NET INDEBTNESS DECREASING AT €105.1M
CONSOLIDATED REVENUES AT €594.0M (-9.1%)
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 results at September 30, 2012.
MARKET OUTLOOK
The deteriorating economic situation, characterised by a period of definitely severe recession and great uncertainty about future prospects, has heavily weighed on the publishing industry.
Advertising investments have recorded a sharp contraction: in fact, the first eight months of year 2012 evidenced a 10.5% downturn over the corresponding period of year 2011 (source: Nielsen Media Research). The negative performance of consumer spending induced all the most important economic sectors (food, transportation, TLC, fashion and cosmetics, housing, etc.) to heavily cut advertising.
Moreover, the contraction in advertising investments has worsened over the year, from -7.5% in the first quarter to -11.6% in the second quarter and, finally, to -14.9% in the twomonth (July-August) period (source: Nielsen Media Research).
This trend was negative for all traditional media: between January and August, the press sector was down 14.8%, television 10.9% (-14.5% for traditional TV and +15.7% for satellite and digital terrestrial TV) and radio 7.4%. In contrast, advertising sales on the Internet – except for search engines not surveyed – have kept performing well, and posted an 11% increase.
As regards the press in particular, dailies and magazines have recorded considerable downturns (respectively -13.9% and -16.2%) with almost similar decreases in advertising at both the national and local levels.
In terms of circulation, as in the past years, the performance is still recording a decline which is affecting both dailies and magazines (no current ADS data are available for a comparison with the previous year however internal assessments have evidenced a decline near to 7% for dailies.
PERFORMANCE OF GRUPPO ESPRESSO RESULTS IN THE FIRST NINE MONTHS OF YEAR 2012
The Group’s consolidated revenues amount to €594M, down 9.1% on the corresponding period of year 2011 (€653.7M). This is due to the contraction of advertising revenues deriving from the market performance and contraction of activity in add-on products.
Circulation revenues, net of add-on products, amounted to €199.3M, down 3% on the corresponding period of the previous year (€205.5M); this might be considered a limited decline vis-à-vis a market situation characterized by severe decrease in consumer spending and gradual decline of interest in press media.
According to most recent ADS (August 2012) and Audipress data (2012/II Survey) once again la Repubblica ranks first among the Italian daily newspapers in terms of newsstand sales, and first information daily in terms of readership (3.2 million).
Moreover, a new kind of audience is taking shape – willing to buy daily newspaper digital products – which in September 2012 reached over 50 thousand active subscribers.
The latest Audipress figures also show that L’Espresso ranks first among the news magazines, with 2.7 million readers, up 1.6% on the previous survey.
Finally, in June 2012, the significant programme aimed at renovating the 18 local newspapers was completed, through which all these titles will share new, full-colour graphics; in addition, a totally integrated press-Web publishing system was introduced.
Advertising revenues, equal to €342.4M, have recorded a 10.1% downturn over the corresponding period of the previous year, in a market which in August has recorded a 10.5% decline.
The trend of each single media is basically a reflection of general market performances; anyway, the results displayed on all the above media are slightly more favorable to the Group.
During the first nine months of the year, the Group’s press media suffered a 14.2% downturn (market in August: -14.8%) and radio a 6.7% downturn (market in August: – 7.4%).
The performance of advertising in the Internet, expanding by 14.3% vis-à-vis +11% of the market, was absolutely positive and confirmed the brilliant results of the most recent years, even in a definitely unfavourable framework.
The Group can rely upon a daily audience of 1.7 million users; once again Repubblica.it ranks first among the information websites displayed in Italian, and is 20% ahead of the second-placed. Moreover, audiences of the Group’s local daily newspapers and “D” (the website dedicated to women) are increasing in a remarkable way.
Revenues from add-on products amount to €34M and are suffering a severe downturn (-35.1%) over the corresponding period of year 2011, produced by generalized consumer spending depression and gradual contraction of the specific market, that is going on since year 2007, after a phase of intense activity.
Other revenues, amounting to €18.3M, have increased by over 20% vis-à-vis the first nine months of 2011, thanks to the growing rental of digital terrestrial television bandwidth to third parties.
Total costs show a 5.2% reduction, mainly as a result of the new plans aimed at reducing headcount and costs, implemented during the course of year 2011.
The average staff of the period has decreased by 4.8% over the corresponding period of the previous year, from 2,765 to 2,632 employees. Further cost reduction implemented in year 2012 has mostly concerned the Group’s industrial and administrative areas.
The consolidated gross operating profit amounts to €82.8M, down 26.1% on €112M of the corresponding period of year 2011.
About half of this downturn is due to lower margins on add-on products, and the remainder to press and radio activities, which were hit by a decrease in advertising revenues.
In contrast, the Internet area is improving results, thanks to the grow of revenues, likewise the television sector, thanks to the increased bandwidth rental activity.
The consolidated operating profit amounts to €54.3M, down 35.6% on €84.3M reached in the corresponding period of the previous year (€84,3M).
The consolidated net result has recorded €26.4M profits vis-à-vis €41.4M reached in the first nine months of year 2011.
