CONSOLIDATED QUARTERLY REPORT OF THE DADA GROUP AS AT SEPTEMBER 30, 2005 (Prepared in accordance with IAS/IFRS international accounting standards)

Transcription

1 CONSOLIDATED QUARTERLY REPORT OF THE DADA GROUP AS AT SEPTEMBER 30, (Prepared in accordance with IAS/IFRS international accounting standards) Registered Office: Borgo degli Albizi 12 - Florence Share capital Euro 2,692, fully paid-in Florence Company Registry Office No. FI REA Fiscal code/vat No

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3 CONTENTS CORPOATE BOARDS 4 RESULTS 6 DIRECTORS REPORT ON OPERATIONS: Introduction Information on the operations 6 8 Subsequent events to the quarter and outlook QUARTERLY REPORT OF THE DADA GROUP: Balance sheet 17 Income statement 18 IAS/IFRS RECONCILLIATION TABLES 22 3

4 CORPOATE BOARDS The corporate boards were appointed by the Shareholders Meeting on April 11, 2003 for the three-year period BOARD OF DIRECTORS Paolo Barberis Chairman Angelo Falchetti Managing Director Barbara Poggiali Director Fabio Massimo Ventura Director 1, 5 Fabio Palumbo Director 3 Giorgio Riva Director 1, 2 Giovanni Benedetto Director 1, 5 Lorenzo Lepri Pollitzer de Pollenghi Director 2, 3 Marco Argenti Director 4 Massimiliano Pellegrini Director Roberto Sottani Director Salvatore Amato Director 2 Vittorio Pessina Director Member of the Internal Control Committee Member of the Nominations Committee Member of the Remuneration Committee Co-opted, in substitution of the director Alessandro Sordi, July 20, Independent director in accordance with the self-governance code for Listed Companies. The Board of Directors has conferred to the Managing Director powers for the management of the company with limitations on the value of transactions, and this latter has in turn conferred some powers for specific areas with limitations on the value of transactions. BOARD OF STATUTORY AUDITORS Alessandro Grimaldi Pier Angelo Dei Chairman Board of Statutory Auditors Statutory Auditor Giancarlo Lemmi Statutory Auditor Piero Alonzo Alternate Auditor Francesca Pirrelli Alternate Auditor INDEPENDENT AUDIT FIRM Deloitte & Touche S.p.A. 4

5 RESULTS OF THE DADA GROUP IN ACCORDANCE WITH IAS/IFRS 1 ACCOUNTING STANDARDS Consolidated Results (3 months) (millions of Euro) 30/09/ 30/09/2004 Revenues Gross operating margin Depreciation & amortization Operating Result Group net result Consolidated Results (9 months) (millions of Euro) 30/09/ 30/09/2004 Revenues Gross operating margin Depreciation & amortisation Operating Result Group result international accounting standards The comparative figures at September Consolidated balance sheet as at September 30, (millions of Euro) 30/09/ 31/12/2004 Net working capital Net Capital employed Shareholders' Equity Short-term net financial position Number of employees , 2004 and December 31, 2004 were reclassified and adjusted in accordance with 5

