Gruppo Espresso: net result at €17.0 mn (€8.5 mn in 2014)

Board of Directors approves consolidated results for the year ended December 31 2015

NET RESULT AT €17.0 MN (€8.5 MN IN 2014)
NET DEBT €10.7 MN (€34.2MN AT DECEMBER 2014)

Rome, March 2 2016
– Today in Rome, under the chairmanship of Mr Carlo De Benedetti, the Board of Directors of Gruppo Editoriale L’Espresso S.p.A. met and approved the consolidated results for the year ended December 31 2015 as presented by Chief Executive Officer Monica Mondardini.


In 2015 total advertising investment (Nielsen Media Research figures) showed a decline of 0.5% compared to 2014. Although the evolution was still negative, the decline was much less accentuated than that recorded in the previous year (-2.5%).
By media sector, advertising in the printed press fell by -5.7%, advertising for television and the internet were substantially unchanged from 2014 (+0.7% and -0.7% respectively) and radio showed a significant increase (+8.8%).

Regarding advertising in the printed press, the decline in 2015 (-5.7%) was less than that reported in the previous year (-8.5%): more specifically, local advertising came in at -5.6% (-9.3% in 2014) and those of the national press at -5.7% (-8.2% in 2014).

As for circulation, ADS (Accertamento Diffusione Stampa) figures show a decline for 2015 in the sale of daily newspapers of 8.7%, which is slightly less than the trend reported in 2014 (-11.4%).


The Group closed the year 2015 with a positive net result of €17.0mn.

The consolidated revenues of the Group, which totalled €605.1mn, posted a decline of 6.0% compared to 2014 (€643.5mn).
Circulation revenues came to €218.0mn and were down by 6.4% compared to the previous year (€232.9mn) in a market that, as stated above, continued to experience a significant reduction in the copies of the newspapers circulated (-8.7%).
La Repubblica, according to ADS figures, confirms its ranking as the top newspaper in terms of copies sold on the newsstands, subscriptions and other channels, and according to Audipress figures (2015/III Survey) reported 2.2 million readers per day for the traditional edition.
The local newspapers, which have an average of 2.9 million readers per day according to Audipress figures, reported a decline in circulation that was significantly less pronounced than that of the sector as a whole.
Lastly, regarding the digital editions of the Group titles, in 2015 an average of 93 thousand subscribers registered.
Advertising revenues, without third-party concessions, posted a decline of 4.2% with contrasting trends: while orders for the printed press reflected the still negative performance of the market, radio and the internet showed positive dynamics.
Radio saw an increase of 5.7%, with m2o posting double-digit growth.
Internet bucked the market trend, reporting growth of 2.0% partly underpinned by the confirmed position of leadership of, whose Total Digital Audience averaged 1.6 million unique users per day in 2015, 30% more than the number two website. The performance of local newspaper websites was also good as they clocked up an average Total Digital Audience of 406 thousand unique users on a daily basis.
Costs went down by 5.8%, with a decline that was substantially the same as the fall in revenues.
More specifically, industrial overheads were down (-12.0%), thanks to the ongoing reorganization of the production structure of the Group, as were logistics and distribution costs (- 7.5%) due to the rationalization of transportation, and operating and administrative costs also fell (-4.1%) thanks to the measures taken to cut labour costs and general expenditure.
The consolidated gross operating margin came in at €47.5mn; given that this includes €10.8mn of reorganization charges, the operating margin was substantially in line with that of the previous year (€59.8mn). The consolidated operating result came to €30.5mn, versus €29.9mn in 2014. Profitability by business area shows that newspapers held up well and radio underwent growth.
Financial expense fell from €14.9mn in 2014 to the current €8.8mn, thanks to the reduction in debt and to the new financing programme put in place during 2014.
In the year 2015 the interest held in Persidera was written down by €17.1mn based on the results of the impairment test. Moreover, at the end of January 2015 the sale was completed of the television channel DeejayTV to Discovery Italia, giving rise to a capital gain of €10.4mn, classified in the item discontinued operations.
The consolidated net result was €17.0mn, up from €8.5mn in the previous year, and benefited from the recalculation of the provision for deferred taxes at the new Ires tax rate of 24% that was introduced by Stability Law 2016.
Consolidated net debt stood at €10.7mn at December 31 2015 while the financial surplus came to €23.5mn.
The Group had 2,183 employees at December 31 2015 including temporary contracts. The average number of employees in 2015 was 4.9% lower than that of the previous period.

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.


The revenues of the Parent Company of the Group came in at €283.2mn (€313.6mn in 2014). The operating result was €-0.7mn (€11.0mn in 2014). The net result was a loss of €4.0mn (a loss of €5.2mn in 2014).


The Board of Directors will propose to the Shareholders’ Meeting convened for April 21 2016 that the loss for the year of Euro 4,037,532.51 be covered using the available reserves recorded in the balance sheet at December 31 2015.


The Board of Directors verified the existence of the requisites of independence of the Directors, confirming that Mr Massimo Belcredi, Ms Agar Brugiavini, Mr Alberto Clò, Ms Silvia Merlo, Ms Elisabetta Oliveri, Mr Luca Paravicini Crespi and Mr Michael Zaoui can indeed be qualified as independent. The Board also verified the requisites of independence and integrity of the members of the Board of Statutory Auditors.


In 2015 the evolution of the sector remained problematic: for the circulation of newspapers and magazines performance was in line with that of the previous year, while for the advertising market there was again a decline but one that was much more contained than in 2014.

Despite the above, the Group maintained its profitability in line with that of the previous year thanks to the positive evolution of radio and the fact that the results of the printed press held up because operating costs were cut to an extent that compensated for the decline in revenues that was the inevitable result of the market trend.

The Group confirmed its leadership in its digital business and is indisputably the top information website in Italy and one of the most important at international level.

Lastly, during the year 2015, after the creation in 2014 with Telecom Italia Media of Persidera, the network operator into which the multiplex of the Espresso Group and of TIMB were merged, in January 2015 All Music, publisher of the mainstream national television channel DeejayTV, was sold to Discovery Italia, although some of the Group’s productions were maintained on the channel.

Regarding this transaction, it should be noted that the definitive assignation of LCN 9 to All Music was still pending. On February 1 2016 the Court of Cassation ruled that the previous assignation plan defined by AGCOM was legitimate and therefore we are now awaiting implementation of the plan by the Ministry of Economic Development, which will end with the final assignation of the LCNs. If the current provisional assignation of channel 9 is confirmed, based on the agreement signed with Discovery the Espresso Group will receive additional consideration, which is not however reflected in the financial statements because of the uncertainty still surrounding the final assignation.

As for the evolution of the first months of 2016, the evidence available so far does not allow us to expect a market evolution that is significantly different from that of 2015; in January and February 2016 the trend of the Group’s advertising orders was slightly positive but this cannot yet be considered a consolidated trend.

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