to download Telecom Italia Annual Report 2011 - Company Reporting

EBITDA
EBITDA in 2011 is 4,631 million reais, up 430 million reais compared to 2010 (+10.2%); the increase in
the EBITDA margin associated with the growth of revenues is partnered by operating efficiencies
achieved on the front of industrial costs, employee benefits expenses and trade receivables
management.
The EBITDA margin is 27.1%, down 2 percentage points from 2010. This result is the consequence of
the cited market penetration strategy focusing on smartphones and webphones, offset however by
operating efficiencies in industrial costs and employee benefits expenses.
The organic change in EBITDA compared to 2010 is +448 million reais and the organic EBITDA margin is
27.2% (29.1% in 2010). Details are as follows:
(millions of Brazilian reais) 2011 2010 Change
Historical EBITDA 4,631 4,201 430
Other non-organic (income) expenses 18 - 18
Comparable EBITDA 4,649 4,201 448
With regard to changes in costs, the following is noted:
(millions of euros)
2011
(a)
2010
(b)
(millions of Brazilian reais)
2011
(c)
2010
(d)
Change
(c-d)
Acquisition of goods and services 4,399 3,519 10,234 8,208 2,026
Employee benefits expenses 321 283 747 659 88
Other operating expenses 747 588 1,738 1,371 367
Change in inventories (19) 76 (45) 178 (223)
• acquisition of goods and services: totals 10,234 million reais (8,208 million reais in 2010). The
increase of 24.7% compared to 2010 (+2,026 million reais) can be analyzed as follows:
– +1,259 million reais for purchases of raw materials, auxiliaries, consumables and
merchandise (of which +985 million reais is product cost)
– +220 million reais for external services costs,
– +363 million reais for the portion of revenues to be paid to other TLC operators,
– +184 million reais for rent and lease costs;
• employee benefits expenses amount to 747 million reais, increasing 88 million reais compared to
2010 (+13.4%). The average headcount grew from 8,727 in 2010 to 9,194 in 2011. The percentage
of employee benefits expenses to revenues is 4.4%, decreasing 0.2 percentage points from 2010;
• other operating expenses: amount to 1,738 million reais, increasing 26.8% (1,371 million reais in
2010). Such expenses consist of the following:
(millions of Brazilian reais) 2011 2010 Change
Writedowns and expenses in connection with credit management 232 311 (79)
Provision charges 140 41 99
Telecommunications operating fees and charges 1,290 961 329
Indirect duties and taxes 33 26 7
Sundry expenses 43 32 11
Total 1,738 1,371 367
Report on Operations The Business Units of the Telecom Italia Group – Brazil 62