6 INTRODUCTION The consolidated quarterly report at September 30, was prepared in accordance with the provisions of the International Accounting Standard No. 34 Interim Reporting (IAS 34) and, in relation to the accounting principles, in accordance with IAS/IFRS issued by the IASB and standardised by the European Union as per article 81 of the Issuers Regulations No , issued by Consob on May 14, 1999, and subsequent amendments. For comparison purposes the figures for the previous periods were also prepared in accordance with IAS/IFRS. For a full analysis of the effects deriving from the first application of these standards reference should be made to Attachment 2 of the half-year report at June 30, IFRS/IAS transition to international accounting standards. This document reports the reconciliation statements on the data in accordance with the Italian and international accounting standards, and the explanatory notes to illustrate the main differences. It is also noted that the present quarterly report was prepared taking into consideration the current accounting standards at the date of their preparation. It is possible that new versions or interpretations of the IFRS will be issued, with retrospective effect, before the publication of the financial statements relating to the year. This will be the first complete financial statements prepared by the Group in accordance with IFRS. If this occurs, therefore, it is possible that there will be an effect on the data presented in the first IFRS half-year report and in the reconciliation statements prepared in accordance with IFRS 1. Consolidation principles The present quarterly report includes the quarterly results of the Parent Company Dada S.p.A. and of the companies it controls as at September 30,. Based on the accounting standards applied the control of a company is when the company has the power to determine financial and operating policies of a company so as to benefit form its activities. The results of companies acquired or sold during the year are included in the consolidated income statement from the date of acquisition until the date of sale. Where necessary, adjustments are made to the financial statements of subsidiaries in order for uniform Group accounting policies. All the significant operations undertaken between the companies of the Group and the relative balances are eliminated in the consolidation. The minority share interests in the subsidiaries consolidated are recorded separately in the shareholders equity. This minority interest is determined based on the percentage held in the fair value of the assets and liabilities recorded at the original acquisition date (see below) and in the changes in shareholders equity after this date. After the initial recording, the losses attributable to the minority shareholders exceeding the shareholders equity pertaining to them are allocated to the Group shareholders equity except where the minority shareholders have a binding obligation and are capable of making further investments to cover the losses. With respect to the end of 2004, Dadamobile Inc. is included in the consolidation area. In addition, for the company Ad Maiora only the income statement was fully consolidated at September 30,, and the valuation of the investment was aligned to the disposal value. In relation to this reference should be made to page 12. 6

7 . The consolidation scope for the period is shown below: Consolidation Scope At September 30, At June 30, At March 31, Values in: Euro/000 Perc. held Consol. period Dada S.p.A. (FI) Parent Jan-Sept company Ad Maiora S.p.A. (RM) 60.00% Jan-Sept PlanetCom S.p.A. (MI) 50.00% Jan-Sept Register S.p.A. (BG) 97.04% Jan-Sept Softec S.p.A. (Pistoia) 50.00% Jan-Sept - WebNet S.r.l. (FI) Jan-Sept % indiretta - Business Jan-Sept Engineering S.r.l (PT) % indirect Share Consol. Perc. held capital period Jan-June 2,692 Parent company % % 1, % % % % Jan-June Jan-June Jan-June Jan-June Jan-June Jan-June Share Consol. Perc. held capital period Jan-Mar 2,692 Parent company % % 1, % % % % DadaMobile S.p.A. Jan-Sept Jan-June % 10, % 10, % (FI)** - Clarence S.r.l. Jan-Sept Jan-June % % % (FI) indirect - DadaMobile Inc. Feb -Sept Feb -June % % (NY USA) indirect **Concento S.p.A. changed its name to DadaMobile S.p.A. on February 4, Jan -Mar Jan -Mar Jan -Mar Jan -Mar Jan -Mar Jan -Mar Jan -Mar Jan -Mar Share capital 2, , ,

8 INFORMATION ON OPERATIONS Dear Shareholders, An analysis of the principal economic results of the Dada Group in the third quarter of is provided below, together with a comparison with the previous year: Consolidated reclassified Income Statement for the quarter: Amounts in Euro/thousand Sept 30, 05 Sept 30, 04 DIFFERENCE Amount % of Amount % ofabsolute percent. total total Net Revenues 16,445100% 12,006100% 4,439 37% Changes in inventory and increases for internal work capitalised 502 3% 290 2% % Service costs and other operating costs -11,025-67% -8,669-72% -2,356 27% Personnel costs -2,811-17% -2,236-19% % Gross operational margin 3,111 19% 1,391 12% 1, % Depreciation & amortization % % % Non-recurring income(charges) 293 2% -62-1% % Provisions and write downs % -71-1% % Operating Result 2,343 14% 507 4% 1, % Investment income 101 1% 25 0% % Financial income and charges -70 0% -60 0% % Total result 2,374 14% 472 4% 1, % Income taxes % % 38-7% Pre-tax result 1,859 11% -81-1% 1,940 Minority interest share 81 0% 12 0% % Group net profit 1,940 12% -69-1% 2,009 In the third quarter of the DADA Group recorded consolidated revenue of Euro 16.4 million with an increase of Euro 4.4 million (+37%) compared to the same period in the previous year which amounted to Euro 12 million. 8

