Gruppo Espresso: Board of Directors approves the consolidated results as of March 31 2015


Rome, April 23 2015 – 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 March 31 2015 presented by Chief Executive Officer Monica Mondardini.

Performance of the market

In the first two months of 2015, the publishing sector reported similar trends to those that characterized the year 2014, both in terms of advertising orders and the circulation of newspapers and periodicals.
In the months of January and February overall advertising investment (Nielsen Media Research figures) declined by 5.2% compared to the same period of 2014.
In the breakdown by media, television reported a decline of 4.9%, the printed press fell by 8.0%, with national advertising posting a greater loss (-11.9%) than local advertising (-5.8%), and even advertising orders for the internet were down by 5.3%. Only radio reported growth, its advertising orders up by +5.2%.
However, there are signs that March was less negative, which may lead to a slight improvement in indexes for the whole quarter. As far as circulation is concerned, ADS (Accertamento Diffusione Stampa) figures show a fall in sales of daily newspapers of 9.8% in the first two months of 2015.

Performance of operations of the Espresso Group in the first quarter of 2015

The Group closed the first quarter of 2015 with a positive net result of €12.0mn.

Consolidated revenues, amounting to €146.6mn, posted a decline of 3.7% compared to first quarter 2014 (€152.3mn), with lower decline compared to the whole previous year.

Circulation revenues, which came to €55.7mn, were down by 3.8% compared to the corresponding period of the previous year (€57.9mn), in a market which, as stated above, has continued to suffer a significant decline in the circulation of daily newspapers (-9.8%).

Advertising revenues reported a decline of 2.8%. Advertising for radio showed growth of 2.6%, internet advertising was in line with the same period of last year (+0.1%), while advertising for the printed press was down by 6.9%.

Costs declined by 3.0%, a reduction that was substantially equivalent to the fall in revenues. More specifically, industrial fixed costs decreased thanks to the continuation in 2014 of the reorganization of the Group’s production structure, as well as operating and administrative costs, particularly in relation to overheads.

The consolidated gross operating margin came in at €13.9mn, which was substantially in line with the €14.2mn of first quarter 2014.

The consolidated operating result came to €10.2mn, which was equivalent to the figure for the same period of last year.
By business area, the printed press held up overall in terms of profitability, while radio reported a slight recovery.

The consolidated net result was net income of €12.0mn, up from €2.1mn in the first quarter of 2014. With the same operating result, the increase in net income of €9.9mn was due to lower taxes for €2.0mn, to the reorganization of the television activities for €1.1mn and to the capital gain of €6.1mn generated by the sale of the company All Music to Discovery Italia.

Net debt, which stood at €11.2mn, showed a further contraction of €23.1mn from the €34.2mn at year-end 2014. The financial surplus for the period from current operations was €12.8mn plus the cash inflow of €8.8mn from the sale of All Music.

The Group had 2,285 employees, including temporary contracts, at the end of March and the average number of employees in the period was 3.8% lower than in the first quarter of 2014.


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.


Main events that have occurred since the close of the first quarter and outlook for the rest of the year

In the first two months of the year, the advertising market was still showing a negative trend with the various media evolving in different ways.
However, in March there was a slight improvement in performance compared to the two preceding months, but there is still very little visibility as to how the year will evolve.
In this environment, the Group achieved operative results in the first quarter of 2015 in line with those of last year and a net result decidedly positive.
As for the outlook for the whole year, this is highly dependent on the performance of the advertising market, which at present is still uncertain.

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