RCS MediaGroup Board of Directors: results at 31 March 2012 approved
CorporateMay 14, 2012 - 21:22
Consolidated revenue at EUR 414 million (-9% on a like-for-like basis compared to the same period of 2011)
Advertising revenues at EUR 148.4 million (-9.2% compared to 1Q11)
Revenues from digital activities at EUR 27.2 million (+7% compared to 1Q11), excluding Dada and Television Activities
EBITDA before non-recurring expense/income at EUR 2 million (EUR 4.5 million in 1Q11 on a like-forlike basis)
EBITDA after non-recurring expense/income at EUR 0.5 million (EUR 2.3 million in 1Q11 on a like-forlike basis)
Net loss of EUR 27.3 million, compared to a net loss of EUR 20.9 million in 1Q11
Net financial debt at EUR 963.5 million (EUR 938.2 million at 31 December 2011)
Flammarion: decision to continue with the sales process
Milan, 14 May 2012 – At its meeting today, the Board of Directors of RCS MediaGroup, under the chairmanship of Angelo Provasoli, examined and approved the results at 31 March 2012. The main consolidated results for the period compared with those of the same period of 2011 are shown below.
Consolidated figures* (EUR million)
IQ12
I Q11 LIKE-FOR-LIKE1
I Q11 REPORTED2
Consolidated Group revenue
414 454.8 472.9
EBITDA before non-recurring expense/income
EBITDA after non-recurring expense/income
(22.9) n.a. (21.2)
Net profit/loss
Balance sheet figures* (EUR million)
Net financial debt
1 31 May 2011 saw the completion of the sale of the entire share capital of Dada.Net S.p.A., a company operating in the sector of paid-for products and services offered to Community, Entertainment & Gaming industries that can be accessed from personal computers, mobile phones and smartphones. DadaNet S.p.A. operates through a number of direct subsidiaries. This transaction resulted in a drop in revenue of EUR 18.1 million in 1Q12 compared to 1Q11, and a fall in EBITDA of approximately EUR 0.8 million.
2 – Figure is as reported in the interim report detailing the Group's Results at 31 March 2011.
* Alternative performance indicators:
– EBITDA refers to the operating result before depreciation, amortisation and write-downs.
– Net financial debt, an indicator of financial structure, is calculated as current and non-current financial payables, less cash and equivalents, current financial assets and non-current financial assets recognised for derivatives.
Group performance in the first quarter of 2012
The macroeconomic environment in the first quarter of 2012 confirmed the general downward trend in the Group's traditional markets – particularly in the advertising sector – with the exception of online advertising. In this environment, the RCS Group managed the change required with determination, continuing to invest and strengthen its focus on multimedia operations to grow its core business, significantly increasing the percentage of revenue generated by digital activities, and maintaining a constant focus on costs and organisational efficiency.
The Group's consolidated net revenue was EUR 414 million, compared with EUR 472.9 million in 1Q11: the EUR 58.9 million decline (which is reduced to EUR 40.8 million on a like-for-like basis due to the sale of Dada.net) is mainly attributable to the drop in circulation revenues and advertising revenues.
Revenues from digital activities rose 7% on the same period of 2011, to EUR 27.2 million (excluding the contribution of Dada and Television Activities).
Advertising revenues came in at EUR 148.4 million (EUR 163.5 million in 1Q11), mainly owing to the results of Spanish and Italian Newspapers, which were negatively affected by market trends, lower revenue from press advertising and the transfer of Veo TV's advertising revenues.
Circulation revenues totalled EUR 222 million, compared with EUR 243.1 million in the same period of 2011, mainly owing to decreases in the Partworks and Italian Newspapers segments.
Other publishing revenues fell by EUR 22.7 million, but excluding the effect of selling Dada.net were down by EUR 4.6 million.
EBITDA before non-recurring expense/income was EUR 2 million, compared to EUR 4.5 million on a like-forlike basis in 1Q11; this was mainly due to the contribution of the Spanish Newspapers division.
EBITDA after non-recurring expense/income fell on a like-for-like basis from EUR 2.3 million in 1Q11 to EUR 0.5 million. Non-recurring net expense came to EUR 1.5 million in 1Q12, compared with EUR 2.2 million in 1Q11.
EBIT was negative at EUR 22.9 million, compared with an EBIT loss of EUR 21.2 million at 31 March 2011.
Net financial expense totalled EUR 7.4 million (EUR 5.4 million in the first quarter of 2011).
The net loss for the period was EUR 27.3 million, compared with a net loss of EUR 20.9 million at 31 March 2011.
Mainly owing to investments made, net financial debt rose from EUR 938.2 million at 31 December 2011 to EUR 963.5 million.
