2006 Annual Report - Fiat SpA

Services – Business Solutions
Operating Performance
In 2006, the Sector continued its process of transformation
launched in the previous years. On the one hand, it continued
to sell businesses that are no longer considered priority
activities and on the other hand it focused on reassigning
services provided to the Fiat customer. At the same time, these
activities were conveyed in the subsidiary Fiat Services S.p.A.
(formerly Fiat Gesco S.p.A.).
At the Human Resources unit, initiatives to boost efficiency
continued and a reorganisation process was undertaken
to refocus the unit on specialised, institutional and social
assistance services to be provided in support of the Group’s
employees and personnel departments.
The Administration unit continued to improve its transactional
processes in terms of quality and efficiency, as did the I.C.T. -
Information and Communication Technology unit, which also
finalised the sale of Atlanet.
For the Facility Management unit, in December 2006 an
agreement was signed with the Pirelli & C. Real Estate group
for the sale of the activities performed by Ingest Facility (Italy,
Poland and France).
80 Report on Operations Business Solutions
Highlights
(in millions of euros) 2006 2005
Net revenues 668 752
Trading profit 37 35
Operating result (*) 28 7
Investments in tangible and intangible assets 10 19
Employees at year-end (number) 5,057 5,436
(*) Including restructuring costs and unusual income (expenses).
Finally, in June 2006 the investment in Sestrieres S.p.A.,
a ski lift and cable car operator, was sold.
Effective January 1, 2007, Services operations, including
payroll activities, were transferred to Fiat Services S.p.A.,
which is organised in three service units: Transactional
Processes (Finance and Payroll), ICT Services and Customs
Services.
From 2007 onwards, Fiat Services S.p.A. and its subsidiaries
outside of Italy will be reported under Holding companies and
Other companies, and the Business Solutions Sector will thus
no longer be represented.
Publishing and Communications
Itedi
Operating Performance
In 2006, average daily sales of newspapers in Italy rose
by around 2% over the previous year.
The Italian advertising market as a whole grew by 2.4% over
2005, slightly less than 2005’s 2.8% despite such major media
events as the national elections, Olympic Games and World
Cup soccer championships. Performance by the various media
was far from uniform. The Internet boom overshadowed the
moderate growth in periodicals and newspapers (outperformed
once again by the free press) and radio. Television in general
showed zero growth (though satellite TV made major
advances), while billboards and cinema advertising dropped
significantly.
Editrice La Stampa S.p.A. reported an average daily circulation
of 310,000 copies in 2006, a 1% drop from the 312,000 copies
in 2005. This erosion was largely due to the fact that the joint
marketing arrangement with Editoriale Corriere di Romagna
was discontinued in September 2006, as well as to lower
newsstand sales.
The value of production was 170 million euros, against 169
million euros in 2005. This result is largely attributable to
higher advertising revenues and higher revenues from
additional items leveraging the paper’s brand name, which
offset the downturn in revenues from newspaper sales.
Publikompass S.p.A. booked advertising billings of 332 million
euros in 2006, compared with 328 million euros in 2005. This
slight (+1%) increase was largely due to higher revenues from
newspaper advertising, which offset the drop in income from
periodicals and audiovisual media, an area where sales of
advertising space with Warner Village did not entirely make
up for the loss of Rete A.
Highlights
(in millions of euros) 2006 2005
Net revenues 401 397
Trading profit 11 16
Operating result (*) 12 13
Investments in tangible and intangible assets 45 20
Employees at year-end (number) 836 846
(*) Including restructuring costs and unusual income (expenses).
In May 2006, distribution activities for the daily La Stampa
were assigned to a company set up for this purpose (To-dis
S.r.l.) and active in the distribution of publishing products,
in which M-dis S.p.A. holds a 55% interest and Editrice La
Stampa a 45% interest.
On November 19, 2006, a new all-colour tabloid format
featuring an original graphic layout was introduced for the
daily La Stampa. On the same date, the new version of the
newspaper’s website went on-line, with graphics matching
those of the paper and more sections and wider coverage
than ever before.
Report on Operations Itedi 81