9 In the first 9 months of the turnover of the Group was Euro 46.4 million compared to Euro 33.5 million in the first 9 months of 2004, an increase of 39%. The Breakdown of the sales by sector reports an increasing percentage in the Consumer Distribution which contributes 66% of the consolidated revenues in the quarter, an increase compared to the third quarter of 2004 and to the second quarter of which accounted for 57% and 63% respectively. In this sector the DADA Group is positioned as leader in the web and mobile entertainment services, achieving important growth rates both in the number of pay subscribers and the number of products launched. The Business Division contributed 22% to the turnover of the group with an increase of 6% compared to the same period in It is recalled that for this division the summer period saw a natural contraction of sales due to the seasonality of its business. The Self Provisioning Division accounted for 12% of consolidated sales and increased its turnover by 14% compared to the third quarter of For further information on the performance of the division reference should be made to the paragraph relating to the description of the business activities of the Group. The consolidated Ebitda in the quarter was Euro 3.1 million (margin of 19% on the consolidated turnover), a considerable improvement compared to the same period in the previous year which amounted to Euro 1.4 million (margin of 11%), thus reporting an increase of 124%. In the first nine months of the Ebitda was Euro 9.4 million while in 2004 the Ebitda was Euro 4.4 million, with an increase of 113%. In the third quarter of the consolidated Ebit was Euro 2.3 million (15% of the consolidated turnover), with an increase equal to 360% compared to the third quarter of 2004 which amounted to Euro 0.5 million. The depreciation and amortisation in the quarter amounted to Euro 0.8 million, in line with the previous year. In the first nine months of the year the Ebit was Euro 7 million compared to Euro 2 million in 2004, with an increase of 250% In relation to depreciation and amortisation, it is recalled that the application of the international accounting standards resulted in a valuation of all of the tangible and intangible assets with particular regard to the valuation of goodwill. Relating to this latter the IAS/IFRS standards established that their value must no longer be amortised, but must be subject to an impairment test on an annual basis. The consolidated pre-tax profit for the third quarter of was Euro 2.4 million, 15% of consolidated revenues, compared to Euro 0.5 million in the same period in the previous year. Positively impacting on this account is the investment income deriving from the interest matured on securities and the liquidity of the Group, and negatively from financial charges in relation to guarantee/financing operations and bank commissions relating to collection services. In the first nine months of this aggregate was a positive amount of Euro 6.9 million while in the same period in 2004 amounted to Euro 1.9 million. The Group net profit in the third quarter of was Euro 1.9 million, equal to 12% of consolidated sales, compared to a loss of Euro 0.1 million in the third quarter Included in this result are income taxes of Euro 0.5 million, related to Irap taxes on all of the companies of the Group. It is recalled that the Group has fiscal losses of Euro 75 million of which Euro 46 million may be carried forward indefinitely. Results of the Parent Company DADA S.p.A.: in the third quarter of DADA S.p.A. recorded a similar result to that at Group level. Total sales amounted to Euro 32.7 million with an increase of 85% compared to the same period in the previous year. 9