The average headcount was 5,755, down 301 compared with 1Q11, owing to the sale of Dada.net and the reorganisation plans involving all areas of the Group.
Comments on performance in the first quarter of 2012
The Italian Newspapers division recorded revenue of EUR 135.6 million (down 7.4% on the same period of 2011). Advertising revenues came in at EUR 60.6 million: stripping out the revenue generated by City, suspended at the end of February 2012, the fall was around 4%, outperforming the market. Online media revenues grew by 8.2% (+11.6% excluding City and Automobili.com), accounting for 16% of the segment's advertising revenues. Circulation revenues fell from EUR 77.1 million in 1Q11 to EUR 69.7 million in 1Q12, with digital publishing revenues up 39.5%, supported by the expansion of the new multimedia platform range.
Corriere della Sera and La Gazzetta dello Sport retained their overall leading positions in their sectors as regards total circulation, with average figures in the period of 505,000 (+1.2% compared to 31 March 2011) and 274,000 (a decline on 1Q11 due to fewer major football events) respectively, including digital editions.
In line with the plan to strengthen the multimedia systems centred around the two publications, the Group continued to implement growth measures. These included, for Corriere della Sera, the launch of the new native app for iPads, the new website ViviMilano.it and the section dedicated to Bergamo with a related website, and for La Gazzetta dello Sport – whose readership figures are growing constantly – the restyling of Sportweek. All online traffic and readership indicators for both sites continued to register growth, exceeding in total 32.3 million nonduplicate monthly average unique users in the quarter, up 4% compared to 31 March 2011. The websites corriere.it and gazzetta.it recorded average daily unique browsers on weekdays of 2.1 million (up 11% compared with 1Q11) and 954,000 (up 1% compared with 1Q11) respectively. In the quarter, corriere.it made 53 million videos available (+38%), and gazzetta.it 21.4 million (+26%). Paying subscriptions to the two newspapers for smartphones active at the end of March exceeded 53,000 (25,000 in the same period of 2011), with more than 1.2 million applications downloaded.
Other publishing revenues grew by 15.2%, partly due to the development of RCS Sport's activities.
EBITDA was positive at EUR 12.7 million (EUR 15.9 million in 1Q11); excluding non-recurring expense/income, it came to EUR 13.1 million, down EUR 1.4 million, mainly owing to the fall in advertising revenues.
In Spain, Unidad Editorial recorded revenue of EUR 105.7 million, compared to EUR 116.7 million in 1Q11. Advertising revenues came to EUR 41.8 million, compared with EUR 50.2 million at 31 March 2011, in line with the general market trend, with online media revenues now accounting for 20.2% of total net advertising revenue. Publishing revenues totalled EUR 54.5 million (EUR 55.4 million in the same period of 2011), due to the overall drop in circulation, offset by the positive performance of add-on products.
El Mundo confirmed its position as Spain's second-largest daily, with an average daily circulation of 254,000 copies. The average circulation of leading sports daily Marca was 224,000 copies, including digital editions.
In the online business, the number of users continued to increase across all the Group's websites, further strengthening Unidad Editorial's leadership position. elmundo.es confirmed its position as both a national and global leader in Spanish language general news websites, with an average of 30.1 million unique browsers (+4% compared with 1Q11). marca.com experienced constant growth, averaging 32.8 million unique browsers (+3% compared to 1Q11) and confirming its position as outright leader amongst information websites in Spain, while expansion.com recorded 17% growth compared to 31 March 2011, with an average of 3.7 million unique browsers. The Group's digital platform ORBYT confirmed its position as leader in the online business, and in order to create the digital equivalent of a newsstand, the Group has also opened up the platform to newspapers of external publishers.
EBITDA was negative at EUR 2.3 million (EUR -3.2 million at 31 March 2011); excluding non-recurring expense/income, it totalled a negative EUR 1.8 million, compared to EUR -3.2 million in 1Q11.
Total revenue in the Books division came in at EUR 88.6 million, compared to EUR 99.6 million in 1Q11: the drop, affected by the general significant contraction on the book market and the still relative impact of the digital business on the sector, includes the sharp fall in the Partworks sector due to a publishing schedule that seeks to reduce risk and the negative performance of external publishers in the Italian fiction/non-fiction division. Rizzoli International Publications bucked the trend, with revenue growth of 29.7%. The titles published notably included "Il disagio della libertà" by Corrado Augias, "La casa sopra i portici" by Carlo Verdone, "La consulente" [Mistress of Justice] by Jeffrey Deaver, "Le nostre vite senza ieri" by Edoardo Nesi and "L'Ordre Libertaire" by Michel Onfray.
EBITDA, which was negative due to seasonal factors at EUR -3.6 million, fell by EUR 1 million compared with the first quarter of 2011.
