Half Year Financial Report at 30 June, 2017 · GEDI Gruppo Editoriale Società per Azioni Half-year financial report at 30 June 2017 55865_INT@1-8_Indice_EN_x 16/11/17 10:07 Pagina

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GEDI Gruppo EditorialeSocietà per azioni

Half Year Financial Report at 30 June, 2017

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GEDI Gruppo EditorialeSocietà per Azioni

Half-year financial reportat 30 June 2017



Index

Half-year report at 30 June 2017

Half-year report of the Board of Directors

• Operating performance and consolidated results of the GEDI Group at 30 June 2017 11• Operating performance and consolidated results of the GEDI Group at 30 June 2017 11

presentation of data with the scope being the same• Market Review 12• GEDI Group operating performance for the first half of 2017 12• Results by business area 13• Subsequent events to close of first half of the year and outlook 16• Consolidated results at 30 June 2017 17• Main risks and uncertainties to which GEDI Gruppo Editoriale SpA

and the GEDI Group are exposed 25• Other information 26

Condensed consolidated half year financial statements of the GEDI Group at 30 June 2017

Statement of Financial Position and Income Statement• Condensed Consolidated Statement of Financial Position 28• Condensed Consolidated Income Statement and Consolidated Statement of

Comprehensive Income 29• Condensed Consolidated Cash of Flow Statement 30• Condensed Consolidated Statement of Changes in Equity 31

Notes to the condensed consolidated half-year financial statements of the GEDI Group 35

Attachments 92

Certification of the condensed consolidated half-year 5financial statements pursuant toArt. 154-bis of Italian Legislative Decree No. 58 of 24 February 1998 99

Independent Auditors Report on the condensed consolidated half-year financial statements 103

5| GEDI Gruppo Editoriale |



7| GEDI Gruppo Editoriale |

Company name GEDI Gruppo EditorialeSocietà per Azioni

Share capital Euro 76,303,571.85

Tax ID code and Rome Companies’ Register enrolment No. 00488680588

VAT No. 00906801006

Registered office Rome, Via Cristoforo Colombo, 90Secondary office Rome, Via Cristoforo Colombo, 90

The Board of Directors:Chairman Marco De Benedetti

Managing Director Monica Mondardini

Directors Massimo BelcrediAgar Brugiavini Elena Cialliè Alberto ClòRodolfo De Benedetti Francesco DiniJohn Elkann Silvia Merlo Elisabetta OliveriLuca Paravicini CrespiCarlo PerroneMichael Zaoui

The Board of Statutory Auditors:Chairman Stefania Mancino

Statutory Auditors Pietro ManzonettoMarina Scandurra

Independent Auditors KPMG SpA



Half-year report of the Board of Directors

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Operating performance and consolidated resultsof the GEDI Group at 30 June 2017

The main aggregated economic-financial indicators at30 June 2017 are provided below; with specific refe-rence to the economic indicators, given the differencein the perimeter between the first half of 2017 and thefirst half of 2016 due to the deconsolidation of 5 publi-cations during the second half of 2016, it should benoted that the comparison between the two periods isnot representative of performance.

Consolidated results 1st half 1st half(€mil) 2016 2017Revenues, of which: 292.9 287.3• circulation 100.9 84.3• add-on products and sundries 21.3 18.5• advertising 170.7 184.6Gross operating profit 25.2 22.7Operating profit 17.7 15.9Net profit (loss) of assets destined to continue 11.2 6.4Profit (loss) from discontinued operations and assets held for sale (1) 1.0 1.0Net profit 12.1 7.4

31-Dec 30-Jun(€mil) 2016 2017Net financial position 31.7 26.4Shareholders’ Equity (incl. minority interests) 598.4 689.0• Group Shareholders’ Equity 597.9 688.5• Minority interests 0.5 0.5Employees 1,940 1,956

(1) The “Profit (loss) from discontinued operations and assets held for sale ” inclu-des the capital gains realised with the sale of All Music, a company of the publi-shing Group of Italian general television station Deejay TV, to the new publisherDiscovery Italia on 30 January 2015.

Operating performance and consolidated results ofGEDI Group at 30 June 2017, presentation of dataon a like - for like basis

On 27 June 2017, the merger operation was comple-ted of the companies Italiana Editrice SpA, Publikom-pass SpA and Nexta Srl (“ITEDI Group”) into GEDI.

The operation was carried out through a reserved sha-re capital increase subscribed to Fiat Chrysler Auto-mobiles N.V. (“FCA”) and to Ital Press Holding SpA(“IPH”), which was released by the latter with a con-tribution in kind of the shares, aggregately represen-ting the entire share capital of Italiana Editrice SpA. As a result of the transaction, on 27 June 2017, GEDIgained control of the ITEDI Group. The date of 30June 2017 was taken as the consolidation date, andconsequently the Income Statement for the GEDIGroup relating to the first six months of 2017 doesnot include the Income Statement for ITEDI Group,where the economic effects will only be consolidatedas from 01 July 2017. On the other hand, The Sta-tement of Financial Position at 30 June 2017, inclu-des the one of the ITEDI Group. When assessing the economic results for the first sixmonths of 2017 and their comparison with the cor-responding period in 2016, if the merger with ITE-DI at the end of June does not represent an impactas outlined above, it is nonetheless necessary to takeinto consideration that during the second half of 2016,5 publications were deconsolidated, to ensure com-pliance with circulation threshold standards establi-shed by current regulations, and that consequently thebusiness perimeter during the first half of 2017 dif-fers and is reduced significantly in relation to whatit had been in the first half of 2016. Specifically, thedeconsolidation operations referred to:• sale on 28 October 2016 of the entire stake of 71%

in Seta SpA, publishing company of the “Alto Adi-ge” and “Il Trentino” newspapers;

• sale on 01 November 2016 of the business unitincluding the newspapers “Il Centro” and the rela-tive printing centre, and “La Città di Salerno”;

• as from 01 December 2016 leasing of the businessunit including the newspaper “La Nuova Sarde-gna” to the company DB Information SpA.

To ensure data was comparable, an IncomeStatement was prepared for the first half of2016 with the scope being the same, in otherwords, by unbundling the aforementionedsales, where the main ratios are representedbelow. The information on a like - for like

11Half-year Financial Statements at 30 June 2017 | GEDI Gruppo Editoriale

Half-year Report of the Board of Directors at 30 June 2017


basis for the first half of 2016 was also cal-culated with regard to the local newspapersand digital divisions, where the trend is shownin the paragraph dedicated to the results perbusiness area.

Consolidated results scope being the same 1st half 1st half(€mil) 2016 2017Revenues, of which: 282.7 287.3• circulation 89.3 84.3• add-on products and sundries 22.8 18.5• advertising 170.6 184.6Gross operating profit 22.8 22.7Operating profit 15.7 15.9Net profit (loss) of assets destined to continue 9.4 6.4Profit (loss) from discontinued operations and assets held for sale (1) 1.0 1.0Net profit 10.3 7.4

(1) The “Profit (loss) from discontinued operations and assets” includes the capi-tal gains realised with the sale of All Music, a company of the publishing Groupof Italian general television station Deejay TV, to the new publisher Discovery Ita-lia on 30 January 2015.

Market Review

After the slight recovery in 2016, advertising inve-stments in the first five months of 2017 came downby 1.9% compared to the corresponding period in2016 (Nielsen Media Research figures).With regard to media, radio posted significantgrowth compared to the same period in 2016(+4.1%); television and internet (excluding Searchand Social) were essentially the same as the corre-sponding period in 2016 (-0.2% and +0.6% respec-tively), whereas printing services dropped by8.6%, with newspapers recording -10.3% (-13.2%on national revenue and -8.0% on local), and perio-dicals at -6.1%. With regard to circulation, the ADS (Accertamen-to Diffusione Stampa) figures referring to theperiod from January to May 2017 indicate a8.9% drop in sales of newspapers at newsstandsand subcription.

GEDI Group operating performance for the 1st halfof 2017

The Group ended the first half of 2017 with a netprofit of €7.4 million.

Consolidated revenues, amounting to €287.3 mil-lion, showed an increase of 1.6% on the first halfof 2016 on a like - for like basis (-1.9% if com-pared with the sare period).

Circulation revenues, amounting to €84.3 million, disclo-sed a decrease of 5.7% when compared with the sameperiod last year on like - for - like basis, in a marketwhich, as indicated above, continues to report a signi-ficant decrease in the circulation of daily newspapers.

Advertising revenues rose by 8.2%, recording a 4.3%drop on the Group’s media and a significant increa-se in terms of third party concessions, due to thenew Radio Italia, La Stampa and il Secolo XIX con-cessions for national advertising. With reference to the Group’s media, radio reve-nues grew by 5.0%, confirming the positive trendrecorded in the previous period.Revenue from the internet rose slightly (+0.8%), inline with market levels.Finally, printing services recorded a significant drop (-8.7%), due to the negative trend of the newspapersand periodicals market, which impacted especially onnational newspapers, whereas the local newspapers sho-wed a more contained contraction.

Costs came down by 5.6% on like - for like basis;both fixed personnel costs (-4.4%) and other costs(-6.5%) dropping.

The gross operating profit amounted to €22.7 millionand was stable in relation to the figure from the firsthalf of 2016 on like - for like basis (€22.8 million),despite the adverse development in the sector.

The consolidated operating profit was €15.9 million,equivalent to 2016 on like - for like basis (€15.7million).

12 | GEDI Gruppo Editoriale | Half-year Financial Statements at 30 June 2017


Consolidated net profit amounted to €7.4 million, com-pared to €10.3 million during the first half of 2016 sco-pe being the same; the drop in the net result is main-ly attributable to the fair value amortisation of the digi-tal terrestrial frequencies implicit in the value of the Per-sidera SpA shareholding, recorded as from the year-end at 31 December 2016.

The net financial position at the end of June 2017 waspositive for €26.4 million, compared to €31.7 mil-lion at the end of 2016 and the €18.2 million at 30June 2016. The decrease compared to the end of2016 is due to the ITEDI consolidation that resultsin negative net financial debt for €7.8 million.

The Group’s workforce, including fixed-term emplo-yees, at the end of June, numbered 1,956 emplo-yees and the average workforce for the period, sco-pe being equal, was 1.9% lower than in the firsthalf of 2016.

Results by business area

Repubblica Division

OperationsThe “Repubblica Division” includes the develop-ment, production and marketing of publishing pro-ducts relating to the newspaper la Repubblica(national newspaper, 9 local editions and weeklysupplements Affari&Finanza, Il Venerdì and D). Atthe end of 2016, a new cultural insert Robinson wasintroduced into the newspaper, appearing at news-stands every Sunday with 40 pages dedicated to sto-ries, critiques, appointments, experiences, places,reports, people and dialogues. The division does notinclude the digital activities linked to the newspa-per, which are contained in the Digital Division. On the basis of the ADS figures (progressive to May2017), la Repubblica recorded total circulation of200 thousand hard copies, of which 184 thousandsold on newsstands and via subscriptions; further-more, on the basis of the latest Audipress figures(Survey 2017/I), there are 2.0 million daily readersof the traditional edition.

The newspaper marketIn January – May 2017, sales of newspapers atnewsstands and through subscription dropped by8.9% within this segment; national newspapersreported a decrease of 14.5% (internal calculationbased on ADS figures).Advertising revenues from daily newspapers fell10.3%: national advertising dropped by -13.3% for national newspapers and 14.4% for localand 11.2% for other types (FCP).

Division’s consolidated operating data

1st half 1st half Δ%(€million) 2016 2017 2017/2016Sales 104.0 89.1 -14.4%Operating and personnel costs (100.5) (88.6) -11.8%Gross operating profit 3.5 0.4 n.s.Depreciation, amortization and write-downs (1.5) (1.8) +20.0%Operating profit 2.0 (1.4) n.s.

Total revenues for the Division amounted to €89.1 mil-lion, down 14.4% with respect to the €104.0 millionin the first half of 2016, mainly due to the negativemarket trends as outlined above.

Costs decreased by 11.8% with respect to those inthe same period of 2016, thanks to the reductionof industrial, editing and commercial costs.

Operating profit recorded a loss of €1.4 million com-pared to the profit of €2.0 million in the first half of2016. The drop in operating profit compared to thecorresponding period the previous year is attributa-ble for €2.1 million to the drop in the margin fromadd-on initiatives sold together with newspapers, reflec-ting the specific weakness in the segment.

Local Newspapers Division

OperationsSubsequent to the deconsolidation operations refer-red to above, the Division includes 13 publicationswith a daily readership of 1.9 million (Audipress



2017/I). Based on ADS statistics, overall circulationin the first five months of 2017 came to 201 thou-sand average copies printed.It should also be remembered in respect of the cor-porate reorganization project referring to theGroup’s printing plants, on 01 July 2016 the busi-ness units of Finegli Editoriale relating to the prin-ting centres in Mantua, Padua, Gorizia, Livorno andSassari were transferred to the subsidiary Rotoco-lor, including the industrial assets, the relevant staffcomponent and related commercial contracts. Thisconcentration was done with the objective of ratio-nalising the printing centres and making them moreefficient by realising economies of scale, greater fle-xibility in services and supply, as well as a betterpositioning on the reference market so as to poten-tially address a non-captive client base.

The local newspapers marketIn the period January - May 2017, local newspapersreported a drop in newsstand and subscription salesof 7.7% on the same period the previous year (inter-nal processing based on ADS figures), which wasmore contained than national newspapers as refer-red to above (-14.5%). Advertising revenues drop-ped 8.3% (source FCP), with national advertising at-13.2% and local advertising coming to -6.7%.


1st half 1st half 2016 1st half Δ% 2017/2016

(€million) 2016 on like 2017 scopefor like basis the same

Sales* 75.5 56.8 54.9 -3.3%Operational costs and personnel costs (63.2) (46.4) (46.8) +0.9%Gross operating profit 12.4 10.4 8.0 -22.4%Amortisations/depreciations and write-downs (3.3) (2.8) (0.8) -70.6%Operating profit 9.1 7.6 7.2 -4.9%

* net of intragroup revenues

Total revenues for the Group’s local newspapersamounted to €54.9 million, down 3.3% with respectto the first half of 2016 (-27.3%on like - for like basis,therefore without considering the 5 publications inthe division that left the Group’s scope).

