The Board of Directors approves the consolidated financial results as of March 31, 2012
CONSOLIDATED REVENUES AT €206.5 MN (-7.1%)
NET PROFIT AT €10.1 mn
indebtedness reduced to €91.6 mn (€ 110.2 mn at end of year 2011)
Espresso Group financial results as of march 31 2012
Consolidated data (€mn) | Jan-Mar 2011 | Jan-Mar 2012 | Delta 2012/2011 |
Revenues, of which: | 222.2 | 206.5 | -7.1% |
· Circulation | 64.6 | 64.1 | -0.7% |
· Advertising | 127.6 | 120.8 | -5.3% |
· Add-on products | 23.6 | 14.0 | -40.9% |
· Other | 6.3 | 7.6 | +19.4% |
Gross Operating Profit | 36.8 | 29.6 | -19.5% |
Operating Profit | 27.6 | 20.5 | -25.8% |
Pre-tax Profit | 23.8 | 17.5 | -26.6% |
Net Profit | 13.1 | 10.1 | -23.2% |
(€mn) | December 31 2011 | March 31 2012 |
Net Financial Position | (110.2) | (91.6) |
Shareholders’ Equity including | 565.0 | 576.5 |
· Shareholders’ Equity | 563.3 | 574.7 |
· Minority interests | 1.7 | 1.7 |
Employees | 2,673 | 2,644 |
Rome, April 23, 2012 – The Board of Directors of Gruppo Editoriale l’Espresso S.p.A. met today in Rome under the Chairmanship of Carlo De Benedetti, and approved the consolidated financial statements as of March 31, 2012.
MARKET OUTLOOK
The deteriorated economic scenario, which definitely reveals a recession phase and great uncertainty for the future, heavily rebounds on the publishing sector.
Advertising investments are experiencing sharp contraction: the first two months of year 2012 have recorded a 5.7% downturn with respect to the corresponding period of year 2011 (Nielsen Media Research).
All the traditional media have recorded a negative performance – though scarcely relevant, as it regards only the first two months of the year. The print sector has suffered a 7.1% downturn, which for TV and radio has been equal to 6.9% and 5.1%, respectively. In contrast, the Internet advertising revenues are experiencing a positive performance having increased by 12.3%.
More specifically, as far as print media are concerned, daily newspapers advertising revenues have recorded a 5.3%, contraction, that is -4,7% in paid newspapers, and -24.5% in free press; periodicals have suffered a markedly more severe -11% decline.
In terms of circulation, the only available data (Fieg) on daily newspapers show a 6.3% downturn in circulation revenues as a whole.
Comments on the Espresso Group results in the first quarter of year 2012
The Group’s consolidated net revenues is equal to €206.5mn, decreasing by 7.1% with respect to the first quarter of year 2011 (€222.2mn). This downturn can – to a large extent -be ascribed to the performance of add-on products, which had been extraordinarily favorable over the first quarter of year 2011.
Net of add-on products, downturn would have reached 3%.
Net of revenues from add-on products, circulation revenues amount to €64.1mn, basically in line with the corresponding period of the previous year; downturn in circulation revenues has been offset by the sale price increase applied to almost all the Group’s titles.
Advertising revenues, equal to €120.8mn, have recorded a 5.3% decline during the first quarter of year 2011, in a market which experienced a 5.7% downturn in February.
In the various sectors, the performance reflects the general trend of the market: the print and the radio sectors have recorded losses equal to 8.5% and 5.2%, respectively.
In contrast, advertising sales in the Internet have realized a very positive evolution, recording a 16% increase and confirming – even in such particularly unfavorable general situation –the brilliant dynamic trend of the latest years.
Revenues from add-on products amount to €14mn, heavily decreasing (-40.9%) with respect to the corresponding period of year 2011; this poor performance reflects, on the one side, the generalized depression which affects consumer spending and, on the other side, the particular success achieved by the initiatives taken during the first quarter of the previous year.
Other revenues, equal to €7.6mn, have increased by nearly 20% with respect to the first quarter of year 2011, thanks to the increased renting of digital terrestrial television band, and to the positive growth of subscriptions to digital products.
Total operating costs have recorded a 2.7% decrease, mainly due to the new staff reduction plans implemented in the course of year 2011.
The consolidated Gross Operating Profit amounts to €29.6mn, decreasing by 19.5% with respect to €36.8mn of the first quarter of year 2011; net of add-on products, Gross Operating Profit would stay steady.
The consolidated Operating Profit amounts to €20.5mn, decreasing by 25.8% vis-à-vis €27.6mn of the corresponding period of the previous year.
The consolidated Net Profit has reached €10.1mn, as compared to €13.1mn of the first quarter of year 2011.
The consolidated net financial position has further improved, from -€110.2mn of end of year 2011 to -€91.6mn as of March 31, 2012, with a financial surplus of €18.6mn.
The Group staff – including term contracts – has decreased to reach 2,644 employees at the end of March that is -29 people with respect to December 31, 2011. The average staff of the period is 4.8% lower with respect to the first quarter of year 2011.
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Alessandro Alacevich, Central Director of Finance and Administration, Manager in charge of drafting corporate and accounting records, pursuant to subparagraph 2 article 154bis of Testo Unico della Finanza (Finance Consolidation Act) states that the accounting information included in this press release corresponds to the documented results, the books and the accounting records.
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Subsequent events and outlook
In view of the general economic framework and negative short and medium term perspectives, the recent market performance of the first quarter of the year will most likely persist – in particular as regards advertising sales – and, presumably, further deteriorate over the second quarter of the year, being mitigated in the second part of the year, when it will face the second half of year 2011 which was already showing its weak side.
Despite all the foregoing, the Group has closed the first quarter with a significantly positive result and is confirming positive expectations through the rest of the year, even if markedly declining with respect to year 2011.
Moreover, the structural nature of the ongoing crisis requires the Group to adopt additional measures aimed at safeguarding its economic soundness over the short and medium term.