10 In the third quarter alone sales amounted to Euro 11.0 million, a strong increase compared to Euro 6.4 million in The Ebitda was Euro 6.9 million, a considerable improvement compared to the previous year which amounted to Euro 0.8 million. In the third quarter of the Ebitda was Euro 2.3 million compared to Euro 0.1 million in the third quarter of The Ebit at September 30, was Euro 4.0 million, equal to 13% of turnover. The figures of the parent company were prepared in accordance with Italian accounting standards. A summary of the principal consolidated balance sheet accounts of the Dada Group are shown below compared with December 31, 2004: Reclassified consolidated balance sheet Amounts in Euro/thousands Sept 30, 05 Dec 31, 04 DIFFERENCE Amount Amount Absolute percent. Fixed assets (A) (*) 19,373 17,979 1,394 8% Current assets (B) 31,545 25,952 5,593 22% Current liabilities C -30,153-25,018-5,135 21% Net working capital (D) = (B)-(C) 1, % Employee leaving indemnity provision (E) -1,401-1, % Provision for risks and charges (F) , % Net capital employed (A+D+E+F) 18,633 16,311 2,322 14% Medium-long term payables -1,892-2, % Net equity (G) -38,362-31,484-6,878 22% Short-term bank debts % Short-term securities and financial receivables 9,640 9, % Cash and banks 12,488 9,552 2,936 31% Short-term net financial position 21,621 17,995 3,626 20% (*) The deferred tax assets which are expected to be utilised in the short-term were reclassified under short-term assets The short-term Consolidated Net Financial Position at September 30, was a positive amount of Euro 21.6 million, compared to Euro 18 million at December 31, 2004 and Euro 24.7 million at June 30,. During the first nine months of, there was therefore an increase in this figure in absolute terms of Euro 3.6 million, with an increase in percentage terms of 20% on the opening financial position. The total net financial position (that also includes medium/long term sources and uses) amounted to Euro 20.6 million, net of payables to banks and other lenders repayable beyond one year of Euro 1 million. 10

11 The net working capital records a deterioration compared to June 30, and compared to December 31, 2004 due to the investments made for the launch of the products in the Consumer Division in some overseas countries. In relation to this it is recalled that this type of activity results in a financial management, at least in the initial phase, characterised by important temporary difference between the average period of payments and receipts. As a consequence it is considered that the increase in the net working capital will also continue in the final quarter of. The changes in the principal balance sheet accounts are due to the natural increase related to the increased activity of the DADA Group both in terms of sales and current spending. Within the composition of the individual working capital accounts, it is noted that a significant part of the trade receivables are concentrated on a limited number of high credit rating clients. In particular, approximately 50% of the total value of the Group receivables are due from telephone operators which generate the majority of the revenues from payment services in the Consumer Division, that as previously reported, have increased significantly in recent months. The table below shows the Consolidated Cash Flow for the period: Amounts in Euro/thousand Sept 30, 05 Sept 30, 05 (3 months) (9 months) Cash flow from operating activity 2,008 7,790 Cash flow from investing activity -5,021-6,623 Cash flow from financing activity -94 2,460 Net cash flow for the period -3,107 3,627 In the first nine months of the Dada Group recorded positive cash flow totalling Euro 3.6 million of which Euro 7.8 million from operating activity and Euro 2.5 million from financing activity (consisting of the share increase deriving from the exercise of stock options and from the sale of treasury shares). Utilisation of resources amounted to Euro 6.7 million and related to the investment activity of the Group. The positive operating cash flow permitted the DADA Group to fully self-finance investment activities in the period. In the third quarter the Group cash flow was a negative amount of Euro 3.1 million, resulting from the difference between the operating cash flow, positive for approximately Euro 2 million, and the cash flow from investment activities, negative for Euro 5 million. This latter figure was principally impacted by the investment made in July for the purchase of a further quota in the company Register.it for a total value of Euro 5 million. The purchase by DADA will be made in cash for a total of Euro 3.3 million, of which Euro 800 thousand has been paid, while the remaining Euro 2.5 million will be paid in 2006 in 12 monthly instalments. The purchase of treasury shares by Register.it was made for a total cash amount of Euro 1.7 million. Also impacting investment activities were the purchase of tangible fixed assets for the renewal of the technical structure of approximately Euro 200 thousand, and the expenses for the development of new products and services (and other intangible assets ) of approximately Euro 600 thousand. The positive cash flow of this aggregate relates to the disposal of financing activities and income from investments. 11