Costs on like - for like basis and amortisations/depre-ciations decreased by 3.1% on like - for - likebasis with respect to the first six months of theprevious year, with important economies in theindustrial, printing, management and administra-tion areas.

The Operating profit amounted to €7.2 million, andis essentially in line with the result of the first sixmonths in 2016 on like - for like basis (€7.6 mil-lion), with a margin of 13.2%.

Periodicals Division

OperationsThe “Periodicals Division” includes the publicationsL’Espresso, National Geographic, Limes, Microme-ga and Guide de L’Espresso. As from 7 August 2016a new marketing formula for L’Espresso was intro-duced, which is sold every Sunday together with thenewspaper la Repubblica.On the basis of the latest Audipress statistics (Sur-vey 2017/I), L’Espresso confirmed itself in firstplace among news magazines, with 1.5 millionreaders.

The periodicals marketIn the first five months of 2017, the periodicals sec-tor reported a 4.4% decrease in circulation with regardto weekly publications and 14.0% for monthlies (inter-nal processing based on ADS figures).Advertising sales recorded a decline of 6.1%, demon-strating a less negative performance than that of theentire press segment (-8.6%).


1st half 1st half Δ%(€million) 2016 2017 2017/2016Sales 10.5 10.9 +4.0%Operating and personnel costs (13.3) (11.0) -17.7%Gross operating profit (2.8) (0.0) n.s.Depreciation, amortization and write-downs (0.1) (0.2) +21.7%Operating profit (2.9) (0.2) n.s.



Total revenues for the division are €10.9 million, upby 4.0% compared to the first half of 2016.

Costs fell by 17.7% when compared with the corre-sponding period last year, thanks to the containmentof all the main expenditure items.

The Division recorded an Operating profit that wasessentially stable, -€0,2 million compared to the lossof €2.9 million in the first six months of 2016. Theimprovement in the Operating profit in respect of thecorresponding period the previous year is essentiallyattributable to the new distribution formula forL’Espresso (combined on Sundays with la Repubbli-ca at a price of €1) and the higher margin result fromthe add-on initiatives sold in conjunction withvarious periodicals.

Digital Division

OperationsThe “Digital Division” runs the digital business ofthe GEDI Group; the activities concern all theGroup brands and are developed via all the techno-logical platforms: websites, mobile applications forsmartphones and tablets and smart TV.Based on the Audiweb survey that records “TotalDigital Audience” data, in other words figureswhich measure the navigation conduct of not justPC users but also those using smartphones andtablets, the GEDI Group, with an average of 2.2million single users a day and 13.4 million indivi-dual users on all its sites, was confirmed as theeighth leading operator in the entire Italian digitalmarket (including suppliers of services and plat-forms such as Google, Facebook, Whatsapp, Ama-zon, etc.) and the first among newspaper publishers.In the first five months of the year, Repubblica.itconfirmed its ranking as the leading Italian infor-mation website with 1.5 million users on an ave-rage day, and a gap on the second leading Italianinformation website of 32%. During the first six months of 2017, connections fromsmartphones continued to growth, impacting on ave-rage for 58% during the course of a day. The continued

increasing significance of the mobile segment resultedin the gradual reorganization of the Repubblica.it web-site, which starting with the detail pages, involved theentire site and was completed with the release of the newhome page firstly for desktops and then for mobiles.With regard to Local newspapers, all the sites com-bined reported an average Total Digital Audience of2.4 million monthly individual users (AWDB data),with the weighting of mobile traffic growing,thanks to an increasingly significant presence onsocial networks. In addition, during the first half of 2017, the Grou-p’s brands were further strengthened on the socialnetworks: currently the GEDI Group’s pages totalover 31.5 million followers on Facebook and Twit-ter. More specifically, Repubblica remains the lea-ding Italian newspaper in terms of the number offans on Facebook (3.4 million) and Twitter (2.7 mil-lion) and among the top at international level regar-ding the involvement rate of readers.Finally, the premium business associated with sub-scriptions to digital editions were basically in linewith the first half of 2017. The success of the lime-sonline site was confirmed during the period. Thisis the first premium Group digital product, confir-ming that on-line users were prepared to subscri-be to access accurate and in-depth information.


1st half 1st half 2016 1st half Δ% 2017/2016

(€million) 2016 on like 2017 on likefor like basis for like basis

Sales 26.6 25.7 26.1 +1.6%Operational costs and personnel costs (22.4) (21.9) (24.5) +11.8%Gross operating profit 4.2 3.8 1.7 -56.5%Amortisations/depreciations and write-downs (0.3) (0.3) (0.3) -1.2%Operating profit 3.9 3.6 1.4 -60.5%

Revenues for the Division, equal to €26.1 million,are slightly up on those of the first half of 2016,on like - for like basis (+1.6%).

Operating profit stood at €1.4 million, with a mar-gin of 5.4%.



Radio Division

OperationsThe “Radio segment” includes the Group’s three natio-nal radio stations Radio Deejay, Radio Capitaland m2o. On the basis of the last Radio Monitor survey(2016), the three Group radio stations confirmedthe satisfactory listener results: on an average day,Radio Deejay achieved 4.8 million listeners to posi-tion itself in second place among private Italianradio stations; Radio Capital and m2o both repor-ted an audience of 1.6 million.

The Radio marketAccording to the Radio Monitor survey, total dai-ly listeners over the age of 14 came to 35.5 mil-lion, up on the 35.0 million in the previous sur-vey (2015 Radio Monitor), which was also dueto the increasing use of new ways of listening tothe radio (computer, smartphone, tv, etc.), whichprovide listeners with greater contact opportu-nities.Radio advertising grew by 4.1% in the first fivemonths of 2017.


1st half 1st half Δ%(€million) 2016 2017 2017/2016Sales 29.4 29.6 +0.8%Operating and personnel costs (21.6) (20.4) -5.3%Gross operating profit 7.8 9.2 +17.5%Depreciation, amortisation and write-downs (1.3) (1.2) -5.7%Operating profit 6.5 7.9 +22.2%

Total sales for the Group’s radio stations at €29.6million, recorded a slight increase of +0.8%, com-pared to the corresponding period the previousyear. The increase in advertising revenue was par-tly offset by the lower revenue resulting from thesale of programmes to third party television ope-rators.

Costs came down by 5.3% compared to the first sixmonths of 2016.

Operating profit stood at €7.9 million compared tothe €6.5 million of the corresponding period lastyear, with a margin of 26.7%.

Subsequent events to the close of the first halfof the year and outlook

There were no significant events subsequent to theclose of the first half of the year.On 27 June 2017, the merger operation was comple-ted between the GEDI Group and Italiana EditriceSpA, after the share capital increase was concluded,as approved by the Shareholders’ Meeting on 27 April,through the stipulation of a deed to transfer to GEDIthe equity investments in ITEDI held by FIAT Chry-sler Automobiles S.p.A. (FCA) and Ital Press HoldingSpA (IPH) equal to 77% and 23% of the share capi-tal, respectively. Following this increase, CIR holds43.4% of GEDI, while the shareholders of ITEDI, FCAand IPH, are assigned 14.63% and 4.37% of the Com-pany’s share capital, respectively.The transaction gave rise to the largest group for dai-ly and multimedia news and information in Italy, withpublication assets of considerable value, providingsignificant industrial value, as it integrates twogroups with complementary businesses, and aims tocreate increasing economies of scale. Based on a com-plete offering of multimedia content and hard-copyand digital information services, the new group willbe in a financial position and of a size that can respondto challenges in the sector, by promoting innovativeand original projects developed for a number of distri-bution channels.With regard to the outlook for 2017, based on thetrends recorded in the first six months, there are noimprovements expected for the negative trends thathave marked the sector for a number of years now;to counteract this, the Group continues in its com-mitment to developing the digital sector, where itis a sector leader, and to containing costs. In theabsence of unforeseen circumstances, the Group willrecord a positive result at year end, as the mergerwith ITEDI will open up new opportunities.

16 | GEDI Gruppo Editoriale | Half-yearl Financial Statements at 30 June 2017



Consolidated results at 30 June 2017

Income Statement

The Group’s Consolidated Income Statement for the first six months of 2017 is presented below,on a comparative basis with the corresponding period the previous year. In ensure to ensuredata is more compatible, the Income Statement for the first half of 2016 with the scope beingthe same is presented below, in other words, by unbundling the results for the publications invol-ved in the deconsolidation during the second half of 2016, as referred to above.

1st half 1st half 2016 1st half€million 2016 on like - for like basis 2017Revenues 292.9 282.7 287.3

Change in inventories (0.1) (0.1) 0.2

Other operating income 5.0 4.9 6.0

Purchases (28.5) (26.6) (23.1)

Costs for services (129.9) (133.9) (146.1)

Other operating charges (4.7) (4.5) (4.8)

Personnel costs (109.5) (99.7) (96.7)

Depreciation, amortisation and write-downs (7.5) (7.2) (6.9)

Operating profit 17.7 15.7 15.9 Financial income/(expense) (4.5) (4.4) (4.6)

Valuation of investments at equity 2.2 2.2 (0.7)

Profit (loss) before taxes 15.4 13.4 10.6 Taxes (4.2) (4.0) (4.1)

Net profit (loss) of assets destined to continue 11.2 9.4 6.4 Profit (loss) from discontinued operations and assets held for sale 1.0 1.0 1.0

Net profit 12.2 10.4 7.4 Minority interests (0.1) (0.1) (0.1)

GROUP PROFIT (LOSS) 12.1 10.3 7.4

Revenues and operating results were discussed in detail in the first part of this Report, to whichwe make reference for a more detailed analysis.


| GEDI Gruppo Editoriale | Half-year Financial Statements at 30 June 2017

Statement of Financial Position

The Consolidated Statement of Financial Position is presented below.

ASSETS 31 Dec 30 Jun(€mil) 2016 2017Intangible assets with an indefinite useful life 466.4 591.0 Other intangible assets 3.7 5.4 Intangible assets 470.1 596.4 Property, plant and equipment 83.9 101.8 Investments valued at equity 129.1 124.1 Other investments 3.3 4.6 Other non-current receivables 2.0 2.2 Deferred tax assets 16.0 22.8 NON-CURRENT ASSETS 704.4 851.8 Inventories 10.2 13.8 Trade receivables 174.5 180.4 Marketable securities and other financial assets 0.2 0.1 Tax receivables 15.5 16.9 Other receivables 23.4 33.4 Cash and cash equivalents 148.5 170.0 CURRENT ASSETS 372.3 414.5 TOTAL ASSETS 1,076.7 1,266.3

LIABILITIES 31 Dec 30 Jun(€mil) 2016 2017Share capital 61.8 76.3 Reserves 174.7 237.4 Retained earnings (losses) 351.0 367.4 Net profit (loss) 10.4 7.4 Group Shareholders’ Equity 597.9 688.5 Minority interests 0.5 0.5 SHAREHOLDERS’ EQUITY 598.4 689.0 Financial debt 83.5 93.8 Provisions for risks and charges 46.8 47.7 Employee termination indemnity and other retirement benefits 47.8 60.6 Deferred tax liabilities 89.1 121.2 NON-CURRENT LIABILITIES 267.3 323.2 Financial debt 33.6 49.9 Provisions for risks and charges 20.6 36.9 Trade payables 96.0 99.6 Tax payables 10.0 11.2 Other payables 50.8 56.5 CURRENT LIABILITIES 211.1 254.1 TOTAL LIABILITIES 478.4 577.3 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1,076.7 1,266.3

18


Half-year Financial Statements at 30 June 2017 | GEDI Gruppo Editoriale

Statement of Financial Position

Intangible assets, amounting to €596.4 million, up by €126.3 million compared to 31 Decem-ber 2016 (€470.1 million) due to the ITEDI consolidation, which resulted in a provisional andindistinct fair value posting for the two publications “La Stampa” and “Il Secolo XIX” for €107.4million and goodwill recorded for €17.2 million.With regard to the process for measuring the fair value of the assets and liabilities acquired fromthe ITEDI Group, it should be noted that this process has not yet been completed, as permit-ted by IFRS 3; consequently, the fair value measurment of asset acquired and liability assumed(that are shown in this statement of financial position as variations of consolidation perime-ter), and the the residual value currently attributed to goodwill, could be different once the allo-cation process will be completed. With the ITEDI consolidation, there was also an increase of €1.7 million in the Other intangi-ble assets relative to concessions and licenses, industrial patents and intellectual property rights.

Property, plant and equipment amounted to €101.8 million, up by €17.9 million compared tothe end of 2016 (€83.9 million) due to the ITEDI consolidation for €21.4 million and net capi-tal expenditure for the period for €2.4 million, which were only partially offset by deprecia-tions for €5.9 million.

Investments amounted to €128.7 million, down by €3.7 million compared to 31 December 2016.With regard to the interest held in Persidera SpA, the portion relating to the Group’s result inclu-des the amortisation of fair value the digital terrestrial frequencies recorded at the time acqui-sition for an amount of €2.1 million.

Other non-current receivables amounted to €2.2 million, increasing by €0.2 million with respectto 31 December 2016 (€2.0 million), due to the ITEDI consolidation.

Deferred tax assets totalled €22.8 million (€16.0 million at 31 December 2016) and include timingdifferences between amounts recorded in the statement of financial position and those recogni-zed for tax purposes. The €6.8 million increase compared to the end of 2016 is attributable for€7.6 million to the ITEDI consolidation.

Inventories, amounting to €13.8 million, include inventories of paper, printing materials, publica-tions and add-on products. The €3.6 million increase compared to 31 December 2016 is due for€4.4 million to the entry of ITEDI into the scope of consolidation.

Trade receivables amounted to €180.4 million, up €5.9 million on 31 December 2016. The ITE-DI consolidation determined an increase of €17.4 million in this item.

