Espresso group: consolidated net profit grows to 28.6 million euro

“Price sensitive” press release in compliance with the Finance Act and Consob Regulations 

The Board of Directors approves the consolidated financial statements as of first half of 2010.

CONSOLIDATED NET PROFIT AMOUNTS TO € 28,6 MN clear improvement with respect to first half of 2009 (€0,1 mn)

Espresso Group financial statements as of june 30, 2010

(€mn) consolidated data1st Half 20091st Half 2010Δ% 2010/2009
Revenues, of which:449.3445.1-0.9%
·          Circulation132.7130.9-1.3%
·          Advertising246.2264.9+7.6%
·          add-on products61.240.3-34.1%
Gross Operating Profit40.674.7+84.3%
Operating Profit 19.356.7n.s.
Pre-tax Profit10.651.4n.s.
Net Profit0.128.6n.s.
(€mn)June 30 2009December 31 2009June 30 2010
Net Financial Position(249.1)(208.2)(183.9)
Shareholders’ Equity including minority interests488.7495.4525.2
·          Shareholders’ Equity478.3485.6515.4
·          Minority interests10.49.89.8

Rome, July 20, 2010
– 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 the first half of 2010.


In the first half 2010, in an economic context characterized by a very weak and still uncertain recovery, advertising investments have recorded a slight increase. According to the most recent data published by Nielsen Media Research, during the first five months of the year advertising investments as a whole have recorded an increase of 3.8% vis-à-vis the corresponding period of 2009; taken into account that over that period investments had collapsed by 17.5%, this has still to be considered a weak recovery.
Radio, the Internet and TV have been the most dynamic media, increasing respectively by 14.6%, 11.6% and 6%.
In contrast, the publishing sector as a whole confirmed its decline (-3.9%), with different evolutions in the various sectors: while daily newspapers have confirmed their position (-0.7%), with +1.5% in national commercial advertising, periodicals are still recording a severe downward trend (-9.3%).
As regards circulation, the currently available ADS data (moving average of last 12 months up to March 2010, on a consistent perimeter) related to daily newspapers show a decline of 5% in newsstand’s sales, 4.1% in sales of periodicals and 10.1% in monthly magazines.

Comments on the espresso group results over the first half of 2010 The Group’s consolidated revenues in the first half of 2010 are €445.1mn, an amount substantially in line (-0.9%) with the corresponding period of the previous year (€449.3mn). Net of add-on products, the increase in revenues is equal to 4.3%.

Circulation revenues,
net of add-on products, amount to €130.9mn, vis-à-vis €132.7mn recorded in the corresponding period of the previous year.
The performance of circulation revenues, that is not benefiting from any price increase, reflects good resilience of sales of the Group’s titles.
In particular, both la Repubblica and L’espresso recorded slight increases in the newsstand’s sales.
This positive evolution, which has been going on since year 2009, is also reflected in the results of the last Audipress readership investigation; in particular, la Repubblica confirms its position as first Italian daily newspaper with over 3.2 million daily readers, thus leading up its advantage over the second ranking daily newspaper to 11.8%. The local daily newspapers as a whole have recorded 3.5 million daily readers, and L’espresso 2.6 million weekly readers.

Advertising revenues
, equal to €264.9mn, have increased by 7.6% with respect to the first half of 2009.
The Group  radio stations have recorded the most positive evolution (+20.2%): this growth was supported by the concessionaire’s enhanced commercial dynamism and by the good results attained in listenership, in particular as regards Radio Deejay.
Finally, the advertising market in the Internet has recorded highly positive results (+17.6%), thanks also to the particular success of, which in the first half of the year has reached over 1.6 million daily unique users, thus confirming its position as first Italian information website and recording again a remarkable increase over the corresponding period of the previous year (+29%).
Revenues from the publishing sector have resulted basically in line with the first half of 2009.
In all its sectors of activity (Internet, radio and publishing sector), the Group has increased its market shares.