12 Other Information In execution of the Group rationalisation and focalisation plan, DADA S.p.A. on September 30, formalised the preliminary contract for the sale of the investment held in the subsidiary Ad Maiora S.p.A., equal to 60% of the share capital; the sale is to the current minority shareholders of the company or a vehicle company incorporated by them and will be completed by November, against a cash payment in favour of DADA S.p.A amounting to Euro 1.3 million. This disposal generated a gain of Euro 470 thousand. The number of personnel in the Dada Group at September 30, was 225, of which four Executives, while at December 31, 2004 the number of personnel was 229 and at September 30, 2004 the number was 219 (of which four executives). THE ORGANISATION STRUCTURE OF THE DADA GROUP Compared to the disclosure of information in the previous quarters the on-line revenue advertising and interactive marketing are allocated to the Consumer Division. Consequently the data relating to the previous quarters have been reclassified. The secondary level, is identified as the geographic areas. Segment results are shown gross of intra-divisional transactions. Furthermore, compared to the Group s consolidated operating result, common costs have not been included. The following tables show the segment consolidated revenue and income statement. The Business Units of the DADA Group are comprised of the Consumer Division, Business Division and the Self-Provisioning Division. Two of these Divisions the Consumer Service and the Business Service are managed by the Parent Company, while the Self-Provisioning Division is managed by Register.it S.p.A.. The Consumer Division includes the subsidiary companies Dadamobile S.p.A., Clarence S.r.l., Wireless Solutions S.p.A., and Clamm S.r.l. (these were incorporated into Dada S.p.A, on July 28, ) while Softec S.p.A., Planetcom S.p.A and Ad Maoira S.p.A. are part of the Business division. The revenue sources of the Consumer Division are shown below: o Revenues from VAS (Value Added Services): this concerns services that are provided against a payment by the final user of a fee that may be for consumption or subscription; o On-line advertising on own portals, interactive marketing and connectivity. During, there was a strong demand in the product/services of DADA available through micro browsing, or rather access to the internet via mobile: this tendency demonstrates how the increased penetration on the internet market and the latest generation mobile phones, capable of offering users a full experience and speed in terms of access to the Internet, can be translated into an expansion of the 12

13 market of value added services (VAS), which currently constitutes the core of the DADA offer. With reference to the supereva.com portal, a new version was launched in the first half of the year that contains the most important messaging and community applications in a single environment available in three distinct areas Friends, Work and Love with the Social Network logic. In the first half-year of, the Supereva.com community reached 1,500,000 users registered and the service was confirmed as number one in Italy in the category Personals (Nielsen Net Ratings). Boosted by Italy s rapid development in the area of value added services, during the period in question, DADA began a strong drive towards internationalisation by means of localising mobile phone supply on the UK, German and US markets. In the Net Marketing sector, DADA is promoting itself as a partner capable of directing Internet traffic towards business activity sites or portals that can thus increase earnings from their own models. The revenue sources of the Business Division are shown below: o Revenues from the development of Web projects; o Revenues from the design and realisation of infrastructures. In the development of technological applications, DADA has adopted a unique business model of its kind, the premise of which is the internal development and ownership of the technological platforms that are tested and experimented on the network of portals and then packaged and offered to large Italian and multinational companies for their e-business projects. On one hand, this approach allows for a high quality and flexible offer, and on the other, it permits the achievement of a greater margin compared to the sale of solutions of third parties. Sources of revenue in the Self Provisioning Division result from domain registration, payable and hosting services or to be more precise, services with automatic supply and provision mainly directed at SME s. The year saw Register.it concentrated on the expansion of its clientele through online marketing campaigns: in the first six months of over 40,000 new domains were registered (31,000 in 2004) and over 9,200 new clients were acquired (+40% compared to the first half of 2004). Loyalty of existing clients: over 57,000 domains were renewed, with an average renewal rate of 74%, compared to 68% in In, the domain and hosting market in Italy achieved slight growth compared to 2004, with a much lower number of registrations when compared with the main European and completely liberalised markets; which have little or no bureaucracy to overcome, for example in Germany or in the United Kingdom. In Italy new monthly domain registrations can be estimated between 30,000 and 35,000, while in the UK or Germany they easily surpass the 150,000 mark (Source: analysis Register.it from data by the Authorities). 13

14 Break Down of consolidated sales in the three divisions Description 30/09/ 30/09/2004 Amount % on total Amount % on total Consumer Services 11,211 66% 6,829 57% Business Services 3,809 22% 3,578 30% Self Provisioning 1,825 12% 1,599 13% Intra-divisional revenues Consolidated Revenues 16, % 12, % The percentages are calculated based on the sales figures of the three divisions gross of intra-divisional revenues 70% 60% 50% 40% 30% 20% 10% 0% 66% 57% 30% 22% 12% 13% 30/06/ (6 months) 30/09/2004 (9 months) Consumer Services Business Services Self Provisioning Services 14