Tax receivables amounted to €16.9 million, up by €1.4 million (of which €0.7 million related toITEDI) compared to the €15.5 million at 31 December 2016. It should be recalled that at 31December 2016, advances were reported net of the theoretical tax liability, while at 30 June2017 the tax receivable and the tax payable were reported separately.

Other receivables amounted to €33.4 million and include advances to suppliers, agents and free-lance associates, prepaid rent and prepaid distribution rights for add-on products sold optio-

19



nally with publications and radio programmes to be launched in the second half of the year.Moreover, the item includes €8.6 million related to a tax bill referring to the 1993 and 1994financial years in relation to which the Group has an appeal outstanding. The entry of ITEDIin the scope of consolidation resulted in an increase in this item for €7.4 million.

Cash and cash equivalents totalled €170.0 million, recording a €21.5 million increase on 31 Decem-ber 2016. This is attributable to the cash flow from current operations for €7.2 million, the cashcontributed by ITEDI for €9.0 million, the collections from the sales of assets and investments for€4.2 million and the positive flows generated from financing activities in respect of factoring.

Shareholders’ equity at 30 June 2017 amounted to €689.0 million (€598.4 million at 31 Decem-ber 2016), of which €688.5 million belonging to the Group (€597.9 million at the end of 2016),and €0.5 million relating to minority interests (€0.5 million at 31 December 2016). Own sha-res held by the Parent Company at 30 June 2017, whose value is subtracted from the sharehol-ders’ equity, were 21,354,993 and represented 4.198% of the share capital.

Non-current financial debt totalled €93.8 million, up by €10.3 million on 31 December 2016, ofwhich €8.1 million resulting from the ITEDI consolidation. This item also includes the valueof the equity-linked Bond issue for €100 million placed in April 2014, maturing on 09 April2019 and with an interim coupon at a fixed rate of 2.625% per annum. At 30 June 2017, thedebt component amounted to €91.3 million (of which €85.7 million non-current and €5.6 mil-lion current). The item also includes €8.1 million (total value €9.3 million, of which: currentportion is €1.2 million), referring to the loan contracts with a pool of banks signed by compa-nies in the ITEDI Group during 2014: the spread is fixed at 0.75% until 31 December 2017,and increased for subsequent years over a range of between 1.75% and 2.50%; the amortisa-tion began during the 2016 financial period and will be completed in the 2022 financial year.

Provisions for risks and charges totalled €84.6 million, up by €17.2 million compared to 31 Decem-ber 2016 due to the ITEDI consolidation (€18.3 million). Uses during the period for a total of€3.8 million refer for €1.4 million to disbursements within the scope of the business reorgani-sation plans underway.

Provisions for the Employee Termination Indemnity and other retirement benefits amounted to €60.6million in total (€47.8 million at 31 December 2016). The €12.8 million increase on the end of2016 is attributable to the ITEDI consolidation for €14.0 million and the financial effect of thevaluation of provisions (interest cost) and discounted back value of accruals (service cost) for atotal of €0.5 million, which was only partially offset by the employee termination indemnities andfixed indemnities paid out in the period (€1.7 million).

Deferred tax liabilities amounted to €121.2 million, up €32.1 million with respect to the €89.1million at the end of 2016, of which €31.3 million was attributable to the ITEDI consolida-tion.

Current financial debt, amounting to €49.9 million, includes both the short-term portion of thebond for €100 million placed in April 2014 and the amounts due to the factoring firm relatingto the freeing up of the receivables of the concession holder A. Manzoni & C. and ITEDI.

20



Trade payables totalled €99.6 million, increasing by €3.6 million compared to the €96.0 millionat 31 December 2016; the effect of the ITEDI consolidation resulted in a €17.9 million in thisitem, which was almost entirely offset by the drop in payables for investments (-€2.5 million) and the lower costs incurred during the second quarter of 2017 compared tothe last three months of 2016.

Tax payables for €11.2 million recorded an increase of €1.2 million compared to 31 December2016. It should be noted that in all the interim accounts, tax receivables and payables accruedin the period are reported separately. The ITEDI consolidation determined an increase of €2.0million in this item.

Other payables totalled €56.5 million, up €5.7 million compared to the €50.8 million at 31December 2016 mainly as a result of the ITEDI consolidation (€11.6 million) and the paya-bles accrued relating to the thirteenth month wage and leave, which was only partially off-set by the settlement of the social security charges and payments to staff within the sphereof the business reorganization plans underway.

21



Changes in the Consolidated Net Financial Position

1st half 1st half€mil 2016 2017SOURCES OF FINANCENet profit (loss) for the period, including minority interests 11.2 6.4 Profit (loss) from discontinued operations 1.0 1.0 Depreciation, amortisation and write-downs 7.5 6.9 Actuarial assessment stock option plans 0.7 0.3 Net change in provisions for personnel costs (1.9) (1.2) Net change in provisions for risks and charges (4.5) (1.2) Losses (gains) on disposal of fixed assets 0.0 (0.0) Losses (gains) on disposal of investments (1.0) (1.0) Adjustments for investments valued at equity 1.0 4.9 Self-financing 13.9 16.2 Decrease (Increase) in non-current receivables 0.1 0.0 Increase in payables/Decrease in deferred tax assets 4.2 1.6 Increase in tax payables/Decrease in tax receivables (1.9) (1.5) Decrease (Increase) in inventories 1.2 0.8 Decrease (Increase) in trade and other receivables 27.0 0.9 Increase (Decrease) in trade and other payables (9.9) (13.1) Change in working capital 20.7 (11.3) CASH FLOW FROM CURRENT OPERATIONS 34.6 4.9 Net disposals of investments - 3.2 Other changes 0.7 - Cash flow generated by sale of assets 1.0 1.0 TOTAL SOURCES 36.3 9.0 USESNet capital expenditure in fixed assets (5.7) (5.8) Net capital expenditure in investments (0.9) (7.8) Purchase of own shares (0.1) 0.2 Other changes (0.7) (1.0) TOTAL USES (7.4) (14.3) Financial surplus (deficit) 28.9 (5.3) OPENING NET FINANCIAL POSITION (10.7) 31.7 CLOSING NET FINANCIAL POSITION 18.2 26.4

22



Statement of Cash Flows and Net Debt

The comparison between cash flows from 01 January 2017 to 30 June 2017 and those betweenJanuary and June 2016 are reported in the table that follows.

1st half 1st half€mil 2016 2017OPERATING ACTIVITIESNet profit (loss) on assets destined to continue, own and minority interests 11.2 6.4 Adjustments:- Depreciation, amortisation and write-downs 7.5 6.9 - Actuarial assessment stock option plans 0.7 0.3 - Net change in provisions for personnel costs (1.9) (1.2) - Net change in provisions for risks and charges (4.5) (1.2) - Losses (gains) on disposal of fixed assets 0.0 (0.0) - Losses (gains) on disposal of investments and securities (1.0) (1.0) - Adjustments for investments valued at equity 1.0 4.9 - Loss (profit) from discontinued operations 1.0 1.0 Self-financing 13.9 16.2 Changes in current assets and other flows 22.9 (9.0) CASH FLOW FROM OPERATING ACTIVITIES 36.8 7.2 of which:Interest received (paid) (1.4) (1.5) Income taxes received (paid) 2.8 (2.3) INVESTING ACTIVITIESOutlay for purchase of fixed assets (5.8) (5.8) Outlay for purchase of investments (0.9) (0.0) Collections from sales 0.0 3.2(incr.) decrease financial receivables held for sale (1.2) 0.2 Cash flow generated by ITEDI acquisition - 9.0Cash flow generated by sale of assets 1.0 1.0 CASH FLOW FROM INVESTING ACTIVITIES (6.9) 7.6 FINANCING ACTIVITIES(Purchase) sale of own shares (0.1) 0.2 Issue (repayment) of financial debt (1.5) 7.3 (Dividends paid) - - Other changes (0.7) (1.0) CASH FLOW FROM FINANCING ACTIVITIES (2.2) (6.6) Increase (Decrease) in cash and cash equivalents 27.7 21.4 Cash and cash equivalents at beginning of the period 110.5 148.5 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 138.2 169.9

Cash flow from operating activities in the first half of 2017, amounting to €7.2 million, was down€29.5 million with respect to that generated in the same period in 2016 (€36.8 million): thisincrease in self-financing (€16.2 million in the first six months of 2017 compared to €13.9 mil-lion in the first six months of 2016) was more than absorbed by the worsening in working capi-

23



tal (down by €9.0 million in the first half of 2017 compared to the upward change of €22.9million in the corresponding period the previous year), which in the first half of 2016 had bene-fited from the recovery of arrears in collections from the subsidiary A.Manzoni&C., with thedelay attributable to the change in the computer system during the second half of 2015.

Cash flow from investing activities, was positive for €7.6 million, referring primarily to the reve-nue from the sales of assets and investments for a total of €4.2 million and the cash contribu-ted by the ITEDI Group for €9.0 million, which was only partly offset by payments for inve-stments in properties for €5.8 million. With regard to capital expenditure, during the first half of 2017, investments were made in rota-ry presses and other printing equipment of la Repubblica and of local newspapers (€0.7 mil-lion); offices and editorial offices were renovated (€0.6 million); information and publishingsystems were updated and network infrastructures upgraded (€1.5 million), and low and high-frequency radio broadcasting equipment was upgraded (€0.3 million). During the six-monthperiod, a portion of payables on capital investments outstanding at 31 December 2016, amoun-ting to €2.5 million, was settled. In so far as collections from sales are concerned (€4.2 million), these refer to the six-monthlyportion of the residual sales price for All Music (€1.0 million) and the remainder of the salesprice for the investment in SETA (€3.2 million).

The cash flow from financing activities was positive for €6.6 million, mainly due to higher finan-cial debt in respect of factoring.

The net financial position of the Group is shown below.

30 Jun 31 Dec 30 Jun(€million) 2016 2016 2017Financial receivables from Group companies 0.2 0.2 0.2 Financial debt to Group companies - - - Cash and deposits 138.1 148.4 169.9 Bank overdrafts (0.1) (0.0) (0.1) Cash and cash equivalents 138.2 148.5 169.9 Marketable securities and other financial assets 1.8 0.2 0.1 Bond issue (86.7) (88.9) (91.3) Other bank debt - - (9.3) Other financial debt (35.1) (28.1) (43.0) Other financial assets (liabilities) (120.0) (116.8) (143.5) NET FINANCIAL POSITION 18.2 31.7 26.4

24



Main risks and uncertainties to which the GEDI Gruppo Editoriale SpA and the GEDI Gruppo are exposed

Main risk factors to which the Group is exposed as a consequence of the segment in which itoperates are classified in the following categories:- risks connected with the general performance of the economy;- risks relating to operations;- financial risks.

Reference is made to the Report on Operations and the Consolidated Financial Statements at31 December 2016 for a description of risks. With regard specifically to risks of a tax-related nature associated with the recent sentence ofthe Regional Tax Commission issued in May 2012 which concerned the Parent Company, the-se have not changed in relation to 31 December 2016 and can therefore be considered as mere-ly “possible”.In this regard, it should be recalled that on 18 May 2012, the Rome Regional Tax Commissionfiled sentence 64/9/12 which declared the partial legitimacy of two tax assessments concerningamong other aspects the complex corporate events which led to the division between CIR andFININVEST of the Arnoldo Mondadori Editore Group and the subsequent stock market listingof la Repubblica.In detail, the CTR declared that the payment of taxation for Lire 440,824,125,000 (€227.7 mil-lion) for capital gains realized and undeclared was legitimate, in its opinion, along with Lire13,972,000,000 (€7.2 million) for the recovery of the costs assumed as non-deductible pertai-ning to dividends and the tax credit, with application of the minimum legal fines and the orde-ring of payment of the legal costs. On the basis of the opinions updated at 30 June 2017, this sentence would give rise to a maxi-mum risk in terms of amount of €380.7 million (including additional taxes assessed for €121.4million, interest for €137.9 million and fines for €121.4 million): this value derives from thefact that the Tax Authorities did not limit themselves simply to refusing to recognize the taxbenefits (undue withholdings) of the additional values recorded at the time of the allocation ofthe “cancellation deficit” in the merger process, but unexpectedly demanded the immediate andfull taxation of this deficit in as far as in itself lacking any income-related values, on the samefooting as a “realized” capital gain.The GEDI Group revealed that its appeals against said assessments had been upheld at two pre-vious levels of jurisdiction and that the circumstances disputed had originally been declared asnon-existent at criminal level.The Parent Company took steps to file an appeal before the Supreme Court of Cassation on 27June 2012 and to present the Rome CTR, on 28 June 2012, with an application for the suspen-sion of the effects of the sentence. The appeal was upheld by means of court order filed on 19 July2012.For greater details on this aspect, reference should be made to the comments in the “Notes tothe condensed half-yearly consolidated financial statements of the GEDI Group”.With regard to financial risks, the Group secured available resources through the placement ofa convertible bond as well as the definition of two factoring agreements aimed at financiallyexploiting the trade receivables of the subsidiary A.Manzoni&C. In addition, also with respectto the receivables of A.Manzoni&C., a securitisation agreement is currently being finalised.

25



****

Based on results and the cash flow generated in past financial years and the financial positionat 30 June 2017, the Company does not believe that there exist uncertainties such as to raisesignificant doubts with regard to the ability of the Group to continue its activity as an ongoingconcern.

Other information

At 30 June 2017, own shares held by the Parent Company were 21,354,993 (nominal value €0.15),representing 4.198% of the share capital.

Process for legislative simplification adopted by means of Consob resolution No. 18079dated 20 January 2012The Company complied with the opt-out regime envisaged by Articles 70.8, and 71.1-bis of Con-sob Regulation No. 11971/99 (and subsequent amendments and additions), therefore availing itselfof the faculty to depart from the obligations to publish the disclosure documents envisaged by Enclo-sure 3B to the afore-mentioned Consob Regulation at the time of significant transactions involvingmerger, spin-off, share capital increases by means of conferral of assets in kind, take-overs and dispo-sals.