The consolidated net financial position, taking into account dividends amounting to €25M and purchases of own shares amounting to €1,6M, as of September 30, 2012 came to -€105,1M, vis-à-vis -€112,4M as of September 30, 2011.
End of September 2012 the Group staff, including term contracts, was reduced to 2.584 employees, 89 down as of December 31, 2011. The average staff of the period is 4.8% down on the first nine months of year 2011.
The third quarter performance confirms the trend lines identified during the course of the first half-year, with a slightly more pronounced decrease in revenues and results due to a more critical performance of advertising sales.
Consolidated revenues have decreased by 11.3%, with a 14.2% decline in advertising sales; the remaining revenues show performances in line with the first half-year.
Consolidated operating profit amounts to €12.2M vis-à-vis €21.3M of the third quarter of year 2011;
Consolidated Net Profit amounts to €5.2M (€9.9M in the corresponding period of year 2011).
***
The company’s Director of Administration and Accounts, Gabriele Acquistapace, manager in charge of drafting corporate and accounting records, pursuant to subparagraph 2 art. 154 bis of “Testo Unico delle Finanze” (finance act), states that the accounting information included in this press release corresponds to the documents results, the books and the accounting record.
***
SUBSEQUENTS EVENTS AND OUTLOOK
The present economic scenario, uncertain prospects in the short and medium term, and structural evolutions taking place in the press and more general in communication media, have determined, again in year 2012, considerable reductions in revenues of the publishing sector. Early signs from the fourth quarter, concerning in particular advertising sales, do not suggest improvement.
The above situation negative impact on the publishing sector results is extremely evident, and well mirrored by the half-year financial statements published by leading operators of this sector.
Despite the foregoing, the Group has closed the first nine months with a
meaningfully positive result, and confirms the positive results in net profit can be achieved all along the year, even if sensibly down on year 2011.
The structural nature of the current crisis requires the Group to be once again committed to take actions to safeguard its profitability in the short and medium term, address to futher cost reduction and boost digital products.
This is not a compatible browser.
To continue to navigate on this site, an updated or more recent browser is necessary
Before accessing the contents of this website, please read and accept the legal notice below.
The documentation and information contained in this area of the website are accessible only to persons who are not currently domiciled or located in the United States of America, Australia, Canada, Japan, or in any other jurisdiction other than Italy in which it is required an authorization by the competent regulatory authorities or other fulfillments (such Countries, included the United States of America, Australia, Canada, Japan, jointly the “Other Countries”).
The document and information contained in this area of the website are not, and must not be sent, or in any other way transmitted to or distributed to, directly or indirectly, in the United States of America, Australia, Canada, Japan or any Other Countries.
The documentation and information contained in this area of the website are not, and must not be sent by, or transmitted to or distributed to, directly or indirectly, persons resident or physically present in the United States of America, Australia, Canada, Japan, and do not constitute and cannot be interpreted as an offer to purchase or a solicitation of an offer to sell financial instruments addressed to U.S. Persons - as defined under the U.S. Securities Act of 1933, as amended, or to persons resident in Other Countries. The shares of COFIDE – Gruppo De Benedetti S.p.A. – which will change its company name to “CIR S.p.A. – Compagnie Industriali Riunite” on the effective date of the merger by incorporation with CIR S.p.A. – Compagnie Industriali Riunite - referred to in this area of the website have not been and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States of America absent registration or an applicable exemption from registration thereunder.
In order to access the information and documents contained in this area of the website I declare under my personal liability: not to be currently a U.S. Person, and not to find me at present in or not to be resident in the United States of America, Australia, Canada, Japan, or in any Other Country, and I have fully understood and accepted the limitations reported above.
The documentation and information contained in this area of the website are accessible only to persons who are not currently domiciled or located in the United States of America, Australia, Canada, Japan, or in any other jurisdiction other than Italy in which it is required an authorization by the competent regulatory authorities or other fulfillments (such Countries, included the United States of America, Australia, Canada, Japan, jointly the “Other Countries”).
The document and information contained in this area of the website are not, and must not be sent, or in any other way transmitted to or distributed to, directly or indirectly, in the United States of America, Australia, Canada, Japan or any Other Countries.
The documentation and information contained in this area of the website are not, and must not be sent by, or transmitted to or distributed to, directly or indirectly, persons resident or physically present in the United States of America, Australia, Canada, Japan, and do not constitute and cannot be interpreted as an offer to purchase or a solicitation of an offer to sell financial instruments addressed to U.S. Persons - as defined under the U.S. Securities Act of 1933, as amended, or to persons resident in Other Countries. The shares of COFIDE – Gruppo De Benedetti S.p.A. – which will change its company name to “CIR S.p.A. – Compagnie Industriali Riunite” on the effective date of the merger by incorporation with CIR S.p.A. – Compagnie Industriali Riunite - referred to in this area of the website have not been and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States of America absent registration or an applicable exemption from registration thereunder.
In order to access the information and documents contained in this area of the website I declare under my personal liability: not to be currently a U.S. Person, and not to find me at present in or not to be resident in the United States of America, Australia, Canada, Japan, or in any Other Country, and I have fully understood and accepted the limitations reported above.