15 Results of the three divisions in the third quarter 30/09/ (three months) Segment information Consumer Business Self. Prov. Adjustmen Services Services services ts Consolidated Revenues- third parties Italy 8,938 3,486 1,748 14,172 Revenues- third parties Foreign 2, ,272 Revenues inter-sector Net revenues 11,211 3,809 1, ,444 Increases for fixed assets of internal work Service costs -7,789-2, ,092 Personnel costs -1,257-1, ,356 Segment Ebitda 2, ,498 Segment ebitda / Sales 23% 7% 40% 21% Depreciation & amortization Segment Ebit 2, ,752 Segment ebit / Sales 19% 2% 33% 19% Corporate depreciation & amortisation -85 General expenses not allocated -324 Operating result 2,343 Consumer Services: the division ended the third quarter with the total sales of Euro 11.2 million, compared to Euro 9.7 million in the previous quarter and Euro 6.8 million in the third quarter of 2004 thus registering percentage increases of 15% and 65% respectively. It is underlined, in particular, that in the third quarter the international activity saw important increases in turnover, consisting of 20% of the total revenues of the division and approximately 14% of the consolidated net revenues of the Group. As already described, the increase in turnover is due in particular to the value added payment services via web and mobile. This increase in the sales, together with an important reduction in fixed and general costs, has resulted in an important increase in margins in the Consumer Division. The EBITDA increased from Euro 0.5 million in the third quarter of 2004 (7% of the division turnover) to Euro 2.5 million in the third quarter of (23% of the division turnover). The Ebit in the sector was Euro 2.1 million (19% of the division sales) after depreciation and amortisation of Euro 0.4 million. In the third quarter of the previous year the Ebit was Euro 0.2 million. In relation to the depreciation and amortisation the previous considerations apply in relation to the impact of the international accounting standards. The contribution of the Consumer Division to the total consolidated results continues to increase, with the turnover in the third quarter representing 66% of the consolidated net revenues of the Group while amounting to 80% of the Group Ebitda and 75% of the Group Ebit. 15

16 The results in the Consumer Division for the entire period of are as follows: sales of Euro 30.6 million (Euro 17.2 million in the first nine months of 2004), EBITDA of Euro 7.1 million (Euro 1.6 million in the first 9 months of 2004), Ebit of Euro 5.9 million (Euro 0,5 in 2004). Business Services: the Business division ended the third quarter of with a turnover of Euro 3.8 million, an increase of 7% compared to the third quarter of 2004 which amounted to Euro 3.5 million. This increase relates in equal measure to the product lines in the sector. It should be noted that the third quarter in this division is negatively impacted by the seasonal trend of some business lines. The Ebitda amounted to Euro 0.3 million, in line with the result in the previous year. The Ebit amounted to Euro 0.86 million after amortisation and depreciation of approx. Euro 0,2 million. In the first half of the previous year this amounted to Euro 0.62 million. In relation to the depreciation and amortisation the previous considerations apply in relation to the impact of the international accounting standards. Self Provisioning Services: The sales in the Self Provisioning Division in the third quarter of amounted to Euro 1.8 million, an increase of 12% compared to the previous year which amounted to Euro 0.6 million. There was a similar increase in the margins which amounted to Euro 720 thousand and equal to approximately 40% of the turnover. The Ebit in the sector amounted to Euro 580 thousand (32% of the division sales) after depreciation and amortisation of Euro 140 thousand. In the third quarter of the previous year the Ebit was Euro 0.4 million. In relation to the depreciation and amortisation the previous considerations apply in relation to the impact of the international accounting standards. The Self Provisioning Division also recorded deferred revenues in the third quarter of Euro 3.7 million. SUBSEQUENT EVENTS TO THE PERIOD END The figures after the end of the period confirm the trend of the results obtained in the first 9 months of the year. In particular the international activity continues to grow whose benefits are already seen in the quarter just ended and which will have a greater effect in the coming quarters. Florence, November 11, For the Board of Directors The Chairman Paolo Barberis 16