Transactions with subsidiaries and related party transactionsTransactions with related parties, including intragroup transactions, cannot be classified as aty-pical or unusual, as they are part of the Group companies’ normal business operations. Thesetransactions are settled on an arm’s-length basis, taking account of the characteristics of the goodsand services provided.Information on transactions with related parties, including that required by Consob Communi-cation of 28 July 2006, is set forth in Note 14.4 of the condensed half-yearly consolidated finan-cial statements.A list of companies included in the scope of consolidation is reported in Attachment 1 of the“Notes to the condensed half-yearly Consolidated Financial Statements of the GEDI Gruppo”.

26


Half-year condensed consolidated financial statements of the GEDI Group at 30 June 2017

Statement of Financial Position and Income Statement

55865_INT@27-32_Bilancio cons_EN_Layout 1 16/11/17 10:08 Pagina 27

Consolidated Statement of Financial Position

ASSETS Notes 31 Dec 30 June(€ thousand) 2016 2017Intangible assets with an indefinite useful life 466,424 591,037 Other intangible assets 3,709 5,381 Intangible assets (1) 470,133 596,418 Property, plant and equipment (2) 83,923 101,791 Investments valued at equity (3) 129,051 124,105 Other investments (4) 3,348 4,552 Other non-current receivables (5) 1,998 2,184 Deferred tax assets (6) 15,982 22,770 NON-CURRENT ASSETS 704,435 851,820 Inventories (7) 10,233 13,799 Trade receivables (8) 174,493 180,369 Marketable securities and other financial assets (9) 222 50 Tax receivables (10) 15,452 16,865 Other receivables (11) 23,352 33,402 Cash and cash equivalents (12) 148,537 170,021 CURRENT ASSETS 372,289 414,506 TOTAL ASSETS 1,076,724 1,266,326

LIABILITIES AND EQUITY Notes 31 Dec 30 June(€ thousand) 2016 2017Share capital (13) 61,806 76,304 Reserves (14) 174,738 237,392 Retained earnings (losses) (14) 350,973 367,423 Net profit (loss) for the period 10,356 7,367 Group Shareholders’ Equity 597,873 688,486 Minority interests (15) 487 545 SHAREHOLDERS’ EQUITY 598,360 689,031 Financial debt (16) 83,526 93,764 Provisions for risks and charges (17) 46,781 47,676 Employee termination indemnity and other retirement benefits (18) 47,836 60,589 Deferred tax liabilities (6) 89,140 121,156 NON-CURRENT LIABILITIES 267,283 323,185 Financial debt (16) 33,568 49,929 Provisions for risks and charges (17) 20,643 36,910 Trade payables (19) 96,001 99,569 Tax payables (20) 10,023 11,220 Other payables (21) 50,846 56,482 CURRENT LIABILITIES 211,081 254,110 TOTAL LIABILITIES 478,364 577,295 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1,076,724 1,266,326

The notes from page 35 to page 90 represent an integral part of these half-year condensed consolidated financial statements.




Consolidated Income Statement

Notes 1st half 1st half(€ thousand) 2016 2017Revenues (22) 292,895 287,297 Change in inventories (7) (113) (181) Other operating income (23) 4,997 6,001 Purchases (24) (28,495) (23,114) Costs for services (25) (129,903) (146,119) Other operating charges (26) (4,708) (4,812) Personnel costs (27) (109,521) (96,685) Depreciation, amortisation and write-downs (28) (7,467) (6,891) Operating profit 17,685 15,858 Financial income/(expense) (29) (4,512) (4,643) Valuation of investments at equity (3) 2,186 (664) Profit (loss) before taxes 15,359 10,551 Taxes (30) (4,155) (4,126) Net profit (loss) of assets destined to continue 11,204 6,425 Profit (loss) from discontinued operations and assets held for sale (34) 1,000 1,000 Net profit 12,204 7,425 Minority interests (31) (73) (58) GROUP PROFIT (LOSS) 12,131 7,367 Earnings per share, basic (32) 0.031 0.019 Earnings per share, diluted (32) 0.027 0.016

Consolidated Statement of Comprehensive Income

1st half 1st half(€ thousand) 2016 2017NET PROFIT 12,204 7,425 Other comprehensive income components: Profit/(loss) on restatement of available-for-sale financial assets - - Profit (loss) from costs related to the integration process - (749) Taxes on other comprehensive income components - 180 Tax effect of other profit (loss) - - Other comprehensive income components, net of tax effect - (569) TOTAL COMPREHENSIVE INCOME 12,204 6,856Total comprehensive income attributable to: Shareholders of the Parent Company 12,131 6,798 Minority interests 73 58



Consolidated Cash Flow Statement

Notes 1st half 1st half(€ thousand) 2016 2017OPERATING ACTIVITIESNet profit (loss) on assets destined to continue, own and minority interests 11,204 6,425 Adjustments: Depreciation, amortisation and write-downs (28) 7,467 6,891 - Actuarial assessment stock option plans (27) 662 323 - Net change in provisions for personnel costs (18) (1,915) (1,219) - Net change in provisions for risks and charges (17) (4,541) (1,174) - Losses (gains) on disposal of fixed assets 3 (15) - Losses (gains) on disposal of investments and securities (1,000) (1,000) - Adjustments for investments valued at equity 1,018 4,946 - Loss (profit) from discontinued operations 1,000 1,000 Self-financing 13,898 16,177 Changes in current assets and other flows 22,862 (8,957) CASH FLOW FROM OPERATING ACTIVITIES 36,760 7,220 of which: Interest received (paid) (1,369) (1,483) Income taxes received (paid) 2,773 2,328 INVESTING ACTIVITIES Outlay for purchase of fixed assets (5,774) (5,837) Outlay for purchase of investments (887) (30) Collections from sales 33 3,248 (Incr.) decrease financial receivables held for sale (1,232) 222 Cash flow generated by purchase of ITEDI - 8,965 Cash flow generated by sale of assets 1,000 1,000 CASH FLOW FROM INVESTING ACTIVITIES (6,860) 7,568 FINANCING ACTIVITIES Increases in capital and reserves - - (Purchase) sale of own shares (53) 222 Issue (repayment) of financial debt (1,492) 7,323 Other changes (674) (951) CASH FLOW FROM FINANCING ACTIVITIES (2,219) 6,594 Increase (Decrease) in cash and cash equivalents 27,681 21,382 Cash and cash equivalents at beginning of the period 110,509 148,498 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 138,190 169,880





Statement of Changes in

the Consolidated Shareholders’ Equity

Share

Sha

re Prem

ium O

wn Fair V

alue IFRS

Stock

Cap

ital R

etained Profit (loss) Ow

n Th

ird Party Total

(€ th

ousand

) Ca

pital Re

serve Sh

ares

Reserve Re

serve Option

Res. R

eserve

Earnings for Period Share Equ. Share E

qu. Share Equ.

Positio

n at 31 De

cembe

r 201

5 6

1,80

6 2

,845

(34,62

4) -

5

2,90

4 11,56

1 12

1,30

9 3

55,612

16

,974

588

,387

2

,036

5

90,423

Movem

ents in

net profit - - - - - - - 16,974 (16,974) - - -

Dividend

s - - - - - - - - -

- (170) (170

)

Capital increases, cap

ital contribu

ted by sha

reholders - - - - - - - - -

- - -

Valuation of stock options

- - - - - 66

2 - - -

6

62 - 66

2

Own share tra

nsactions - - (5

3) - - -

- (504) - (55

7) - (557

)

Tran

sfers between reserves

- - - - - - 2

1,032 (2

1,032) - - - -

Other c

hang

es - - - - - - - 20 -

20 (26) (6)

Chan

ges in statement o

f com

prehensive in

come:

Actuarial p

rofit (loss) on personnel p

rovisions - - - - - - - - -

- - -

Profit (lo

ss) o

n restatem

ent o

f finan

cial assets

available for s

ale - - - - - - - - -

- - -

Net p

rofit (loss) fo

r the period - - -

- - - - - 12,131 12,13

1 7

3 12

,204

Po

sitio

n at 30 June

201

6 61,80

6 2

,845

(34,67

7) -

5

2,90

4 12,22

3 14

2,34

1 3

51,070

12

,131

600

,643

1

,913

6

02,556

Sh

are

Sha

re Prem

ium O

wn Fair V

alue IFRS

Stock

Cap

ital R

etained Profit (loss) Ow

n Th

ird Party Total

(€ th

ousand

) Cap

ital Re

serve Sh

ares

Reserve Re

serve Option

Res. R

eserve

Earnings for Period Share Equ. Share E

qu. Share Equ.

Positio

n at 31 De

cembe

r 201

6 6

1,80

6 2

,845

(34,54

4) -

5

2,90

4 12,01

0 14

1,52

3 3

50,973

10

,356

597

,873

487

5

98,360

Movem

ents in

net profit - - - - - - - 10,356 (10,356) - - -

Dividend

s - - - - - - - - -

- - -

Capital increases, cap

ital contribu

ted by sha

reholders 14

,498

69

,154

-

- - - - - - 83

,652

- 83

,652

Valuation of stock options

- - - - - 32

3 - - -

3

23 - 32

3

Own share tra

nsactions - -

222

- - -

- (382) - (16

0) - (160

)

Tran

sfers between reserves

- - - - - - (7,04

5) 7,045 -

- - -

Other c

hang

es - - - - - - - - -

- - -

Chan

ges in statement o

f com

prehensive in

come: - - - - - - - - -

-

Actuarial p

rofit (loss) on personnel p

rovisions - - - - - - - - -

- - -

Profit (lo

ss) from costs re

lated to th

e integration process - - - - - - - (569) - (5

69) -

(569

) Ne

t profit (loss) fo

r the period - - -

- - - - - 7

,367 7,36

7 5

8 7,42

5 Po

sitio

n at 30 June

201

7 76,30

4 71

,999

(34,32

2) -

5

2,90

4 12,33

3 13

4,47

8 3

67,423

7

,367

688

,486

545

6

89,031



Notes to the half-year condensed consolidated financial statementsof the GEDI Group

55865_INT@33-90_nota consolidato_corretto_EN_ok_XXX 16/11/17 10:05 Pagina 33


Notes to the condensed consolidated half-year financial statements

1. General Information

Introduction

The Extraordinary Shareholders’ Meeting held on 27 April 2017 resolved a share capital increasereserved under subscription to Fiat Chrysler Automobiles N.V. (“FCA”) and to Ital Press HoldingSpA (“IPH”), which was released by the latter on 27 June 2017 with a contribution in kind of theshares, aggregately representing the entire share capital of Italiana Editrice SpA (“ITEDI”). As aresult of this transaction, control of ITEDI and the companies it controls was acquired on 27 June2017.

Deeming it appropriate to distinguish the extent of the integration transaction with ITEDI, thesame Extraordinary Shareholders’ Meeting also resolved to change the name of the Companyto “GEDI Gruppo Editoriale SpA”.

****

GEDI Gruppo Editoriale SpA (hereinafter “GEDI”, the “Company” or “Parent Company”)and those companies in which it holds either directly or indirectly an interest (hereinafterjointly referred to as the “GEDI Group” or the “Group”) operates mainly in the publishingsector and more specifically in the newspapers and periodicals segment, that of radio stations,advertising sales, online publishing.

GEDI Gruppo Editoriale SpA has its registered office in Italy at Via Cristoforo Colombo 90, Rome.

CIR Compagnie Industriali Riunite SpA controls the Company and exercises coordination andmanagement functions pursuant to Article 2497 of the Italian Civil Code.

GEDI Gruppo Editoriale stock is listed on the screen-based trading circuit (Mercato TelematicoAzionario (MTA) of Borsa Italiana SpA (Reuters code: GEDI.MI, Bloomberg code: GEDI IM).

The half-yearly financial statements at 30 June 2017 and their circulation were approved bythe Board of Directors on 26 July 2017.

2. Form and content of the financial statements and accounting standards

These condensed half-yearly consolidated financial statements, based on the principle of thecompany as an ongoing concern, were prepared in accordance with international accountingstandards (International Accounting Standards, – IAS and International Financial Reporting Stan-dards, – IFRS), as integrated by the related interpretations (Standing Interpretations Committee –SIC and International Financial Reporting Interpretations Committee, IFRIC) issued by the Inter-national Accounting Standards Board (IASB) and approved by the European Union.More specifically, it was prepared in a condensed format in accordance with the international



accounting standard applicable for interim reporting (IAS 34) adopted by the European Unionand pursuant to Art. 154-ter, paragraphs 2 and 3 of Italian Legislative Decree No. 58 of24/02/1998.The half-yearly financial statements at 30 June 2017 must therefore be read in conjunctionwith the Annual Financial Statements at 31 December 2016.The general principle adopted in the preparation of the financial statements is that of thehistorical cost for all assets and liabilities, with the exception of derivative instruments andcertain financial assets/liabilities, some of which could be accounted for at their fair value.In order to facilitate the understanding of developments during the year, the comparative figures inboth the financial statements and in the related notes refer to the position at 31 December 2016,whereas the economic, shareholders’ equity and the statement of cash flow data are compared withthe corresponding period in the previous year.The classification, form, order and nature of items in the financial statements, as well as theaccounting standards adopted are consistent with the financial statements approved at 31December 2016, with the exception of the item “Valuation of investments at equity” included inthe Income Statement that was reclassified among the financial postings. This provides arepresentation of the income results that is more consistent with the current outlook for the mainsubsidiaries and following the restructuring that recently involved certain business activities; thesame item was similarly reclassified in the comparative schedule. The classification adopted in the Statement of Financial Position, both for assets and liabilities, isthat of “current” and “non-current” as, contrary to the classification by liquidity, such criteria isdeemed to provide a better representation of the Group’s financial position. The Statement ofFinancial Position is divided into two separate facing sections. The order of reporting is assets, sha-reholders’ equity and liabilities (from the least current to the most current). In order not to makethe reporting unnecessarily complex and to use the same format for interim reports, financialstatements include only major captions and all sub-classifications (e.g. nature of the debtor/creditor,expiration term, etc.) are instead disclosed in the notes. The contents of the Statement of FinancialPosition are in compliance with minimum requirements established by IAS 1 as, with the exclusionof publications, radio frequencies and trademarks, classified under “Intangible assets with anindefinite useful life”, no significant or particular items were deemed to require separate reporting.Income Statement items were classified by nature as, considering the activities of the Group, it hasnot been deemed that a classification by destination could better represent the operatingperformance of the Company. In the of Cash Flow Statement, prepared according to the “indirectmethod”, cash flows arising from operating, investing and financing activities, and those arisingfrom discontinued operations are reported separately. The Consolidated Statement of Changes inEquity shows income and charges for the period and other changes in reserves.Unless otherwise specified, amounts reported in the financial statements and tables are statedin thousands of euro, rounded off to the nearest unit.

