FIRST QUARTER IN LINE WITH EXPECTATIONS, SHOWING THE EFFECTS OF STRENGTHENING AND PRODUCT INNOVATION ACTIONS CARRIED OUT OVER THE PAST FEW YEARS:

FORECASTS FOR 2007 CONFIRMED:

THE NEW 2008-2010 STRATEGIC PLAN WILL BE PRESENTED TOMORROW IN MILAN AND ON 14 MAY IN LONDON. 

 

Milan, May 10, 2007 – During today’s meeting, the Seat PG S.p.A. Board of Directors, chaired by Enrico Giliberti, has approved the first quarter results as of March 31, 2007, as presented by Chief Executive Officer Luca Majocchi.

 

The main results achieved by the Group at the end of the first quarter 2007 are disclosed below. They show the first positive signs arising from the reorganisation and innovation process implemented by the Company over the past few years, which are leading the Group towards a period of sustainable growth.

 

Revenue Performance

 

Consolidated revenues amounted to € 175.9 million in Q1 2007, up 3.9% on a like-forlike basis (the publication of the Turin print directory and of two Thomson Local directories was postponed). In detail:

EBITDA Performance

 

Operating result before depreciation, amortisation, net non-recurring and restructuring costs (EBITDA), was positive at € 11.6 million (positive at € 10.0 million in Q1 2006) and showed an increase of approximately € 24 million compared to the same period of the previous year, based on a constant number of directories published.

 

Performance of Operating Income (EBIT)

 

Operating result (EBIT) was negative at € 39.7 million, substantially in line with the figure for the previous year (negative at € 38.8 million). Its performance is similar to the EBITDA performance.

 

First Quarter Result

 

Net result improved to a reduced loss of € 77.2 million (negative at € 102 million in Q1 2006), which is attributable to the business seasonality.

 

Net financial debt

 

Net financial debt amounted to € 3,342.9 million, down € 62.9 million compared to € 3,405.8 million at 31 December 2006. Average cost of debt amounted to 6.25%, compared to 5.9% in the first quarter of 2006, despite the markedly higher increase in Euribor (from 2.48 to 3.72%).

 

Seat continued to show its ability to generate liquidity, making an early repayment of € 104.2 million in February 2007 and € 25 million in April 2007, of which € 79.2 million falling due in June 2007, and the remainder in June 2013.

 

Performance of operating cash flow

 

In Q1 2007, the Group generated an operating cash flow amounting to € 118.3 million (€ 107.0 million in Q1 2006), thanks to the reduction in working capital to € 116.7 million for the three-month period.

 

 

MAIN COMPANIES OF THE SEAT PAGINE GIALLE GROUP

 

SEAT PG S.p.A.

 

Revenues increased by 11.5% to € 112.7 million, like for like (publication of the Turin print directory shifted to April 2007).

 

A breakdown of revenues is provided below:

 

Operating result before amortisation, depreciation, net non-recurring and restructuring charges (EBITDA), amounting to € 9.8 million (€ 22.4 million in Q1 2006), increased by € 8 million on a like for like basis compared to Q1 2006. This improvement was achieved thanks to further efficiencies, as year 2006 had been negatively influenced by high advertising investments to support the launch of the 12.40 Pronto PAGINEBIANCHE service.

 

 

THOMSON

 

Revenues of the Thomson Group were € 19.4 million (€ 20.8 million in Q1 2006), down 6.7% compared to Q1 2006, due to the shift in publication of two directories to the coming months. Like-for-like revenues were virtually in line with those for Q1 2006, in a highly competitive market.

 

EBITDA improved from a negative € 9.7 million in Q1 2006 to a positive figure of € 6.8 million, thanks to the efficiencies achieved on technical production costs and lower advertising investments.

 

 

TELEGATE

 

Revenues of the Telegate group amounted to € 44 million (€ 47.2 million in Q1 2006). Revenues in Germany and Spain were substantially stable, whereas revenues in Italy increased 60% thanks to the good performance of calls to the services 89.24.24 Pronto PAGINEGIALLE and 12.40 Pronto PAGINEBIANCHE. Revenues in France decreased; it must be noted that results achieved in France for Q1 2006 included € 9.5 million revenues from outsourced services provided to SFR & Bouygues Telecom, an activity marked by very low profitability, which ended in April 2006 following the deregulation of the French market.

EBITDA grew sharply to € 11.1 million (negative at € 0.6 million in Q1 2006), thanks to the significant reduction (-50.3%) in advertising investments, especially in France where after one year from the start of deregulation, the market is entering a phase of increased stability and maturity.

 

 

OUTLOOK FOR 2007

 

In the first months of 2007, the positive results of the strengthening and innovation actions carried out in 2005 and 2006 became visible.

 

In Italy, revenue performance was positive, driven by the growth in the online and voice services, and by the turnaround in print products. The latter are expected to complete the turnaround that started in the second half of 2006.

 

With reference to international operations, Telegate expects to achieve an increase in EBITDA, following the major investments made in 2006 to enter the French market.

EBITDA is expected to improve during the year, though the market situation is not yet

stable.

 

Against this background, the Group confirms the forecasted EBITDA growth between 10% and 12% compared to 2006, driven by the revenue increase in Italy and the recovery of Telegate. Free cash flow is expected to reach approximately € 300 million.

 

As part of the plan envisaging strategic investments to support Seat's online platform,the Board of Directors decided to set up a company, with Luca Majocchi as Chairman; its mission will be to acquire both technology and know-how, mainly by making equity investments in companies specialising in web-based activities that are of strategic interest for Seat.

 

 

PRESENTATION OF THE NEW STRATEGIC PLAN FOR THE 2008-2010 PERIOD

 

Tomorrow in Milan and on 14 May in London, the management of Company will present the new Strategic Plan for the 2008-2010 period, approved today by the Board of Directors of the Company. The Plan will outline the future strategic guidelines of the Group for a sustainable growth driven by our multimedia services.

 

This press release is a translation, the Italian version will prevail.