17 CONSOLIDATED BALANCE SHEET OF THE DADA GROUP AS AT SEPTEMBER 30, PREPARED IN ACCORDANCE WITH IAS/IFRS ACCOUNTING STANDARDS ASSETS 30/09/05 31/12/04 (9 months) (12 months) Non-current assets Goodwill 9,508 6,671 Intangible fixed assets 3,985 4,240 Other assets 2,842 2,371 Equity investments in non-consolidated subsidiaries, associated companies and other companies Current financial assets Deferred tax assets 4,476 4,554 total 21,080 18,541 Current assets Inventories Trade receivables 22,252 22,354 Tax receivables and other 7,503 2,934 Financial assets held for trading 9,567 9,194 Cash at bank and in hand 12,488 9,552 total 51,966 44,135 TOTAL ASSETS 73,046 62,676 17

18 CONSOLIDATED BALANCE SHEET OF THE DADA GROUP AS AT SEPTEMBER 30, PREPARED IN ACCORDANCE WITH IAS/IFRS ACCOUNTING STANDARDS LIABILITIES AND SHAREHOLDERS EQUITY 30/09/05 31/12/04 (9 months) (12 months) LIABILITIES AND SHAREHOLDERS EQUITY Capital and reserves Share Capital 2,692 2,664 Share premium reserve 28,085 34,015 Treasury shares - -3,370 Legal reserve Other reserve -6,134-6,334 Retained earnings/accumulated losses 7,480 4,349 Net profit/(loss) for the period 5,405-2,725 Total Group shareholders equity 37,934 29,005 Minority interest share 428 2,479 Total Shareholders Equity 38,362 31,484 Medium/long term liabilities Bank loans (beyond one year) 1,147 2,430 Provisions for risks and charges 731 1,271 Employee leaving indemnity 1,401 1,331 Other payables beyond one year total 4,024 5,422 Current liabilities Trade payables 18,448 16,927 Other payables 9,094 6,726 Taxes payable 2,611 1,366 Bank overdrafts and loans (within one year) total 30,660 25,770 TOTAL LIABILITIES & SHAREHOLDERS EQUITY 73,046 62,676 18

19 CONSOLIDATED INCOME STATEMENT OF THE DADA GROUP AT SEPTEMBER 30, PREPARED IN ACCORDANCE WITH IAS/IFRS ACCOUNTING STANDARDS 30/09/05 30/09/04 (9 months) (9 months) Net Revenues 46,379 33,485 Cost of raw materials and consumables Changes in inventory and increases for internal work 1, capitalized Service costs and other operating costs -29,814-23,568 Personnel costs -8,053-6,535 Other operating charges Provisions and write downs Depreciation and amortization -2,258-2,124 Operating Result 6,934 1,969 Investment income Other income and financial charges Financial expense Pre-tax result 6,928 1,883 Income taxes -1,395-1,658 Net result 5, Minority interest share Group net result 5, Profit per share Diluted profit per share

20 CONSOLIDATED INCOME STATEMENT OF THE DADA GROUP FOR THE QUARTER AS AT SEPTEMBER 30, PREPARED IN ACCORDANCE WITH IAS/IFRS ACCOUNTING STANDARDS 30/09/05 30/09/04 (3 months) (3 months) Net Revenues 16,445 12,006 Cost of raw materials and consumables Changes in inventory and increases for internal work capitalised Service costs and other operating costs -10,637-8,707 Personnel costs -2,811-2,236 Other operating charges Provisions and write downs Depreciation & amortisation Operating Result 2, Investment income Other income and financial charges Financial expense Pre-tax result 2, Income taxes Net result 1, Minority interest share Group net result 1, Profit per share Diluted profit per share