3. Principles of consolidation

The scope of consolidation includes the financial statements of the Parent Company, itssubsidiaries and affiliated companies. Subsidiaries are those companies in which the ParentCompany exercises decisional power over financial and operating policies. Control is deemedto occur when more than half of actual voting rights or those potentially exercisable at a sha-



reholders’ meeting are held by the company either directly or indirectly at the date of thefinancial statements. Affiliated companies are those in which the Parent Company exercises asignificant influence. Such influence is deemed to occur when the Group controls 20% or moreof actual voting rights or those potentially exercisable at the date of the financial statements.Subsidiaries are consolidated from the date on which the Group acquires control and deconso-lidated as from the date on which control is lost. Subsidiaries and affiliated companies are recorded at purchase cost. Purchase cost correspondsto the value of assets acquired, shares issued or liabilities generated at the time of acquisition,in addition to directly attributable costs. The excess of the purchase cost over the book valueof assets of subsidiaries acquired by the Group is recorded as goodwill, while that of affiliatedcompanies acquired is included in the value of the investment. The accounting treatment ofgoodwill is described in Note 4.1. Subsidiaries were consolidated under the line-by-line method, thus including all assets andliabilities, costs and revenues of subsidiaries, regardless of the share held. The book value of con-solidated companies was therefore netted against the related portion of the shareholders’ equity.Transactions, balances and unrealized gains and losses among Group companies were thereforeeliminated. The portions of shareholders’ equity and profits accruing to minority shareholderswere recorded separately under shareholders’ equity in the consolidated statement of financialposition and under a separate caption in the consolidated statement of comprehensive income.Subsequent to their acquisition, investments in affiliated companies are recorded under the equitymethod, recording the share of the Group in the profit and in the change in reserves, respectivelyin the income statement and in the statement of financial position under shareholders’ equity. Thepertinent portion of unrealized gains and losses on infragroup transactions was eliminated. Whenthe Group’s share in the loss of an affiliated company is equal or higher than the book value ofthe investment, the Group does not recognize further losses unless it is has obligations to coverlosses or has made payments on behalf of the affiliated company. The condensed half-yearly consolidated financial statements do not include non-operationalsubsidiaries or those in liquidation. Their impact on total assets and liabilities, on the financialposition and on the share in net profit attributable to the shareholders of the Parent Companyis not relevant.All financial statements of Group companies for consolidation purposes are prepared at the samedate, using the same accounting standards and relate to a financial year of the same duration.

3.1 IFRS 12 With reference to the disclosure purposes of IFRS 12, it is hereby indicated that the companiesdesignated as subsidiaries in the Attached Summary statement of Group companies, are entitiesin which GEDI Gruppo Editoriale exercises control, either by directly or indirectly holding thelarger quota of voting rights in the respective shareholders’ meetings, or due to its rights toreceive the variable benefits arising from its relations with the latter, impacting on said benefitsand exercising its power over the company, even aside from its equity relationships.With regard to the summary of the economic-financial data of the subsidiaries with minorityholdings, please see the matters presented in section 14.7.For the purpose of the disclosure relating to changes in the composition of the Group, reference ismade to the matters illustrated in the section on the Scope of consolidation. The companiesdesignated as associated in the Summary statement of Group companies, are companies in whichthe Group exercises significant influence, but not control or joint control, over the financial and



operating policies. For the purpose of the disclosure relating to the nature, extent and economic-financial effects of the Group holdings in associated companies and the summary of the economic-financial data of the associated companies, reference is made to the matters illustrated in section12.3 “Investments valued at equity”. There are no restrictions on the ability of the Group to assessor use the assets and to discharge liabilities nor provisions which limit the distribution of dividendsor other distributions of capital of both the subsidiaries and the associated companies.

4. Valuation criteria

4.1 Intangible assetsIntangible assets are initially recorded at acquisition or production cost. The acquisition cost isrepresented by the fair value of the price paid for the asset, inclusive of any direct cost incurred forpreparing the asset for use. The purchase cost is the equivalent price paid in cash at the time of theacquisition. In case the amount paid for the acquisition is deferred beyond normal payment terms,the difference with respect to the equivalent cash price is recorded as interest over the longerpayment term. The cost of intangible assets developed internally is recorded by separating costsincurred in the research phase (not capitalized) and costs incurred in the subsequent developmentphase (capitalized). In case the two phases cannot be separated, the whole project is accounted foras research. The book value of intangible assets is in line with the amount expected to be retrieved throughfuture use or disposal. At least once a year and in case there arise doubts as to the possibilityto retrieve the book value of an asset, the latter is subjected to an impairment test, as describedin Note 4.7.

Publications, trademarks and frequenciesThe useful life of newspaper publications and trademarks allocated to their respective CGU, isconsidered as undefined. Radio frequencies are also considered as assets having an indefiniteuseful life as they are used based on concessions for broadcasting whose duration is unlimited.Such assets are not amortized and are instead subjected annually, and any time there is an indi-cation that the asset may have experienced a loss in value, to an impairment test. Anyimpairment loss is recorded in the income statement under “Depreciation, amortisation andwrite-downs”.

GoodwillGoodwill represents the premium paid over the fair value of the share of assets and liabilities,including potential ones, at the time of acquisition. Goodwill arising from the acquisition ofaffiliated companies is included in the value of the related investments. Goodwill purchased for a cost is not subject to amortisation but to an impairment test at leastonce a year. Accordingly, goodwill is allocated from the date of acquisition to one or more cashgenerating units (CGU). Reductions in value resulting from an impairment test do not give riseto adjustments in subsequent years and are recorded in the income statement under“Depreciation, amortisation and write-downs” and are not reinstated in subsequent years.



Other intangible assetsOther intangible assets are represented by industrial patents and intellectual property rights,concessions, licenses, trademarks and similar rights, software and digital television frequencies.They are recorded at cost, net of accumulated amortisation calculated on a straight line overtheir expected useful life, and possible losses in value.In detail, the acquisition of long-term rights for television productions, recognized under intel-lectual property rights, are amortized on an annual straight-line basis over the period of theircontractual availability, as from the period they are available and ready for use. If the rightshave exhausted their usefulness, irrespective of the amortisation already charged, the residualvalue is fully expended in the period the last use took place. The costs referring to televisionproductions destined to be used immediately are booked to the income statement in full in theperiod of use.In view of the homogeneity of other assets recorded in the statement of financial position, withthe exception of long-term rights, the useful life of other intangible assets is estimated at 3 to6 years. Amortisation criteria, the useful life of assets and their residual value are reviewed andredefined at least at the end of each financial period to take into account possible significantchanges.

4.2 Property, plant and equipmentProperty, plant and equipment at the beginning are recognized at purchase price or atproduction cost. Cost includes associated expenses and any direct and indirect costs incurredto make the asset ready for use. The capitalization of costs for the upgrade, update orimprovement of structural elements owned or leased from third parties is carried outexclusively when the same fulfil the requisites that allow their separate classification as assetsor part of assets. Ordinary maintenance costs are charged to the income statement.After the initial recording, property, plant and equipment are carried at cost, net ofaccumulated depreciation (with the exception of land) and any losses in value. The depreciablevalue of each significant component of a tangible asset having a different useful life iscalculated on a straight line over its expected useful life. Amortisation criteria, the useful life of assets and their residual value are reviewed andredefined at least at the end of each financial period to take into account possible significantchanges. Capitalized costs relating to leasehold improvements are depreciated over the shorter betweenthe residual term of the lease and the residual useful life of the asset to which the leaseholdimprovement relates.The book value of property, plant and equipment is in line with the amount expected to beretrieved through future use. In case doubts arise as to the possibility of recovering the net bookvalue of an asset, the latter is subjected to an impairment test, as described in Note 4.7. Theoriginal value is reinstated when the reasons that gave rise to the impairment cease to exist.

4.3 Business combinations, Discontinued operations and non-current assets held for saleThe acquisition of subsidiary companies is recognized according to the acquisition method. The cost of the acquisition is calculated by the sum of the current values, as of the exchangedate, of the assets acquired, the liabilities incurred or undertaken, and the financial instrumentsissued by the Group in exchange for control over the company acquired.



The ancillary charges associated with the acquisition are recorded in the Income Statement, owhere the acquisition was carried out with the issue of capital instruments, in Shareholders’Equity, on the date the services were rendered.

4.4 Leasing Leasing contracts relating to assets for which the Group essentially bears all costs and benefitsderiving from use are classified as financial leases. Assets held under a financial lease arerecorded at the lower between the current value of the asset leased and the present value of theminimum lease payments provided for in the lease contract. The total for these payments isaccounted for as interest and principal so as to obtain a fixed rate of interest on the residualpart of the debt. Residual lease payments, net of financial costs, are recorded as financial debt.Borrowing costs are charged to the income statement over the life of the lease. Assets heldunder a financial lease are depreciated in line with the nature of the good. Leasing contracts in which the lessor holds a significant share of the risks and benefits derivingfrom ownership are classified as operating leases. Lease payments are recorded in the incomestatement in equal instalments over the life of the lease contract.In sale and lease-back operations, the difference between the sale price and the book value ofthe asset is not recorded, except in the case of a write-down in the value of the asset.

4.5 GrantsGrants are recorded when there exists, regardless of the formal granting of the amount,reasonable certainty that the company will meet the conditions for the entitlement to the grantand that the same will actually be received.Capital grants are recorded in the statement of financial position as deferred revenue. The grantis credited to the income statement based on the useful life of the asset for which it is grantedby discounting it so as to net out the related amortisation recorded.Grants receivable as compensation for expenses and costs already incurred or aimed atproviding immediate financial help to the company not correlated to future costs are recordedas income in the year in which they become receivable.

4.6 Financial expenseFinancial expenses incurred for an investment in assets which normally require a certain periodof time to be prepared for use or for sale, are capitalized and amortized over the life of theassets to which they relate. All other financial charges are recorded in the income statement inthe year in which they are incurred.

4.7 Loss in value of assetsA loss in value of an asset originates whenever the book value of an asset is higher than theamount expected to be retrieved from the same. At each accounting date, the presence offactors indicating a possible loss in value is assessed. Whenever one of these factors ispresent, the retrievable value of the asset is assessed through an impairment test and the wri-te-down is recorded where appropriate. Assets not yet available for use, those recorded in thefinancial statements in the current financial year, intangible assets with an indefinite usefullife and goodwill are subject at least annually to an impairment test, independently from thepresence of factors indicating possible loss in value.



The retrievable value of an asset is the higher between its fair market value, net of costs to sell,and its value in use. The retrievable value is calculated with reference to each individual asset,unless said asset is able to generate positive cash flows deriving from ongoing use independentlyfrom positive cash flows generated by other assets or groups of assets, in which case the test iscarried out at the level of the smallest Cash Generating Unit that includes said asset. Theoriginal value of the asset is restored whenever the reasons for the write-down cease to exist,with the exception of goodwill whose original value is not restored.

4.8 Investments valued at equityInvestments in affiliated companies or those in which the Parent Company exercises asignificant influence, are recorded at equity.For a more detailed analysis of accounting standards regarding financial assets, see Note 4.14.

4.9 Other investmentsAffiliated companies are entities where the Group exercises significant influence over thefinancial and management policies, albeit without having control.Affiliated companies are recognised at equity and initially recorded at cost, including thetransaction costs. Most of the procedures adopted for applying the equity method aresimilar to the consolidation procedures described above, including the concepts underlyingthe acquisition method; with reference to the latter, it should be noted that similarly in thecase of acquisitions of affiliated companies, the acquisition method at the date whensignificant influence is obtained is applied, and consequently, the fair value of the feetransferred and net assets acquired is recognised, implicit in the value of the investment’sfirst recording. The consolidated financial statements include the portion of the Group’s profits or losses forsubsidiaries recorded according to the aforementioned equity method, up until the date onwhich the significant influence ceases. For a more detailed analysis of accounting standards regarding financial assets, see Note 4.14.

4.10 Assets held for saleNon-current assets (or groups subject to disposal) where the book value will mainly berecovered by means of sales transactions rather than their on-going use, are classified as heldfor sale, and recognised separately from other assets and liabilities in the statement of financialposition. Based on this, the asset (or groups subject to disposal) must be available forimmediate sale in its current status, subject to conditions that are customary and commonpractice for the sale of said asset (or groups subject to disposal), and the sale must be highlyprobable within one year. If these criteria are met subsequent to the close of the period, thenon-current asset (or group subject to disposal) is not classified as held for sale. Nonetheless,if these conditions are met subsequent to the close of the period, but before the financialstatements are approved for publication, information in this regard is provided in the notes tothe financial statements.Non-current assets (or groups subject to disposal) classified as held for sale are recognised attheir net book value or the fair value net of sales costs, whichever is the lower; thecorresponding amounts from the previous period are not reclassified.



Discontinued operations represent a portion of the company that has been disposed of orclassified as held for sale, and:• represent a significant business segment or geographic business area;• are part of a coordinated disposal plan for a significant business segment or geographicbusiness area; or

• is a subsidiary acquired for the sole purpose of being resold.Profit (loss) from discontinued operations - whether disposed of or classified as held for saleand being disposed of - are recognised separately in the Income Statement, net of tax. The cor-responding figures for the previous period (if applicable), are reclassified and recognisedseparately in the Income Statement, net of tax, for comparative purposes.

4.11 InventoriesInventories are recorded at the lower of the acquisition or production cost, determinedapplying the weighted average cost method, and the presumed net realizable value. The cost isrepresented by the fair value of the price paid and any other cost that may be attributed, withthe exception of interest expenses. The net realizable value is represented by the estimated saleprice under normal conditions, net of completion costs and costs to sell. Write-downs arereversed in subsequent years when the reasons for their recording cease to exist.

