by Federico De Rosa
Lorenzi: “We’ve got things in order, now let’s grow abroad too”
The company has been digging trenches and laying cables for over 90 years. But on this occasion it risked going under itself. Financial mismanagement and a leveraged buyout, an acquisition through debt, which left a burdensome legacy, put Sirti in serious difficulty. After three years of restructuring, which began with access to ‘cassa integrazione’ (wages guarantee fund) for one thousand employees and the declaration of a state of crisis, the ‘process finally reached a conclusion’, states Stefano Lorenzi, the Chief Executive Officer of Sirti from 2011, a historical brand name of the Italian telecommunications industry. Over the last three years, turnover has rose by 10% per annum and EBITDA by 12%. Combined with an increase in orders, this has allowed the reintegration in the company of one thousand ‘cassaintegrati’ (employees temporarily laid off). The company remains saddled with almost EUR 300 million of net debt, but, in particular, a composite shareholder structure in which private equity funds co-exist with so-called ‘mezzanine’ funds and with Intesa Sanpaolo, the first shareholder and also the first creditor. “The priority was to get our house in order – explains Mr. Lorenzi -. When I arrived, I found a rather difficult situation, also due to the financial problems. Moreover, there was an infrastructural crisis in the telecommunications world, which, however, now appears to have stabilised”. In recent years, Sirti has reinvented itself, by broadening its scope of activities from the plant engineering of networks to the development of engineering services and solutions for telecommunications, transport, energy. It has a customer portfolio ranging from Telecom Italia, to Vodafone and Wind, with whom it signed a 5-year contract worth EUR 1 billion for the 4G network, to RaiWay, Terna and Enel. And it includes contacts in Sweden and Finland. “The market repositioning has been a turning point for us says the Chief Executive Officer -. The growth in revenues has allowed us to return to the leading position in a system which, between direct and satellite activities, employs more than 8,000 people”.
In January, the Board chaired by Angelo Miglietta, assigned Mr. Lazard with the mandate to explore potential growth opportunities based on the three-year plan drawn up by said merchant bank with Roland Berger. The new strategy requires capital and, therefore, a partner. “The feedback is positive – says Miglietta – Sirti can look to the future with a greater sense of serenity. From a business point of view, we are strong again”. Rumours of a potential business combination with Italtel have been circulating on the market for some time. It would make sense from a business standpoint, but the capital is not there, although the prospect of the government’s broadband plan could facilitate the search.
Lorenzi believes that it may be a major driving force for the recovery, but also an accelerator for Sirti. “We’ve already demonstrated – the manager explains – that we are a unique company in Italy. We possess technical expertise and sophisticated systems which provide operators with guaranteed reliability and punctuality. Our engineers are all connected remotely to our company systems, this allows us to constantly monitor the area and instantly take action where required; at the same time, it allows our customers to have real-time visibility of the progress status of activities. It is an operating model that has evolved over decades of experience – Lorenzi goes on to say, which qualifies Sirti to assume the role of chain leader and allows the complexities of country-wide projects to be managed. I don’t hide the fact that more than one company has courted us to have it”.
In order to accelerate the recovery of the digital divide, Lorenzo suggests that we look at all infrastructures, not just the telephone network. “Sharing is extremely important, today networks are managed vertically, and so the telephone, energy and transport worlds do not communicate with one another. We can connect them. Convergence and sharing must be viewed as significant opportunities”.
Corriere della Sera, National edition – page 35 – 09/04/2015
Article taken from the “Corriere della Sera” of 9 April 2015