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European sales recorded a good trend in the French and British affiliates, a drop in both the German
affiliate (since January 2012, sales operations are conducted through a local agency) and in the Spanish
affiliate which suffered in a macroeconomic contest that under certain aspects was worse than the
Italian one. Revenues are basically stable in the international sales channel (sales to extra EU and extra
Latin America customers). The gains made by South America in sales are significant. This market is
recording strong growth such that expectations are for a strengthening of Olivetti’s presence there.
EBITDA
EBITDA is a negative 35 million euros, with a negative change of 16 million euros compared to the prior
year. In 2011, as a future increase of share capital, Telecom Italia S.p.A. conferred trademarks
(12 million euros) and patents (4 million euros) to Olivetti S.p.A.. The result of this conferral was the
resolution of contracts with Telecom Italia which covered the utilization of these rights, with a negative
impact on EBITDA of 10 million euros. Added to this first effect are lower margins of 10 million euros
associated with the decline in revenues, of which, about 4 million euros in particular is the effect of the
ongoing contraction in the ink jet segment. The turnaround process currently in progress which has led
to a repositioning of new product and service line offers, the entry into new markets and the
reorganization of some sales channels has not yet compensated for the decline in ink jet products and
the unfavorable macroeconomic scenario. The lower margins have been partially reabsorbed by a
reduction in fixed costs for 4 million euros compared to the prior year.
At the organic level, EBITDA, calculated by taking into account expenses connected with the mobility
procedure under Law 223/91 signed in 2010, shows a negative change of 19 million euros.
EBIT
EBIT is a negative 41 million euros, with a negative change of 17 million euros compared to 2010, owing
to the reasons explained under EBITDA.
Capital expenditures
Capital expenditures amount to 5 million euros, unchanged compared to the prior year.
Headcount
Headcount at December 31, 2011 is 1,075 (984 in Italy and 91 outside Italy), a reduction of 15
compared to December 31, 2010 (1,090, of whom 1,001 in Italy and 89 outside Italy). During the
period, 33 persons were added and 48 persons left, consistently with the professional remix focused on
the new Olivetti sales offerings.
Commercial developments
During 2011, in response to the evolution of the ICT market and the new opportunities offered by Cloud
Computing, Olivetti pursued its repositioning strategy as a solution provider by putting together an
integrated hardware and software package, customized for the client and supported by an extensive
assistance network. In particular, after launching in February 2011 the first OliPad 100 tablet, complete
with applications for the consumer world and the business world, in September 2011, two new tablet
models were launched: OliPad 110 and OliPad Smart again based on Android but with 10” and 7”
screens.
For the Business market, the OliPad tablets, sold through the Olivetti and Telecom Italia sales network,
offer a higher level of personalization according to a company’s individual needs. They also give access
to a rich offering of applications thanks to the Applications Warehouse, a veritable virtual warehouse of
software applications that can be configured and customized that Olivetti has expressly dedicated to
companies and the Public Administration. Just a few of the applications available are: digital catalogs
and display guides for points-of-sale devoted to the fashion sector, sales force management applications
and management of specific activities in the pharmaceutical sector. During the last few months, various
commercial endeavors have been activated with large customers with the aim of employing the OliPad
for automation projects: in the advanced stage is the project for accessing company applications by
more than fifteen thousand people in the field in the transport sector, in addition to other important
projects in pharmaceutics and utilities. In the banking and insurance sector, Olivetti, with Telecom Italia,
Report on Operations The Business Units of the Telecom Italia Group – Olivetti 77