4.12 Trade receivablesTrade receivables are recorded at the fair value of future cash flows, written-down for losses invalue. The Group transfers a portion of its trade receivables by means of recourse factoringtransactions. The factored receivables do not meet the requirements for elimination as defined byIAS 39 and therefore remain in the Group’s financial statements, even if they have legally been tran-sferred; a financial liability for the same amount is recognized in the consolidated financialstatements as Current Financial Debt. The gains and losses relating to the transfer of these assetsare only recognized when the assets themselves are removed from the Group’s statement of financialposition.

4.13 Cash and cash equivalentsCash and cash equivalents are represented by short-term investments in highly liquid assets thatmay easily be converted into known amounts of cash posing a minimal risk of fluctuation in value,and by transactions carried out in the context of centralised treasury management. For the purposes of the cash flow statement, cash and cash equivalents consist of cash, demanddeposits with banks, other highly liquid short-term financial assets with an original maturitygenerally not exceeding 3 months, and bank overdrafts. For the purposes of the statement offinancial position, the latter are included among financial debt under current liabilities.

4.14 Financial assetsFinancial assets are classified into the following categories:• financial assets valued at fair value, recorded also in the income statement; • financial assets held to maturity; • loans and other financial receivables;• financial assets available-for-sale.The Group carries out the classification of financial assets at the time of acquisition. Financial assets are classified as follows:



• financial assets valued at fair value, recorded also in the income statement, consisting offinancial assets acquired primarily with the intent of realizing a gain from short-termtrading (over a term no longer than 3 months), or financial assets designated as suchfrom inception;

• financial assets held to maturity, consisting of financial assets having a set maturity and gene-rating a fixed cash flow or one that may be determined, which the Group intends and hasthe ability to hold to maturity;

• loans and other financial receivables, consisting of financial assets generating a fixed cashflow or one that may be determined, not listed on a market and different from thoseclassified from inception as financial assets valued at fair value, recorded also in the incomestatement as available-for-sale financial assets;

• available-for-sale financial assets, consisting of financial assets other than the above or thosedesignated as such from inception.

Acquisitions and sales of financial assets are recorded at the settlement date. The acquisitioncost corresponds to the fair value at the acquisition date, inclusive of transaction costs. After the initial recording, financial assets valued at fair value, recorded also in the incomestatement and available-for-sale financial assets are valued at fair value, while financialassets held to maturity and loans and other financial receivables are valued at the amortizedcost. Realized and unrealized gains and losses resulting from fluctuations in the fair value offinancial assets valued at fair value, recorded also in the income statement are recorded in theincome statement in the year in which they occur. Unrealized gains and losses resulting from fluctuations in the fair value of available-for-salefinancial assets are recorded under Shareholders’ Equity, while realized gains and losses arerecorded in the income statement in the year in which they are generated, together with thosepreviously recorded under Shareholders’ Equity.The fair value of financial assets is determined according to listed bid prices or through the useof financial models. The fair value of unlisted financial assets is estimated using specificestimation techniques adjusted to the specific condition of the issuer. Financial assets for whichthe current value cannot be reliably determined are recorded at cost, adjusted downwards forlosses in value. At each financial closing date, the presence of factors indicating loss of value is assessed, andthe related write-down in value is recorded as appropriate in the income statement. Losses invalue accounted for are reversed in case the circumstances that led to their recording no longerexist, with the exception of assets valued at cost.

4.15 Share capitalThe share capital is represented by capital underwritten and paid-up. Costs strictly correlated with the issue of shares are recorded as a reduction of the share capital,provided they are directly attributable to operations involving the same.

4.16 Own sharesOwn shares are recorded in a specific Shareholders’ Equity reserve. Gains or losses on the purchase,sale, issue or cancellation of own shares are not recorded in the income statement.



4.17 Fair value reservesFair value reserves include changes in the fair value, net of the related tax effect, of itemsrecorded at fair value with compensation in the Shareholders’ Equity.

4.18 Other reservesOther reserves are represented by specific capital reserves.

4.19 Retained earnings (losses)“Retained earnings (losses)” includes the part not distributed and not accrued to themandatory reserve (in case of profits) or not balanced (in case of losses), of profits and lossesaccrued. The item also includes transfers from other equity reserves freed-up, in addition to theeffect of the change in accounting standards and relevant errors.

4.20 Employee benefitsShort-term benefitsShort-term employee benefits are recorded in the income statement over the period in whichthe employment takes place.

Post-retirement benefitsAs from 01 January 2007, Italian Law No. 296/2006 (2007 Budget Law) and related imple-mentation regulations introduced substantial changes in norms regarding EmployeeTermination Indemnities (TFR), including the choice left to workers as to the destination ofindividual indemnities accruing from such date. In particular, new norms provide for the pay-ment by the company of indemnities accrued to the pension fund of choice or, in case theworker has opted to maintain accrued benefits with the company and the company has lessthan 50 employees, into a treasury account set-up with INPS – the national Social SecurityFund. These regulatory changes resulted in a new accounting treatment of Employee Termi-nation Indemnities.Before the reform introduced with Italian Law No. 296/2006, under international accountingprinciples Employee Termination Indemnities were considered as a “defined benefit plan”, whilenow only indemnities accrued up to 31 December 2006 by companies with more than 50employees continue to qualify as such, and indemnities accrued after such date are treated as a“defined contribution plan”. All obligations of the company are thus now fulfilled with theperiodic payment of a contribution to other entities. The amount recorded in the IncomeStatement is therefore no longer that of discounted back indemnities, but the amounts actuallypaid to the pension fund of choice of the employee or the INPS treasury account, calculatedpursuant to Article 2120 of the Italian Civil Code.

Defined benefit plansEmployee termination indemnities (limited to the share accrued up to 31 December 2006 bycompanies with more than 50 employees) and Fixed indemnity for managers of newspapers aredetermined by independent actuaries to estimate the amount of the future benefits that theemployees have accrued at the statement of financial position date. All the possible actuarialeffects are recorded under Shareholders’ Equity and included in the statement of comprehensiveincome.



Defined contribution plansThe Group participates in defined contribution plans contributing to mandatory, contractual orvoluntary public or private pension plans. As already mentioned, Employee Termination Indemnitiesaccrued by companies with more than 50 employees, calculated pursuant to Article 2120 of the ItalianCivil Code, are paid out to the various pension plans or to the separate treasury service offered byINPS, as determined by individual employees. The payment of contributions extinguishes theobligation of the Group towards its employees. Contributions constitute therefore costs for the periodin which they are due.

Benefits based on financial instrumentsThe Group recognizes additional benefits to certain top managers through plans based onfinancial instruments.Plans adopted by the Group over time provide for the awarding of rights to participate in theshare capital of the Parent Company (Stock Options – Stock Grants).

Stock Options – Stock Grants (bonus assignment of shares)The cost of these operations involving shares, recorded in the income statement among personnelcosts, is calculated based on the fair value of such instruments at the time at which they are assigned.The cost is recorded in the period included between the date on which the options are assigned andthat at which they become exercisable, and is also recorded under Shareholders’ Equity. The fairvalue of the options thus determined is not updated or reviewed at the end of each accountingperiod.When options or rights are exercised before or at expiration, the respective value recordedunder Shareholders’ Equity is reclassified under the “Share premium reserve”. Wheneveroptions expire unexercised, on the contrary, the related amount is reclassified under “Retainedearnings (losses)”.In the transition to IFRS, the Group took advantage of a specific waiver and has not appliedthe above standards to stock option plans assigned before 7 November 2002.

4.21 Provisions for risks and charges, potential assets and liabilitiesProvisions for risks and charges are accrued against possible liabilities whose amount and/ortiming is uncertain and whose fulfilment requires the use of financial resources. Provisions aremade exclusively when an actual obligation, either legal or implicit exists towards third partiesthat requires the use of financial resources, and whenever a reliable estimate of the obligationcan be made. The provision recorded represents the best estimate of the liability relating to thefulfilment of the obligation at the date of the financial statements. Provisions made arereviewed at each accounting date and adjusted to the best available estimate. Where the payment of the obligation takes place beyond normal payment terms and thediscounting effect is relevant, the amount accrued is represented by the present value ofexpected future payments needed to extinguish the obligation.Potential gains and losses are not recorded in the financial statements, though adequate infor-mation about the same is provided.

4.22 Financial liabilitiesFinancial liabilities are recorded initially at the fair value, net of transaction costs incurred, andsubsequently carried at amortized cost using the effective interest rate approach.



Convertible bonds are recognized as compound financial instruments, made up of two compo-nents, which are dealt with separately only if significant: a liability and a conversion option.The liability corresponds to the current value of the future cash flows, based on the currentinterest rates as of the date of issue for an equivalent non-convertible bond. The value of theoption is defined as the difference between the net amount received and the amount of theliability and is recorded under shareholders’ equity. The value of the conversion option is notchanged in subsequent periods.

4.23 Derivative instrumentsDerivative contracts are recorded in the statement of financial position at fair value. The recording of differences in the fair value varies according to the purpose of the derivativeinstrument (speculative or hedging) and the nature of the risk hedged (Fair Value Hedge orCash Flow Hedge).In the case of contracts designated as speculative, changes in the fair value are recorded directlyin the income statement. In the case of contracts designated as hedging contracts, the Group documents the relationshipwith the instrument hedged at the time it enters into the contract. The documentation includes the identification of the hedging contract, the item or operationhedged, the nature of the risk hedged, the criteria with which the effectiveness of thehedging contract will be evaluated, and the related risk. The effectiveness of the hedge isevaluated by comparing fluctuations in the fair value or the cash flow of the instrumenthedged with fluctuations in the fair value or the cash flow of the hedging instrument. Theeffectiveness of the hedge is evaluated both at the start of the operation and regularly throu-ghout the duration of the hedge. The evaluation is in any case carried out at least at eachaccounting date. More specifically, the hedge is considered as efficient when the fluctuationin the fair value or the cash flow of the instrument is “almost entirely” offset by thefluctuation in the fair value or cash flow of the hedging instrument and results are includedin an interval between 80% and 125%.Fair Value Hedge instruments are accounted for by recording in the income statement changesin the fair value of the hedging instrument and the instrument covered, regardless of thevaluation criteria adopted for the latter. Adjustments to the book value of hedged financialinstruments generating interest are amortized in the income statement over the residual term ofthe asset/liability hedged using the effective interest rate method. Cash Flow Hedge instruments are accounted for by suspending under Shareholders’ Equity theportion of the change in the fair value of the hedging instrument which is recognized aseffective, while recording the ineffective part in the income statement. Changes recorded directly under Shareholders’ Equity are released to the income statementin the same year or in the years in which the asset or liability hedged influences the incomestatement.The effects on the financial statements of the termination of a hedge contract are recordeddifferently for Fair Value Hedges and Cash Flow Hedges. With regard to Fair Value Hedges, theunderlying instrument recorded in the financial statements ceases to be hedged from the date atwhich the hedging contract is terminated or the instrument is thus again valued according to themethod used in absence of a hedge; in detail, in case of financial instruments valued at amortizedcost, the difference between the valuation at the fair value of the risk hedged and the amortizedcost at the date of termination of the hedge accounting period is amortized over the residual life



of the financial instruments, based on rules used in the calculation of the effective rate of interest.In the case of Cash Flow Hedges, the gain or loss suspended in the shareholders’ equity remainsuspended until the transaction takes place, when it is no longer probable or it is no longerexpected to be carried out, or when flows originally hedged have an impact on the income state-ment.

4.24 Cost and revenue recognitionRevenues from the disposal of assets are valued at the fair value of the amount received orreceivable, taking into account trade discounts, where appropriate. Revenues from the provision of services are accounted for under the percentage of completionmethod, defined as the ratio between the amount of services provided at the accounting dateand the total value of services to be provided. Revenues are recorded in accordance with the following criteria:• revenues from the sale of publications are recorded at the time of shipping, net of relatedreturns;

• revenues from the sale of advertising are recorded at the time of publication. Costs are recorded according to criteria in line with those applied for revenues, and in any caseunder the accrual method.Interest received and paid is recorded based on the accrual method, taking into account theeffective rate of interest applicable to maturity. Dividends are recorded in the period in which distribution is resolved.

4.25 TaxesIncome taxes are calculated based on expected taxable income and current tax regulations. Deferred and prepaid taxes arising from timing differences between the profit reported in thefinancial statements and that reported for tax purposes, and the carry-forward of losses andtax credits not retrieved, are also recorded, provided their retrieval (elimination) reduces(increases) future tax payments with respect to the amount that would be payable in the futurein case such retrieval (elimination) did not have a tax effect. The tax effect of operations orother events are recorded in the income statement or directly under shareholders’ equity in thesame manner as operations or events that originate a tax liability and on the basis of tax ratesapplicable at the statement of financial position date. In case of changes in said tax rates, thebook value of deferred tax assets and liabilities is adjusted and entries are made in the incomestatement or under Shareholders’ Equity as appropriate. Since the 2004 financial year, GEDI Gruppo Editoriale SpA and the majority of its subsidiariesparticipate in the Parent Company’s CIR “tax consolidation” procedure pursuant to Art.117/129 of the Consolidated Tax Law (T.U.I.R.). In June 2016, participation in theconsolidated tax regimen was extended for the three-year period 2016-2018. Each companysubscribing to the national tax consolidation transfers its tax income or losses to theconsolidating company; the consolidating company records a receivable in respect ofcompanies that contribute taxable amounts equalling the IRES payable (payable for the conso-lidated company). On the other hand, for companies that contribute tax losses, theconsolidating company records a payable equalling IRES on the portion of the loss effectivelyoffset at Group level (receivable for the consolidated company). The portion of consolidatedcompanies’ tax losses exceeding the possible offset in the period at the tax consolidation levelis recorded by the consolidated company as a receivable for prepaid taxes, taking into account



the probability of these being realized in the future in the scope of the tax consolidation. Com-panies subscribing to the tax consolidation with net non-deductible financial expenses canbenefit from tax surpluses available in other participating companies (thus making theseexpenses deductible), by recognizing an offset for the tax surpluses referring to the nationalparticipating companies. This offset, based on the relevant tax saving, is paid to the ParentCompany CIR, representing a cost for the companies receiving the tax surplus, and income forthe transferor companies.

