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July

26

2019

GEDI (CIR group): results for first half 2019

ECONOMIC AND FINANCIAL RESULTS AS OF 30 JUNE 2019

REVENUES € 302.9M
EBITDA ADJUSTED AT €23.5M
Q2 ADJUSTED OPERATING PROFIT AT €6.1M, IN LINE WITH 2018
NET RESULT - € 19.1M
(effect of disposal of Persidera € 17.3m; restructuring expenses € 2.5m)

NET FINANCIAL DEBT € 123.1M



Rome, 26 July 2019 – Today in Rome, 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 30 June 2019 as presented by Chief Executive Officer Laura Cioli.


Market performance

In the first five months of 2019, advertising investments fell by 4.0% compared to the corresponding period in the previous year (Nielsen Media Research figures).
Of the main segments, only radio and internet (excluding Search and Social) saw a positive trend, with respective growth of 2.2% and 2.0%. Television saw a decrease of 3.7%, while printed media was the format that suffered most, recording a further drop of 12.6%, with newspapers reporting -10.6% (-12.6% revenue for national papers and -7.9% for local papers) and magazines -15.4%.

According to ADS (Accertamento Diffusione Stampa) data, in the first five months of 2019, newspaper subscriptions and sales at newsstands fell by 7.7% (-6.1% for national newspapers and -8.8% for local newspapers). Including digital copies, overall circulation dropped by around 6.8%.


GEDI Group operating performance for the 1st half of 2019

Consolidated revenues
, totalling € 302.9m, fell by 6.1% compared to the first half of 2018. Revenue from digital activities accounted for 12.2% of consolidated revenue (15.2% for the Repubblica brand). To consider that digital subscriptions grew more then 35%.

Circulation revenues, amounting to € 134.5m, decreased by 5.2% compared to the previous financial year, in a market which, as indicated above, reports a decrease of 7.7% in the sales of daily newspapers at newsstands and via subscription.

Advertising revenue totalling € 147.3m, was down by 7.4% compared to the first six months of 2018.

Costs, including depreciation, are 5.5% lower compared to the first half of 2018. Personnel costs (-6.0%) and other costs (-5.0%) have decreased. It should be noted that these reductions only partially reflect the effects of the restructuring of the editorial structure of La Repubblica (which became operational during March) and the closure of two additional printing sites (from April).

Adjusted gross operating profit comes to € 23.5m, € 16.3m prior to application of IFRS 16, to be compared with € 21.9m in the first half of 2018. Gross operating profit amounted to € 20.2m (€ 13.0m net of the effects of IFRS 16), including restructuring charges totalling € 3.3m, mainly deriving from further rationalisation of the industrial structure and local sales structures of the Group's advertising concession holder.

Adjusted operating profit, excluding the restructuring expenses indicated above, comes to € 7.6m (€ 7.3m before application of IFRS 16), compared to € 12.4m in the first half of 2018.
In the second quarter, adjusted operating profit at €6.1m, in line with the same period of 2018. Consolidated operating profit came to € 4.3m (€ 4.0m after application of IFRS 16).

The net consolidated profit indicates a loss of € 19.1m (€ -18.4m excluding the effects of IFRS 16), due to the effects of the sale of Persidera (€ -17.3m) and restructuring charges with an impact on the net result totalling € 2.5m. The first half of 2018 ended with net consolidated profit of € 4.3m. More specifically, on 5 June 2019, the parent company GEDI Gruppo Editoriale SpA, in agreement with TIM SpA, the other seller, signed a binding agreement with F2i and Ei Towers to sell its 30% stake in Persidera, a non-core asset for the Group. The agreement involves a payment of € 74.5m to be received by GEDI, from which dividends distributed during 2019 will be subtracted at closing (equal to € 4.3m received in April). Interest accruing from 1 August through the closing date will instead be added to the payment.

Net financial debt at 30 June 2019 prior to application of the new accounting standard IFRS 16 amounts to € 123.1m, up over the € 103.2m recorded at the end of 2018 due to € 23.0m in payments relative to reorganisation plans in progress and the trend for working capital. Application of IFRS 16 has led to recording, at 30 June 2019, of payables for leasing and rights of use of € 61.2m, and therefore net debt after IFRS 16 application totals € 184.4m. Recall that on 9 April 2019, the Company entirely repaid the expiring convertible bond loan with a value of € 100m, partially via a revolving credit line established in April 2018.

The Group’s workforce, including fixed-term employees, in June numbered 2,259 employees, down by 100 compared to 31 December 2018. The average workforce for the period was 5.8% lower than in the first half of the previous year.


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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” (Consolidated Law on Finance) 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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26 July 2019 | 15:00 CEST

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