The Board of Directors of Mediaset, which met under the Chairmanship of Fedele Confalonieri, has been informed of the recent events resulted in the breach of contract of the Vivendi Group (press release dated July 25, 2016) and has reviewed an action plan at the company’s protection. The Council took note of the statement by management and voted to reject the alternative proposal of Vivendi considered inadmissible as incompatible with the binding agreement already signed. The Council therefore instructed the administrator to take appropriate actions that will achieve the fulfillment of the contract by Vivendi and, in the event of inaction by the latter, to take civil and possibly criminal in protection of interests of society.
The Council subsequently approved the report on the first half of 2016.
Key findings Mediaset Group Net revenues: 1,870,600,000 of EUR
Operating profit (EBIT): 97.3 million of euro
TV listen: leadership in the commercial target in Italy and in Spain
the Mediaset Group ended a semester, confirming the positive trend of sales growth in all major areas of activities of the group which previously occurred during the first three months of 2016. Despite a backdrop of persistent market volatility and extreme complexity of the economic situation in Italy Mediaset’s advertising sales remained positive for the fourth consecutive quarter. Even in Spain continued the phase of steady expansion in advertising revenues of Mediaset España. Given these positive trends, the consolidated financial results have improved compared to the budget forecast both in Italy and in Spain. And this despite the expected higher costs incurred in the third quarter of 2015 for the acquisition of valuable TV sports rights (including the three-year exclusive of the Champions League) for the 2015-2016 season. Rights which are ensuring the continued growth of the customer base and the average revenue of the premium in line with the expected trend in the three year plan drawn up to purchase the eve of those rights.
The Group’s performance is summarized as follows:
• Net revenues amounted to 1.8706 billion euro, strong growth compared to 1.7211 billion the first half of 2015. In Italy, revenues they reached 1.3497 billion euro, compared to 1.2437 billion euro in the same period last year. Spain reached 521.6 million, compared with EUR 478.5 million in 2015. Positive in both countries the trend in advertising sales. In Italy, the gross television advertising revenues reached 1.0488 billion, compared with EUR 1011.0000000 euro in the first six months of 2015 (+ 3.7%). The collection of performance was much supported in the second quarter with an increase of 4.6% over the same period of 2015. Based on the latest available data disclosed by Nielsen, in the first five months of the year Mediaset’s advertising revenues It grew by 4.5% over the same period of 2015 compared to an overall growth of 2.7% advertising market. In Spain, where the economic recovery is still firm, the gross television advertising revenues amounted to 508.0000000 compared to EUR 473.2 million the previous year (+ 7.3%).
• EBIT of the Group amounted to 97.3 million euro compared to 137.0 million the previous year. In Italy the EBIT amounted to -52.8 million euro compared to 26.5 million in 2015. In Spain the figure grows to 150.1 million euro compared with 111.0 million euros the previous year.
• The consolidated net profit amounted to 27.8 million euro compared to 24.2 million euro in the same period of 2015.
• Acquisition of one-off cash. In the second quarter 2016 cash expenditures were incurred one-off – resulting solely from the signing of the contract with Vivendi – amounted to 34.6 million euro.
• Net financial debt rose from 859.4 million euro at December 31 2015 to 959.1 million Euros as at 30 June 2016. The change has affected the investment for 91.4 million euro carried in the first quarter of the year due to the increase of the controlling interest in Mediaset España through the completion of the buy-back plan of own shares carried out by the company. To which are added the outputs for a total of EUR 106.1 million related to the distribution of dividends by Mediaset S.p.A. and Mediaset España and the aforementioned cash outlay for running the Vivendi contract. The free cash flow of operations in Italy and Spain was amounted to 152.8 million euro.
• TV ratings. In Mediaset first six months of 2016 confirm a clear leadership in the commercial target, both in Italy and in Spain. In Italy, Mediaset is the leader on the 15-64 age range with 33.7% share in the 24 hours. Channel 5 is the view of Italian channel in the commercial target, both in prime time (16.8%) in the 24 hours (16.5%). In Spain, television Mediaset España channels confirmed the absolute leadership in the 24 hours with 30.5% share. Telecinco is Spain’s most popular across the whole day with 14.6%.
OUTLOOK In Italy the trend of the Group’s advertising revenue is expected to remain positive in the third quarter, despite the months of July and August of major international sporting events (finals the European Football Championship in the first half of July and the Olympic Games in August) transmitted by the main competitors. In September, the trend in income should be positively supported from the start of the new fall television season providing for an offer editorial Mediaset further renewed and strengthened. In the second half of the year, the consolidated financial results should also highlight a trend in television costs more in line with the same period of 2015 due to the continuum of sporting Mediaset Premium compared to the same period last year, as well as benefit from further growth in core revenues and pay the positive contribution arising from the results of Mediaset España. On this positive trend could weigh the negative impacts resulting from both the decision-making delays on the operations of Mediaset Premium – caused dall’interim management due to the terms of the contract with Vivendi – both commercial and operational decisions taken by the Vivendi and not provided for in the original budget of Mediaset Premium. From July 1 will also be fully consolidated companies belonging to the RB1 / Finelco but this will not determine the remainder of the year a significant impact on the Group’s margins.
(RV)
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