4.26 Foreign currenciesFinancial statement items are recorded in the currency of the primary economic environmentin which the company operates (“functional currency”). The condensed half-yearly consolidatedfinancial statements are prepared in euro, which is the functional currency of the ParentCompany. Transactions denominated in other currencies are translated into the reporting currency at theexchange rate at the date of the transaction. Foreign-exchange gains and losses arising from thesettlement of these transactions and the translation of assets and liabilities denominated in cur-rencies other than the functional currency are recorded in the income statement.

4.27 Changes in accounting estimatesA change in the accounting estimate must be recognized by adjusting the book value of theasset, liability, shareholders’ equity items in the period in which the change took place to theextent that a change gives rise to changes in value of the assets and liabilities concerned, orrefers to a shareholders’ equity item. The forecast recognition of the effect of a change in the accounting estimate means that thechange is applied to the transactions, other events and circumstances which have taken placeas from the date of the estimate change. A change in the accounting estimate may influence justthe economic result for the current year, or the economic result for the current year and forfuture years. A change in the estimated useful life or the methods envisaged for the use of theeconomic benefits referring to an asset which can be amortized/depreciated influences theamortisation/depreciation charge for the current year and each future year of the residualuseful life of said asset. The effect of the change relating to the current year is recognized asincome or expense in the same year. The impact, if it exists, on future years is recognized asincome and expense in future years.

5. Segment information

The determination of segments of activity of the Group and the presentation of the relatedinformation was carried out on the basis of periodical internal reports used by Groupmanagement to allocate resources and analyse results.The structure of the internal management reports is based on goods and services rendered.The Group evaluates the performance of its segments of activity based on Operatingprofit/(loss). Revenues of the segments presented are those directly achieved or attributable tothe segment and deriving from its core business. These include both revenues deriving fromtransactions with third parties and those deriving from transactions with other segments, thelatter being carried out at remunerative terms, in line with market conditions.




Specifically, in the publishing segments (national newspapers, periodicals, add-on products andlocal newspapers) sales mainly include revenues from the sale of publications and/or productssold optionally with publications (at newsstands, through subscription and through other lessimportant channels) and advertising revenues; in the radio segment, sales are represented byads on the three Group radio stations as well as the sale of programs and services to thirdparties; in the digital segment, advertising revenues from all Group internet sites as well asrevenues from the sale of subscriptions and services on various digital platforms (web, tabletsand mobile phones) are recorded; the advertising sales segment accounts for the revenuesrealized by the concessionaire A. Manzoni & C. through both Group means and vis-à-vis thirdparty publishers; lastly, other activities essentially include inter-segment revenues from otherprinting and distribution activities as well as services carried out by the Parent Company forother segments.Information regarding taxes and financial management is set forth without distinction in theconsolidated results column, in line with the structure of internal reporting and, also becausespecific allocation would not be significant. For assets or liabilities that cannot be attributed toan individual segment, specific parameters were applied in their attribution. Assets andliabilities of the “National newspapers-Periodicals” and “Radio-Internet” segments, aregrouped together because the specifics of the segments, with particular reference to themarketing of editorial products, do not allow for an objective assessment of individual values.Assets and liabilities that may not be attributed using specific parameters are reportedseparately in the table below. Accounting standards under which segment information is reported in the notes are consistentwith those adopted in the preparation of the consolidated financial statements.



Segment information

Cancellations

1ST HALF 2017 National Local Other and

(€ million) newspapers Periodicals newspapers Radio Digital Advertising activities Adjustments TOTAL

Circulation revenues 47.0 9.0 33.7 - 4.2 - - (0.2) 93.8 Advertising revenues 41.6 1.7 19.3 28.8 19.7 163.9 (90.4) 184.6 Other revenues 0.6 0.3 1.8 0.8 2.2 0.6 20.2 (17.4) 9.0 Total revenue 89.1 10.9 54.9 29.6 26.1 164.5 20.2 (108.0) 287.3 Revenue from other segments (41.2) (1.7) (19.5) (28.4) - (0.1) (17.1) 108.0 - Net revenue 47.9 9.3 35.4 1.2 26.1 164.4 3.0 - 287.3 Operating profit (1.4) (0.2) 7.2 7.9 1.4 0.5 0.4 0.0 15.9 Financial income (expense) (4.6)Taxes and minority interests (3.2)Group net profit 8.0

Cancellations

1ST HALF 2016 National Local Other and

(€ million) newspapers Periodicalsnewspapers Radio Digital Advertising activities Adjustments TOTAL

Circulation revenues 56.5 8.5 47.3 - 4.1 - - (0.2) 116.2 Advertising revenues 46.9 1.5 27.2 28.2 20.0 149.8 0.1 (103.2) 170.7 Other revenues 0.6 0.5 1.0 1.2 2.5 0.9 8.1 (8.9) 6.0 Total revenue 104.0 10.5 75.5 29.4 26.6 150.8 8.2 (112.2) 292.9Revenue from other segments (46.9) (1.5) (27.5) (27.7) - (0.5) (8.1) 112.2 - Net revenue 57.1 9.0 48.0 1.7 26.6 150.3 0.1 - 292.9 Operating profit 2.0 (2.9) 9.1 6.5 3.9 (0.7) (0.2) 0.0 17.7 Financial income (expense) (2.3)Taxes and minority interests (3.2)Group net profit 12.1

1ST HALF 2017 National Cancellations

newspapers and ITEDI Local Radio and Other and

(€ million) Periodicals Group newspapers Internet Advertising activities Adjustments TOTAL

Net capital expenditure 1.5 79.1 0.1 0.9 0.1 0.8 - 82.4 Assets 925.3 187.3 249.5 136.6 168.0 93.5 (533.5) 1,226.7 Tax assets 39.6 Total Assets 1,266.3

FINANCIAL Newspapers Cancellations

STATEMENTS 2016 and Local Radio and Other and

(€ million) Periodicals newspapers Internet Advertising activitiesAdjustments TOTAL

Net capital expenditure 6.8 (2.6) 1.8 0.0 1.1 0.1 7.3

Assets 820.3 255.3 131.1 162.0 101.1 (424.5) 1,045.3

Tax assets 31.4

Total Assets 1,076.7


6. Changes in accounting principles, errors and adjustments to estimates

Accounting standards adopted are modified from one financial year to the next only in case thechange is required by an accounting standard or it contributes to provide more reliable and relevantinformation on the effect of transactions carried out on the financial position, economicperformance or cash flows of the entity involved.The effect of changes in accounting principles is recorded retrospectively under shareholders’ equityfor the first accounting year in which the change is introduced, and comparative information isadapted accordingly. This approach is adopted only when it is impractical to restate the accountsfor comparative purposes. The application of a new or modified accounting principle is accountedfor as required by the same principle. In case the principle does not provide for the transition, thechange is accounted for under the retrospective method or, when this is impractical, through the useof projections.In case of relevant errors, the method described in the paragraph above with reference to accountingstandards applies. In case of immaterial errors, the recording is carried out in the income statementin the period in which it is detected.Changes in estimates that have an impact exclusively on the income statement are accounted forthrough the use of projections in the same year in which the review takes place in case changes affectonly such year, or in the year in which the review takes place and in subsequent years in case thechange has an impact also in subsequent accounting periods.

7. Subsequent events to the Half-yearly Report’s reference date

Events occurring after the reference date of the half-yearly financial report are events occurringbetween such date and the date on which the publication of the same is authorised. The date ofapproval for the publication of the half-yearly financial statements is the date when the Board ofDirectors approves them. This date is indicated in Note 1.Subsequent events relate to facts that provide evidence of situations existing at the date of thefinancial statements (subsequent events that imply adjustments) or facts providing evidence ofsituations after the statement of financial position date (subsequent events that do not require adju-stments). The effect related to the first is recorded in the financial statements and the appropriatenote is adjusted accordingly, while in the second case only suitable information is provided in theNotes, where relevant.With regard to these condensed half-yearly financial statements, there were no significant eventssubsequent to the close of the period.

8. New IFRS and IFRIC interpretations

The Group is assessing the possible effects arising from the application of the following principles:

- IFRS 15 standardThe new IFRS 15 standard (Revenue from Contracts with Customers), published on 28May 2014 and supplemented by additional comments published on 12 April 2016, isdestined to replace IAS 18 (Revenue) and IAS 11 (Construction Contracts), as well as the



IFRIC interpretations 13 (Customer Loyalty Programmes), IFRIC 15 (Agreements for theConstruction of Real Estate), IFRIC 18 (Transfers of Assets from Customers) and SIC 31(Revenues-Barter Transactions Involving Advertising Services). The standard provides a new model for recognising revenue, which will apply to allcontracts entered into with customers, with the exception of those falling within the scopeof application of other IAS/IFRS standards. The steps envisaged for the recognition ofrevenue according to the new standard are as follows:• identification of the contract with the customer;• identification of the performance obligations stipulated in the contract;• determining the price;• allocation of the price to the performance obligations in the contract;• revenue is recognised when the entity satisfies each performance obligation.The standard is applicable as from 01 January 2018, but early application is permitted.The amendments to IFRS 15, Clarifications to IFRS 15 – Revenue from Contracts withCustomers, published by the IASB on 12 April 2016, have not yet been approved by theEuropean Union.

With regard to the effects from the application of the new standard, the Group is currentlyundertaking a detailed analysis of active contracts, aimed at identifying the areas foradjustment, both in terms of the accounting and process impact for the different operatingsectors that the Group’s business is organised into. Within the scope of current analyses, ananalysis will also be done of the potential impact on the financial statements, and on possibleadjustments that may be required in the internal audit system relating to financial data. Theanalyses conducted up to now do not allow for a reasonable estimate to be made of the effectsfrom the application of IFRS 15, which will only be available once the study is completed,which is expected during the second half of 2017.

- IFRS 16 standardThe new IFRS 16 standard– Leases, (published on 13 January 2016), destined to replaceIAS 17 –Leases, provides a new definition of leases and introduces a criterion based on thecontrol (right of use) of an asset to distinguish leasing contracts from services contracts,identifying the following as being determining: the identification of the asset, the right toreplace the latter, the right to obtain all the economic benefits referring to the use of theasset, and the right to supervise the use of the asset underlying the contract. The standardsets a single model for the recognition and measurement of leasing contracts for the lessee,which requires the recording of the asset under the lease under assets with a contra-entryunder financial liabilities. It also makes provision for contracts referring to “low-valueassets” and leasing with a contract terms equal to or less than 12 months not to berecognised as leasing. The standard does not however envisage any significant changes forthe lessor. The standard will be applicable as from 01 January 2019, but early applicationis permitted only in the case of companies that had already applied IFRS 15 - Revenue fromContracts with Customers. With regard to the effects from the adoption of the new standard, the Group hasundertaken a study of contracts and gathered information relating to leases that are oper-ational pursuant to the current IAS 17- Leases. The impact will be estimated once theGroup has completed this study. The approach that needs to be adopted during thetransition stage will also be decided once the study is completed.



- IFRS 9 standardThe new IFRS 9 standard requires that the estimate of losses on receivables is carried outon the basis of the expected losses model (and not on the incurred losses model utilised byIAS 39), using information that includes historic, current and forecast data.The Group does not expect to significantly change the classification and measurement offinancial assets, due to the nature of its business; all the same, a detailed study is currently beingmade on the measurement of trade receivables.

9. Main causes of uncertainty over estimates

Estimates are made primarily in the context of the recording of write-downs in the value of assets,to estimate returns of publications, provisions for bad accounts, employee benefits, taxes and otherprovisions. Estimates and assumptions are reviewed periodically and the effects of each resultingchange are reflected immediately in the income statement. In particular, the current uncertain outlookfor the short and medium term, which is resulting in a negative performance of advertising revenuesfor the print segment, has made estimates of future performance and cash flow projections difficult.These projections are used in the determination of the value in use of Cash Generating Units to assessthe retrievability of the book value of intangible assets with an indefinite useful life and that of equityinvestments. Therefore, the generation of results differing from those estimated in the near futurecannot be excluded. Circumstances and events that may affect future performance will be monitored closely bymanagement, which will assess on an ongoing basis possible losses in the value of assetsand, where necessary, adjust the book value of the same accordingly.Estimates of returns of publications and the related add-on products are carried outmonthly and constantly updated through the use of statistical methods applied to up-to-dateinformation on sales. Estimates of legal risks and tax risks take into account the nature of the litigation pending (civil andcriminal). Estimates for homogeneous risk are weighted against the performance in the previousthree years. Historical data shows a stable trend.

10. Scope of consolidation

The scope of consolidation has changed with respect to last year.On 27 June 2017, the merger operation was completed of the company Italiana Editrice SpAand its subsidiaries Publikompass SpA and Nexta Srl (“ITEDI Group”) into GEDI. ItalianaEditrice SpA is the publishing company for two leading daily newspapers “La Stampa” and “IlSecolo XIX”; furthermore, the ITEDI Group, in addition to the publishing business referred toabove, also operates in the local advertising sales sector through Publikompass SpA, as well asin the multi-media sector through Nexta Srl, which is involved, inter alia, in the development,production, management and promotions of publishing services and products and e-commerceand the provision of marketing, It and telecommunication services.