21 CONSOLIDATED CASH FLOW OF THE DADA GROUP AS AT SEPTEMBER 30, PREPARED IN ACCORDANCE WITH IAS/IFRS ACCOUNTING STANDARDS Amounts in Euro/thousand 30/09/05 (9 months) Operating assets Result for the period 5,405 Adjustments for: Investment income Financial expenses 170 Income taxes 1,395 Depreciation of tangible assets 667 Amortisation of other intangible assets 1,590 Other provisions 337 Gains from disposal of plant and machinery and investments -401 Increases/ (decreases) in provisions -525 Cash flows generated from operating activities before changes in working capital Increase in inventories ,369 (Increase)/ decrease in receivables -4,191 Increase in trade payables 3,837 Cash flow generated from operating activities 7,960 Interest paid Net cash flow generated from operating activities 7,790 Investment activities Interest received 269 Sales of holdings in subsidiary and associated companies 103 Purchase of tangible fixed assets -1,138 Purchase of financial assets for trading 333 Acquisition of other intangible assets (goodwill) -4,888 Product development costs -1,302 Net Cash flow generated from investment activities -6,623 Financing activities Dividends from subsidiaries Repayment of loans Payments deriving from share capital increases 3,397 Other changes 31 Net Cash flow generated from financing activities 2,460 Net increase/(decrease) in cash and cash equivalents 3, Cash and cash equivalents at beginning of the period 17,994 Cash and cash equivalents at 30/09/05 21,621 21

22 RECONCILLIATION STATEMNT OF THE BALANCE SHEET AT 30/09/2004 DADA GROUP BALANCE SHEET 30/09/04 30/09/04 Amounts in Euro/thousand Italian Accounting Standards Reclass. Adjustments IAS/IFRS accounting standards ASSETS Fixed assets Property, plant and equipment 2, ,267 Goodwill 6,215 2,241 8,456 Intangible fixed assets 6, ,931 4,111 Equity investments in associated companies and other companies 1,187 1,187 Current financial assets Deferred tax assets 4, ,305 total 20, ,012 21,948 Current assets Inventories Trade receivables 19, ,557 Tax receivables and other 2,061 1,607 3,668 Financial assets held for trading 15,047-1,456 13,591 Cash at bank and in hand 5,580 5,580 Prepaid expenses and accrued income 1,607-1,607 0 total 43,969-1, ,416 TOTAL ASSETS 64,905-1, ,364 LIABILITIES AND SHAREHOLDERS EQUITY Capital and reserves Share Capital 2, ,664 Share premium reserve 32,559 1,456 34,015 Treasury shares 0-3,306-3,306 Legal reserve Other reserve 1,456-1,456 0 IAS reserve 0-6,334-6,334 Retained earnings/accumulated losses ,162 4,349 Net profit/(loss) for the period -3,991 3, total 32,281-1, ,682 Minority interest share 2,476 2, Total Shareholders Equity 34,757-1, ,248 Medium/long term liabilities Bank loans (beyond one year) 1, ,444 Provisions for risks and charges 1,757 1,757 Employee leaving indemnity 1, ,292 Other payables beyond one year 1,375 1,375 total 5, ,868 Current liabilities Trade payables 15,016 15,016 Other payables 2,214 2,214 Taxes payable 1,581 3,958 5,539 Bank overdrafts and loans (within one year) 1,479 1,479 Accrued expenses and deferred income 3,958-3,

23 total 24, ,248 TOTAL LIABILITIES & SHAREHOLDERS EQUITY 64,905-1, ,364 RECONCILLIATION STATEMENT OF THE INCOME STATEMENT AT 30/09/2004 DADA GROUP INCOME STATEMENT 30/09/04 30/09/04 Amounts in Euro/thousand Italian Accounting Standards Reclass. Adjustments IAS/IFRS accounting standards Net Revenues 33,485 33,485 Cost of raw materials and consumables Change in inventory and increases for internal works Service costs and other operating costs -23, ,568 Personnel costs -6, ,535 Other operating charges 0 0 Non-recurring revenues/(charges) Provisions and write downs Depreciation & amortisation -4,542 2,418-2,124 Amortisation of goodwill -2,241 2,241 0 Operating Result -2, ,835 1,968 Investment income Other income and financial charges Financial charges Extraordinary income/(charges) Pre-tax result -2, ,842 1,882 Income taxes ,658 Net result -3, , Minority interest share Group net result -3, ,