1st Quarter 2009 Consolidated results
Further deterioration in early 2009 macro-economic framework has determined a contraction of advertising investments that has been even heavier with respect of the one occurred late 2008. According to Nielsen Media Research data, in the first two months of 2009 the entire advertising market has recorded a down-turn of 19.5% with respect to 2008.
Even if diversely intense, this contraction has affected all the Company’s media except the Internet whose growth has however suffered a serious slowdown (+3.9%).
The printed press has recorded a drop of 27.4%, with magazines showing a more negative trend vis-à-vis newspapers.
The radio sector has shown a decline of 27.2% as compared to the corresponding period of the prior year, while it had still registered a growth.
In the present economic scenario, characterized by a fall in the consumption area, also daily newspapers and magazines have recorded a further contraction of sales: in particular, in the first two months of 2009 dailies circulation was marked by an overall drop of 5.3% (source: Federazione Italiana Editori Giornali – FIEG).
The Group’s first quarter consolidated revenues amount to €215mln, declining by 18% over the corresponding period of the previous year (€262.3mln).
Advertising revenues are equal to €109.3mln, and show an overall downturn of 26.8%; daily newspapers have recorded a revenues drop of 22.4%, which is rather limited if compared to the market results, thanks to the resilience of local dailies. Trends of the other media of the Group are substantially in line with the evolution of the reference markets.
Circulation revenues, excluding optional products, have totaled €65.8mln (-1.6% over the corresponding period of the previous year). Circulation revenues of daily newspapers are in line with those of 2008, while periodicals are showing a slightly downward trend.
Circulation of la Repubblica and L’espresso have recorded a more serious downturn (respectively -21.4% and -24.6%) basically due to the decision to suspend or reduce some highly promotional, but unprofitable, circulation initiatives. Finally, circulation of local dailies is in line with the first quarter of 2008, confirming that this sector is quite resilient with respect to the market crisis.
Revenues from optional products amount to €35.8mln, with a slight down turn of 7.9%, to be considered quite positive in a heavily shrinking market, thanks to the encouraging answer obtained also by the new initiatives launched in this time period.
Consolidated gross operating profit amounts to €16.7mln, declining by 53.2% vis-à-vis €35.6mln recorded in the first quarter of 2008. It must be noticed that the impact on the operating profit caused by the drastic drop in advertising revenues was mitigated by a 12% reduction in operating costs, basically produced by the action plans already put in place.
The consolidated operating profit has reached €6mln (€25.4mln over the first quarter of 2008) and the consolidated net profit suffers a loss equal to €2.5mln (in the corresponding time period of the previous year the net profit had reached €10.5mln).
The consolidated net financial position has decreased from -€278.9mln of end 2008 to -€248.8mln as of March 31, 2009, with a financial surplus of €30.1mln equivalent to the surplus generated over the first quarter of 2008; the lower profit of the period was counterbalanced by a growth in currents assets and a reduction in investments and share buyback.
At the end of March the Group staff totaled 3,266 employees – including staff under term contracts – having declined by 190 people with respect to the end of March 2008 and by 78 people with respect to the total number of 3,344 people employed at the end of 2008, thus reflecting the first effects of the current reorganization plans.
Alessandro Alacevich, Central Director of Finance Administration – who was appointed today 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.
Expected trend of operations
The present trend of the quarter and the outcomes available for the month of April confirm a drastic reduction in advertising investments and do not prospect, at present, any sign of recovery in the general scenario, bearing evidence of its deep uncertainty: the present situation is therefore discouraging investments and anyhow suggesting their postponement.
In order to face the market critical evolution, especially as regards the publishing sector, the Group has already implemented a set of measures to cut costs; over the first quarter these initiatives have already enabled to partly counterbalance the effects of the drop in advertising.
Based on the first quarter results, the need to further implement plans to limit costs is evident, starting with a simplification of the corporate and organizational level and with a serious reengineering process. The Group keeps at the same time the commitment to enhance its titles and brands by
developing all the relevant contents on the new platforms, with particular attention to its local titles’ websites and to adopt, without any significant investments, all possible quality enhancements in the printing and graphics of its newspapers, over the year also extending full color to almost all its local dailies.
Moreover, the management is also committed to strengthen the managerial competencies of the Group, and particularly of the more critical areas as regards its possible developments.
Company contacts
The text of this press release is also available on the company’s website
www.gruppoespresso.it .
Contact for additional information: Stefano Mignanego, Direttore Centrale Relazioni Esterne, (General Director for External Relations) telephone number 06/84787434, e-mail address s.mignanego@gruppoespresso.it .
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