The Magazines division reported revenue of EUR 43 million (EUR 49.1 million at 31 March 2011), mainly owing to the drop in publishing revenues, which were affected by the different release schedule adopted for add-on products. Advertising revenues amounted to EUR 21 million (EUR 22.9 million in 1Q11), outperforming the market.
The multimedia system publications for women saw growth in advertising revenues of 2%, reflecting good performances from Amica (+21% in volume terms), Io Donna (+3%) and website Leiweb, which registered an increase of 31.2% in revenue and more than 3.6 million unique browsers. In the home furnishings multimedia system, portal AtCasa confirmed its position of market leader, with more than 660,000 unique browsers (+41.5%). Notable in the family multimedia system was the positive result of website Oggi.it, which registered more than 1.2 million unique browsers, four times its March 2011 figure.
EBITDA, at EUR -4.2 million, registered an improvement compared to 1Q11; excluding non-recurring expense, EBITDA grew by EUR 0.6 million compared to the same period of 2011.
The Television division (Digicast) posted revenue of EUR 3.4 million (EUR 5.9 million at 31 March 2011), mainly due to the sale of the Yacht & Sail channel and the expected revision of the Sky contract. The channels Lei, with audience growth of 50% compared to 1Q11, and Dove, up 41%, again put in positive performances.
EBITDA came in at EUR 1.4 million, compared to EUR 2.2 million in 1Q11.
The Dada group posted revenue of EUR 22 million (EUR 39.2 million at 31 March 2011). On a like-for-like basis, revenue grew. EBITDA rose from EUR 1.4 million to EUR 3.1 million; on a like-for-like basis and before non-recurring expense, it grew by EUR 1.1 million, mainly due to higher revenue and cost containment measures.
The Board of Directors has examined and assessed the purchase offers received by the Advisor in relation to the sale of French publishing group Flammarion, and has decided to continue with the sales process, providing that satisfactory condition will be obtained.
The Board of Directors has finally heard an extensive relation by the Compensation and Appointments Committee on the prosecution of the search for the new Chief Executive Officer. The search is expected to be finalized by the end of May.
The macroeconomic environment remains in recession. Unfavourable market conditions are expected to persist in the second quarter for the sectors and countries in which the Group operates, particularly in relation to the advertising markets.
In light of macroeconomic trends, and despite continued growth compared to 1Q11 in online advertising revenues, which totalled EUR 21.4 million and now account for around 15% of total advertising revenues (excluding Dada and Television activities), advertising revenues overall could, however, contract in 2012.
Circulation figures will continue to be influenced by the ongoing development of the business model. The sharp acceleration in cross-media and digital projects will, however, offset the drop in paper-based products, without ruling out a trend reversal for certain publications.
The books market is experiencing a contraction in sales due to the economic crisis. In this difficult environment, the multimedia contribution has not yet been able to offset the drop in bookstore sales, both in Italy and France.
For Dada, 2012 is a year to consolidate the position it has reached in strategic markets and further expand its core business at European level. The Group will continue its initiatives to carefully monitor structural and operating costs, to support the gradual improvement in efficiency and profitability. On a like-for-like basis, revenue is expected to show an improvement compared to the previous year.
In view of ongoing market uncertainty, the RCS Group launched additional efficiency measures in both Italy and Spain, which will generate total benefits of EUR 70 million compared to 2011 (EUR 100 million compared to the assumptions contained in the Three-Year Plan for 2011-2013), and further measures may become necessary in terms of revising the business model and on the organisational front. In the first quarter of 2012, these measures had already generated total benefits of EUR 12.6 million.
Finally, the Group will continue its careful monitoring of net financial debt, which is expected to improve in 2012.
Barring unforeseen events, and notwithstanding the concerns chiefly raised by worsening macroeconomic conditions and consequently the general drop in consumer spending and investment, revenue is forecast to be lower in 2012 than in 2011, with the Group's profitability sustained by structural interventions and the ongoing, determined pursuit of cost containment measures, accompanied as ever by investment and above all by initiatives to support the development of the Group's multimedia activities and to safeguard and enhance the quality of its products. Net profit/loss is likely to be better than in 2011, which was significantly affected by write-downs on intangible assets.
Riccardo Stilli, the director responsible for drawing up the company's accounting statements, hereby declares, pursuant to article 154-bis, paragraph 2 of the Testo Unico della Finanza law, that the information contained in this press release accurately represents the figures contained in the Group's accounting records.
The interim report detailing the Group's results at 31 March 2012 will be made available to the public at the company's registered office and Borsa Italiana S.p.A., as well as on the company's website www.rcsmediagroup.it, according to the established schedule.
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