ECONOMIC AND FINANCIAL RESULTS AS OF SEPTEMBER 30 2018
REVENUES AT €469.7MN (€425.5mn in 2017
EBITDA AT €31.4MN (€33.7mn in 2017)
NET INCOME AT €7.8MN (- €143.9 in 2017)
NET DEBT AT €124.7MN (€115.1mn at end of 2017: in July disbursement of €35.1mn as last instalment of tax dispute)
Milan, October 22 2018 – Today in Milan, under the chairmanship of Marco De Benedetti, the Board of Directors of GEDI Gruppo Editoriale S.p.A. met and approved the consolidated results as of September 30 2018 as presented by Chief Executive Laura Cioli.
Performance of the market
At the end of August 2018 the advertising market had improved slightly (+0.3%) compared to the same period of the previous year (Nielsen Media Research figures).
All of the main media except for the printed press were showing a positive performance: radio reported advertising orders up by 6.3%, confirming the trend in progress since 2015, the internet, excluding search engines and social media, reported a rise of 4.3% and television a rise of +1.5%. By contrast, orders for the printed media again posted a loss, of 6.8%, with newspapers reporting -5.7% (-3.0% orders for the national papers and -7.8% for the local papers) and magazines -8.4%.
As for newspaper circulation, according to ADS (Accertamento Diffusione Stampa) figures, in the period from January to August 2018 there was a decline in sales, on the newsstands and by subscription, of 7.5% (-8.6% for national papers and -6.6% for local papers).
Performance of operations of the GEDI Group in the first nine months of 2018
It should be remembered that on June 27 2017 the merger was completed into GEDI of the ITEDI Group, publisher of the newspapers La Stampa and il Secolo XIX. As an effect of this deal, GEDI acquired control of the ITEDI Group, which entered the consolidation perimeter on June 30 2017. Thus, the income statement of the GEDI Group for the first nine months of 2017 only included the ITEDI Group from July 1 2017 onwards.
For the main economic indicators illustrated below, the change from the first nine months of 2017 is, therefore, also given on a like-for-like basis.
Consolidated revenues, totalling €469.7mn, rose by 10.4% compared to the first nine months of 2017 (-5.9% on a like-for-like basis). The revenues from all of the digital activities accounted for 11.3% of the Group’s revenues.
Circulation revenues came to €215.5mn and were up by 14.5% on those of the same period of last year but were down by 8.4% on a like-for-like basis in a market that, as stated above, has continued to report a significant decline in newspaper circulation.
Advertising revenues rose by 9.2% compared to the first nine months of 2017 but were down by 2.5% on a like-for-like basis.
As for the Group media, advertising orders for radio grew by 4.7%, confirming the positive trend already seen in the previous year.
Internet orders showed growth of 17.8% (+4.9% on a like-for-like basis, which was slightly better than the market).
Lastly, orders for the printed press rose by 10.6% (-6.7% on a like-for-like basis, showing a performance in line with that of the sector as a whole).
Costs were 12.2% higher than in the first nine months of 2017 but fell by 4.0% on a like-for-like basis. More specifically, industrial fixed costs were lower (-7.0%), thanks to the ongoing reorganization of the production structure of the Group, and operational and administrative costs were also down (-5.6%), thanks to the measures adopted to reduce labour costs and overheads.
The consolidated gross operating margin was €31.4mn, which was substantially in line with the figure reported in the same period of 2017 (€33.7mn).
The consolidated operating result came to €17.3mn, compared to €22.3mn in the first nine months of 2017.
The consolidated net result was €7.8mn, versus a loss of €143.9mn in the first nine months of 2017 (-€145.7mn on a like-for-like basis), which included an extraordinary tax charge from the settlement of a dispute, pending in the Court of Cassation, relating to tax-avoidance issues regarding the tax benefits resulting from the corporate reorganization of Gruppo Editoriale L’Espresso in 1991.
Net debt totalled €124.7mn at September 30 2018, compared to €115.1mn at the end of 2017. On July 2 2018, the Company made a payment of €35.1mn as the final instalment of the above-mentioned settlement of its tax dispute.
The Group had 2,418 employees at the end of September 2018 including temporary contracts, and the average number of employees for the period on a like-for like basis was 1.9% lower than in the first nine months of 2017.
Key economic results for the third quarter
The performance of the third quarter confirms the trends already seen in the first half of the year.
Consolidated net revenues declined by 6.4% on the equivalent quarter of 2017, with circulation revenues falling by 7.6% and advertising revenues by 3.4%.
The consolidated operating result came in at €4.7mn versus €6.7mn in third quarter 2017; the consolidated net result was income of €3.5mn compared to a loss of €151.2mn in the same period of the previous year, taking into account that the entire extraordinary tax charge was reported in the third quarter.
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The Company’s Director of Administration and Accounts, Mr Gabriele Acquistapace, the Executive responsible for the preparation of the company’s Financial Statements, hereby attests in compliance with the terms of paragraph 2 of Art. 154-bis of the “Testo Unico delle Finanze” (Finance Consolidation Act) that the figures contained in this press release correspond to the results documented in the Company’s accounts and general ledger.
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Main events that have occurred since the close of the first nine months of the year and outlook for the rest of the year
No significant events have taken place since the close of the first nine months of the year.
As far as the outlook for the year 2018 is concerned, based on the performance recorded in the first nine months, there are no signs of any significant improvement in the negative trends that have been affecting the newspaper and magazine sector for years, while the positive evolution of radio and the internet is consolidating. In this context, the Group is continuing in its commitment to reap all the benefits of the merger with ITEDI, to develop and evolve both its editorial products and its digital activities and to implement on a permanent basis rationalization measures to preserve profitability in a structurally difficult market. It can therefore be postulated that, in the absence of any events that are as yet unforeseeable, the Group should report a positive result at the end of the year.
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