THE ESPRESSO GROUP CLOSED THE FIRST NINE MONTHS OF THE YEAR WITH A POSITIVE RESULT OF €4.6MN IN LINE WITH THAT OF THE PREVIOUS YEAR
NET DEBT DECLINES FURTHER: €44.8MN (€73.5MN IN DECEMBER 2013)
Rome, October 22 2014 – The Board of Directors of Gruppo Editoriale L’Espresso S.p.A. met today in Rome under the chairmanship of Mr Carlo De Benedetti and approved the consolidated results as of September 30 2014 presented by the Chief Executive Officer, Ms Monica Mondardini.
Performance of the market
During 2014, in a general economic climate that remains one of recession, the publishing sector has continued to report negative performances affecting both advertising orders and the circulation of newspapers and magazines. In the first eight months of this year the negative trend, which has characterized advertising investment for the last five years, continued albeit to a lesser degree: according to Nielsen Media Research figures, overall advertising in the period from January to August reported a decline of 2.7% compared to the same period of 2013, but still with significant cuts in advertising expense particularly in the telecommunications, transport, fashion and cosmetics sectors.
The evolution of orders by category of media shows that the trends were diverse: television and internet orders were substantially in line with the same period of 2013 (+0.9% for both media), while orders for the printed press experienced a further significant decline (-10.4%), which affected both newspapers and magazines (-10.3% and -10.5%) and national and local advertising (-10.7% and -10.0%). Even the radio stations reported a slight downturn (-3.9%).
As for circulation, ADS (Accertamento Diffusione Stampa) figures for the period from January to August 2014 show a decline in newspaper sales of 11.5%; it should be noted that at the same time digital subscriptions to newspapers rose but this increase does not at present compensate for the loss of copies in the traditional format and sales channel.
Performance of operations of the Espresso Group in the first nine months of 2014
Despite the negative trend of the market, which is having a significant impact on revenues, the Group closed the first nine months of 2014 with a positive result which was in line with that of the same period of last year.
It should be noted that following the integration of the network operator activities into Persidera, the consolidation perimeter has now changed.
The consolidated net revenues of the Group came in at €471.2mn and were down by 8.1% compared to the first nine months of 2013 (€512.6mn).
Circulation revenues, totalling €175.8mn, were down by 6.3% compared to the same period of last year (€187.7mn) in a market which, as stated above, is continuing to experience a significant decline in the circulation of daily newspapers (-11.5%). On the basis of the most recent ADS figures (August 2014), la Repubblica confirms its ranking as top newspaper in terms of copies sold on the newsstands, subscriptions and other channels and, on the basis of Audipress figures, as the top newspaper in the traditional format for number of readers.
Growth is also continuing of subscriptions to the digital products of the newspaper (Repubblica+ and Repubblica Mobile): the average number of subscribers in the first nine months of the year rose by 10% compared to the same period of 2013 and at the end of September stood at approximately 76 thousand.
The local papers reported better circulation figures then their sector and even here there was a gradual increase in the number of digital copies although to a lesser extent than that of the national newspaper.
Overall at the end of September the Group had more than 100 thousand subscribers to the digital editions of its published titles.
Revenues from advertising in the Group media declined by 7.7% (-9.3% if third-party concessions are included, following the changes to the perimeter).
By sector, the printed press reported a 10.5% fall in the amount of advertising collected, which was in line with the performance of the whole segment.
Advertising orders for the remaining media, internet, radio and TV, was substantially in line with that of the same period of last year.
It should be noted in particular that the performance of Repubblica.it was excellent, its average Total Digital Audience in the period January – July, according to the new Audiweb survey, amounting to 1.7 million unique users per day, confirming its leadership among Italian news sites with a 38% lead over the second site; audience growth for the local newspaper websites was also significant (+17% just on PCs), with an average Total Digital Audience in the period January – July of 403 thousand unique users per day.
Costs fell by 7.7% which was substantially equivalent to the fall in revenues; more specifically, industrial overheads decreased thanks to the ongoing reorganization of the production structure of the Group, distribution costs fell because of the rationalization made to transportation, and operating and administration costs went down mainly thanks to the measures adopted to contain labour costs.
The consolidated gross operating margin was €41.5mn, up slightly from €38.4mn in the same period of 2013.
Consolidated operating income came in at €26.1mn, which was a little higher than the figure of €22.8mn reported for the same period of the previous year.
The consolidated net result, with the same consolidation perimeter, was net income of €4.9mn, versus €3.9mn in the first nine months of 2013. Including the businesses sold, the net result came to €4.6mn compared to €4.5mn in the same period of last year.
Consolidated net debt, which stood at €44.8mn at September 30 2014, showed a further reduction from €73.5mn at the end of 2013 and from €61.7mn at September 30 2013; the financial surplus for the period was €28.7mn.
The Group had 2,373 employees, including temporary contracts, at the end of September and the average number of employees in the period, with the same consolidation perimeter, was 4.1% lower than in the first nine months of 2013.
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