shareholdings of Buongiorno Vitaminic S.p.A. in subsidiaries, affiliates and other companies
(in thousands of Euro)
Company
Status
Headquarters
% of voting shares held
Title
Share capital at
6/30//04
Capital and reserves of
Parent Company at
6/30/2004 (local FS)
(Annex C)
Valued using the equity
method (100%)
Valued using the
equity method
Net value of shareholding
entered in FS at 6/30/04
Shareholdings in subsidiaries
Buongiorno Deutschland GmbH (a)
operative
Berlin
100%
ownership
100
166
(270)
(270)
191
Buongiorno France Sarl (a)
operative
Paris
97.96%
ownership
3,108
(1,541)
(1,518)
(1,487)
(1,533)
Buongiorno.at email serv. GmbH (a)
Eurekan Multimédia S.A. (b)
operative
Vienna
100%
ownership
86
(37)
(26)
(26)
(6)
100%
ownership
234
(97)
(97)
(97)
(97)
non operative Paris
Buongiorno.uk LTD (a)
operative
London
99.55%
ownership
769
(87)
(75)
(75)
(86)
MyAlertcom S.A. (a)
operative
Madrid
99.95%
ownership
2,446
4,401
6,691
6,688
21,800
MyAlert S. de R.L. de CV (b)
operative
Mexico City
99.00%
ownership
0
0
0
0
0
Peoplesound.com Ltd (a)
operative
London
100%
ownership
11
794
3,277
3,277
3,277
Quantum Gap (a)
operative
Madrid
100%
ownership
22
151
151
151
86
Vitaminic BV (b)
non operative Amsterdam
100%
ownership
18
0
0
0
0
Vitaminic GmbH (b)
in liquidation
Hamburg
100%
ownership
25
0
0
0
0
Vitaminic Ltd (b)
operative
London
100%
ownership
1
262
262
262
262
Vitaminic S.a.r.l. (b)
non operative Paris
100%
ownership
8
(17)
(17)
(17)
(17)
Vitaminic SL (b)
operative
100%
ownership
3
(5)
(5)
(5)
(5)
Madrid
Shareholdings in affiliated companies
Shareholdings in other companies
Profero S.p.A.
operative
Parma
9%
ownership
n.a.
-
Win Win Technologies Ltd
in liquidation
London
4%
ownership
n.a.
-
World Investment Partners S.a.r.l.
operative
Luxembourg
1.13%
ownership
n.a.
168
(a): share capital and capital and reserves taken from the local Financial Statements for the period ended 6/30/2004
(b): share capital and capital and reserves inferred from the balance sheet at 6/30/2004
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 79
Statement of changes in capital and reserves of Buongiorno Vitaminic S.p.A.
(Annex D)
Statement of changes in capital and reserves at 6/30/2004
(in thousands of Euro)
DESCRIPTION
Balance at period start
- Allocation of profit (loss) for the year:
Paid-out dividends
Share to the Board of Directors
- Capital increases (decreases):
- Capital increase and Stock Option plan
- Other movements due to reclassification
- Profit (loss) for the period
Balance at period end
Buongiorno Vitaminic S.p.A.
Share capital
MOVEMENTS AT 6/30/2004
Profit
Share
Other
(loss)
premium
reserves
account
carried forward
17,605
7,795
(4,198)
1,330
6,912
18,935
10,508
Half-Year Report as of June 30, 2004
Profit
(loss)
8,071
(8,071)
0
0
(12,269)
12,269
0
0
(2,257)
(2,257)
Page 80
Total
capital and
reserves
21,202
8,242
(2,257)
27,186
3 Company Data and Information for Shareholders
Buongiorno Vitaminic SpA
Registered office and headquarters:
Borgo Masnovo 2,
43100 Parma, Italy
Offices:
Via Cosimo Del Fante 10
2012 Milan, Italy
www.buongiorno.com
Fully subscribed and paid-up capital: Euro 18,935,354.36
Tax ID and Parma Register of Companies No. 02699820045
Parma Index R.E.A. No. 225247
VAT code No. 07863930017
Investor Relations:
Email: [email protected]
Telephone: +39 02 582125.1
Fax: +39 02 58431008
Buongiorno Vitaminic S.p.A.
Half-Year Report as of June 30, 2004
Page 81