Revenues from add-on products amount to €40.3mn, showing a 34.1% decline with respect to the corresponding period of 2009, the first half-year of which had been characterized by a high concentration of initiatives and therefore of revenues. In a market framework which was definitely recording a severe contraction, the Group decided to focus on a reduced number of initiatives, aiming at protecting the sector profitability.

Total operating costs have been cut by 9.7% with respect to the first half of 2009 and, net of extraordinary charges, recurrent costs have been cut by 7.2%; taking into account the savings already realized in the first half of 2009, the trend of costs is perfectly in line with the goal of the plan, which, as one may recall, envisages an overall 17% cost reduction with respect to year 2008 (reference base for the formulation of the Group’s reorganization plan). This result was attained without reducing the Group’s product perimeter and portfolio of titles and with no damage for their quality.

The Consolidated Gross Operating Profit amounts to €74.7mn (€40.6mn in the first half of 2009) and the  consolidated operating profit amounts to €56.7mn (€19.3mn in the first half of 2009).
Excepting periodicals, all the Group divisions are clearly enhancing their performance. The daily newspapers sector shows a remarkable recovery of profitability thanks to the drastic cost reduction related to the reorganization plans, even if these are not completed yet; the radio and the Internet sectors have benefited from the high increase occurred in revenues.

The Consolidated net profit amounts to €28.6mn, against the €0,1mn profit in the first half of 2009.

The consolidated net financial position shows further enhancement, from -€208.2mn at the end of 2009 to -€183,9mn as of June 30, 2010, with a net cash flow of €24.3mn, even though it has recorded extraordinary payments equal to over €15mn, in connection with the reorganization plans.
At the end of June 2010, the Group staff – including term contracts – totaled 2,908 persons, that is  542 less over the latest two years and 208 less with respect to end 2009, reflecting the effects of the ongoing restructuring plans.

Alessandro Alacevich, Central Director of Finance Administration, dirigente preposto alla redazione dei documenti contabili societari (manager in charge of drafting accounting and corporate records), pursuant to subparagraph 2 article 154bis of Testo Unico della Finanza (Finance Act) states that the accounting information included in this press release corresponds to the documented results, the books and the accounting records.  


The macroeconomic framework evolution over year 2010 is still characterized by a wide uncertainty, which does not favor a neat and generalized recovery of advertising investments.
The advertising market performance in the first five months of this year appears to be experiencing a slight recovery (+3.8%), however this is not sufficient to counterbalance the drastic cut in investments occurred in the corresponding period of 2009 (-17.5%).
In this framework, over the half-year under consideration, the Group has attained a remarkable growth in advertising revenues and, if no changes – that are at present unforeseeable to forecast – occur in the present frame of reference, the evolution of the advertising revenues will maintain a positive trend all along the current year.
Moreover, thanks to the ongoing cost reduction plans, the Group has recorded remarkable savings, thoroughly in line with its goals.
The Group’s profitability has thus shown a vigorous recovery and one may foresee that, vis-à-vis the previous year, a remarkable increase shall characterize current year’s results.
Finally, the Group sticks with its commitment to constantly enhance its titles and implement a powerful editorial development plan focused on the new media, that shall entail an increasingly larger distribution of its contents through all the new platforms. Great importance is to be attached to the launch of Repubblica+, the digital version of the daily newspaper that is now available on PC and also on i-Pad.


The Board of Directors has appointed Mr. Bruno Manfellotto as new editor of L’espresso.
Mr. Manfellotto, who is going to sign the Friday 6th August, 2010 edition, leaves editorship of the Group’s local daily newspapers.
The Board of Directors has thanked Ms. Hamaui – who is leaving L’espresso editorship to become Editorial Manager of all Repubblica periodicals and Editorial Supervisor of the Espresso Division monthly magazines – for her positive work in strengthening prestige of L’espresso.

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