Description of the operationThe integration operation was carried out with a share capital increase with the exclusion ofoption rights for pre-existing shareholders, reserved under subscription to Fiat Chrysler Auto-mobiles N.V. (“FCA”) and to Ital Press Holding SpA (“IPH”), which was released by the latter



with a contribution in kind of the shares, aggregately representing the entire share capital ofItaliana Editrice SpA. As a result of the transaction, on 27 June 2017, GEDI gained control of the ITEDI Group. Thedate of 30 June 2017 was taken as the consolidation date, and consequently the IncomeStatement for the GEDI Group relating to the first six months of 2017 does not include theIncome Statement for ITEDI Group, where the economic effects will only be consolidated asfrom 01 July 2017. The Statement of Financial Position at 30 June 2017 on the other hand,includes the one for the companies of the ITEDI Group. During the six-month period ended 30 June 2017, the ITEDI Group generated revenue for€62,211 thousand, and a negative operating profit for €1,168 thousand. In this regard, it isworth noting that if the acquisition had taken place on 01 January 2017, consolidated revenuewould have amounted to €339,988 thousand and the consolidated profit for the period wouldhave been €6,199 thousand. In calculating these amounts, it was assumed that the fair valueadjustments at the date of acquisition, which were determined on a provisional basis, wouldhave been the same as if the acquisition had taken place on 01 January 2017.

Consideration transferedFor the purposes of the contribution operation with the reserved capital increase, thecontribution value in GEDI of the ITEDI Shares was agreed on between the parties on the basisof an estimate of ITEDI (i.e. equity value of 100% of capital) equalling €79,969,000. Basedon the exchange ratio between the two groups, which had also been agreed on between theparties, the operation was carried with a share capital increase, which saw the issue of96,651,191 new ordinary shares at a unit price of €0.827397978 per share (of which€0.677397978 as the share premium). For the purposes of recognising the business combination, the issue of the shares represents theconsideration transferred for the acquisition. Consequently, in accordance with the provisionsunder the international accounting standard IFRS 3 Business Combinations, the fair value ofthe ordinary shares at the date of issue (which coincides with the date on which control wasacquired) was determined on the basis of the market price for GEDI shares on that date. Themarket price for the new 96,651,191 shares at 27 June 2017 was €0.8655 per share, for a totalvalue for the operation of €83,651,605.81, of which €14,497,678.65 was recorded as theincrease in share capital (nominal unit value of the shares €0.15) and €69,153,927.16 wasrecorded as the share premium (unit value €0.7155).

Acquisition - Related costDuring the first six months of 2017, the Group incurred cost of €749 thousand related to theoperation, pertinent to legal expenses, charges for reports and Advisor costs; these expenseswere recorded under Shareholders’ Equity, in line with international accounting standardsreferring to merger transaction conducted with the issuing of capital instruments.

Identifiable assets acquired and liabilities assumedA summary is provided below of the amounts provisionally recorded with regard to the assetsacquired and liabilities undertaken at 30 June 2017:



Description Notes Amount/000Publications (1) 107,369Other intangible assets (1) 1,704Property, plant and equipment (2) 21,392Investments (4) 1,174Other non-current receivables 207Deferred tax assets (6) 7,611Trade receivables (8) 17,426Inventories (7) 4,399Other receivables (11) 8,082Cash and cash equivalents (12) 8,965Total Assets 178,329Financial debt (16) 16,813Employee termination indemnity and other retirement benefits (18) 13,972Provisions for risks and charges (17) 18,336Deferred tax liabilities (6) 31,251Trade payables (19) 17,934Other payables (21) 13,615Total liabilities 111,921 Provisional fair value of net identifiable assets 66,408

With regard to the amounts shown above, we note that the process to identify the fair value of theassets acquired and liabilities assumed has not yet been completed, as permitted by IFRS 3. Inparticular, a provisional and indistinct allocation was made of the difference of €61,806 thousandbetween the fee for the operation and the book value for the assets acquired and liabilitiesundertaken (for €21,846 thousand) between the two publications “La Stampa” and “Il SecoloXIX” with the consequent recording of deferred tax assets for €17,244 thousand ( at a tax rate of27.9%). It is nonetheless important to point out that pending the completion of the process tocalculate the fair value of the assets acquired and liabilities assumed, the value for the individualassets and liabilities listed above, similarly to the residual value currently attributed to goodwill,could be different once the allocation process has been completed.

GoodwillThe goodwill resulting from the acquisition was recorded as shown in the table below:

Description Amount/000Total value of the operation 83,652Provisional fair value of net identifiable assets 66,408Goodwill 17,244



Other informationIn the scope of the consolidation, it should also be remembered that in the context of themerger plan aimed at ensuring compliance with circulation threshold standards established bycurrent regulations, with the view to the aforementioned integration with ITEDI, during thesecond half of the year, the GEDI Group finalised the following transactions, that were alreadyrecorded in the consolidated financial statements at 31 December 2016:• sale on 01 November 2016 of the business unit including the newspapers “Il Centro” andthe relative printing centre, and “La Città di Salerno”;

• sale on 28 October 2016 of the 71% stake in Seta SpA, publishing company of the “AltoAdige” and “Il Trentino” newspapers;

• as from 01 December 2016 leasing of the business unit including the newspaper “La NuovaSardegna” to the company DB Information SpA.

Advertising sales remained with the concessionaire A. Manzoni & C SpA in respect of all publi-cations.

11. Information relating to financial instruments

On 01 April 2014, GEDI placed an equity linked Convertible Bond for a total of €100 million,with an envisaged 5 year duration (maturity date 09 April 2019), and repayment with aninterim coupon at the fixed rate of 2.625% per annum. The Convertible Bond and relatedinterest payments are unsecured and do not include covenants.The Convertible Bond regulation provides the bondholder with the possibility of converting thebond into a specific number of shares of the issuer company, which on the basis of a formaldocument (deed poll) signed on 28 January 2015, is not entitled to redeem the convertiblebonds (in the event of exercising the conversion right), by means of cash payment instead ofpayment in ordinary shares. Based on the bondholder’s option call, the instrument was recorded by splitting of theinstrument into its two components: one relating to the call option and one to the debtcomponent. The option’s fair value for €4,290 thousand was classified under Shareholders’Equity.At the end of the 2013 period, the company in the Group that is concessionaire for advertisingsales, A. Manzoni&C. SpA, signed two separate factoring contracts (uncommitted) withUniCredit Factoring SpA and Société Général Factoring SpA respectively for a total loan of€40 million.During 2014, the companies in the ITEDI Group signed loan contracts with a pool of banksfor an original amount of €10.7 million: amortisation began during the 2016 financial periodand will be completed in the 2022 financial year.



12. Notes to the statement of financial position items assets

Assets

Intangible assets (1)The breakdown of the category is shown below.

31/12/2016 30/06/2017Publications and trademarks 376,317 483,686Radio frequencies 87,374 87,374Goodwill 2,733 19,977Industrial patents and intellectual property rights 31 657Concessions and licenses 3,669 4,677Assets in process 9 47Other intangible assets - -TOTAL INTANGIBLE ASSETS 470,133 596,418

of which:Intangible assets with an indefinite useful life 466,424 591,037Intangible assets with a defined useful life 3,709 5,381

Research and Development costs were not capitalized and no revaluation of intangible assetswas carried out.

The breakdown of intangible assets and changes in the period are shown in the tables thatfollow.

Intangible assets with an indefinite useful life

Publications and trademarks 30/06/2017Opening balance Original cost 380,757Write-downs (4,440)Opening balance 376,317ADJUSTMENTS TO ORIGINAL COST Increases -Decreases -Business combinations 107,369Closing balance Original cost 483,686Write-downs -Closing balance 483,686



The change in this item refers to the provisional recording of the fair value for the publications“La Stampa” and “Il Secolo XIX” referred to under Note 10 above. In this regard, we notethat pending the completion of the process to calculate the fair value of the assets acquired andliabilities undertaken, the value for the assets and liabilities recorded, similarly to the residualvalue currently attributed to goodwill, could be different once the allocation process has beencompleted.

Frequencies 30/06/2017Opening balance Original cost 87,374Write-downs -Opening balance 87,374ADJUSTMENTS TO ORIGINAL COST Increases -Decreases -Closing balance Original cost 87,374Write-downs -Closing balance 87,374

Goodwill 30/06/2017Opening balance Original cost 2,733Write-downs -Opening balance 2,733ADJUSTMENTS TO ORIGINAL COST Business combinations 17,244Decreases -Closing balance Original cost 19,977Write-downs -Closing balance 19,977

The change during the period item refers to the provisional recording of the fair value for theassets and liabilities of the ITEDI Group referred to under Note 10 above.The detailed list of the CGUs subject to impairment testing at 31 December 2016 is presentedin the consolidated financial statements with the same reporting, to which reference is made.The impairment test carried out at the 2016 reporting date on newspapers, radio frequencies,the internet company, trademarks and goodwill had revealed an impairment of €4,440thousand relating to the “Finegil Editoriale Livorno” CGU, which includes the newspaper “IlTirreno”.



To prepare these condensed half-yearl financial statements, and in accordance with IAS 36, a carefulmonitoring was done of the main qualitative and quantitative ratios relating to each CashGenerating Unit subject to the above impairment tests, to check whether the existence of said ratiosrequire an be update of the impairment tests. The analysis conducted did not reveal any indicatior of impairment losses in any of the CGUsidentified by the Group, with the exception of the Repubblica CGU, which was affected by ahigher downturn in the newspapers advertising market than the expectatations. Thisdeterioration reflected on the results for the publication La Repubblica, creating a drop inadvertising revenue for the first half of 2017 that was higher than the forecasts in the three-year 2017 – 2019 plan approved by the Board of Directors on 01 February 2017. Followingthis trend, a new impairment test was conducted, incorporating the aforementioned worsenedresults in the advertising segment and the most recent estimates for advertising revenue fromnational newspapers, into the new forecasts.The assumptions relating to trends in the sales of newspapers remained unchanged, and as aprecaution, no additional interventions on costs to recover margins were included.The discounting rate (wacc) was kept unchanged in relation to the one used to prepare thefinancial statements at 31 December 2016, as there were no significant changes recorded in itscomponents. In the specific case the discounting rate adopted was the weighted average cost ofcapital (wacc) of GEDI Group, equal to 6.49%.The sensitivity analysis showed that the recoverable value of the “Repubblica” CGU would beequal to the book value, on the basis of a discounting rate of cash flows expected (wacc) of6.83% (8.28% at 31 December 2016), instead of the 6.49% currently used.The impairment procedure carried out on the Repubblica CGU, did not reveal any impairment loss.For all the other information and assumptions used at the close of the 2016 period, to preparethe impairment testing and specifically to determine the value of use for the Cash GeneratingUnits, the calculation of the fair value less costs to sell for the Cash Generating Units and forthe main assumptions underlying the provisional 2017-2019 plans, reference is made to theAnnual Financial report at 31 December 2016.

Other intangible assetsThe table below illustrates the useful life and related amortisation rates for the various classesof intangible assets with a defined useful life.

Useful life RateIndustrial patents and intellectual property rights 2-3 years 33.33%-50.00%Concessions and licenses 3-5 years 20.00%-33.33%Other intangible assets 3-6 years 16.67%-33.33%

The breakdown and changes in intangible assets is shown below.



Industrial patents and intellectual property rights 30/06/2017Opening balance Original cost 1,711Accumulated amortisation and write-downs (1,680)Opening balance 31ADJUSTMENTS TO ORIGINAL COST Increases 100Decreases (377)Business combinations 9,303ADJUSTMENTS TO PROVISIONS Increases (21)Decreases 377Business combinations (8,756)Closing balance Original cost 10,737Accumulated amortisation and write-downs (10,080)Closing balance 657

Concessions and licenses 30/06/2017Opening balance Original cost 49,559Accumulated amortisation and write-downs (45,890)Opening balance 3,669ADJUSTMENTS TO ORIGINAL COST Increases 821Decreases (149)Business combinations 7,307ADJUSTMENTS TO PROVISIONS Increases (971)Decreases 151Reclassifications (1)Business combinations (6,150)Closing balance Original cost 57,538Accumulated amortisation and write-downs (52,861)Closing balance 4,677



Assets in process 30/06/2017Opening balance Original cost 9Opening balance 9ADJUSTMENTS TO ORIGINAL COST Increases 40Decreases (2)Closing balance Original cost 47Closing balance 47

Property, plant and equipment (2)The breakdown of the category is shown below.

31/12/2016 30/06/2017Land 6,872 6,872Industrial and civil buildings 27,841 27,101Leasehold improvements 5,919 11,417Plant and machinery 38,291 50,212Technical equipment 991 946Furniture, fixtures and vehicles 3,683 4,301Assets under construction 239 712Other assets 87 230TOTAL PROPERTY, PLANT AND EQUIPMENT 83,923 101,791

At 30 June 2017 property, plant and equipment amounted to €101,791 thousand, up €17,868thousand with respect to the end of 2016, due to the ITEDI consolidation for €21,392 thousandand new net capital expenditures for €2,375 thousand, which was only partially offset by depre-ciations for €5,899 thousand.

In view of the homogeneity of assets recorded in the statement of financial position, the expecteduseful life of assets by category and the related depreciation rates is as follows.



Useful life RateLand - -Industrial and civil buildings 33 years 3%Printing plants 7 years 15.5%Generic plants 10 years 10%Other plants 5/10 years 20%/10%Full colour rotary presses 20 years 5%Industrial equipment 4 years 25%Vehicles 4 years 25%Furniture, fixtures and ordinary equipment 8 years 12.5%Electronic equipment 3 years 33%Editorial systems 4 years 25%Leasehold improvements per contract per contract

A breakdown of property, plant and equipment owned is included in the tables that follow.

Land 30/06/2017Opening balance Original cost 6,872Opening balance 6,872ADJUSTMENTS TO ORIGINAL COST Increases -Decreases -Closing balance Original cost 6,872Closing balance 6,872

Industrial and civil buildings

30/06/2017Opening balanceOriginal cost 50,448Accumulated amortisation and write-downs (22,607)Opening balance 27,841ADJUSTMENTS TO ORIGINAL COST Increases 61Decreases -ADJUSTMENTS TO PROVISIONS Increases (801)Decreases -Closing balance Original cost 50,509Accumulated amortisation and write-downs (23,408)Closing balance 27,101



Leasehold improvements

30/06/2017Opening balance Original cost 42,615Accumulated amortisation and write-downs (36,696)Opening balance 5,919ADJUSTMENTS TO ORIGINAL COST Increases 243Decreases (1)Business combinations 23,137ADJUSTMENTS TO PROVISIONS Increases (640)Decreases 1Business combinations/Break-ups (17,242)Closing balance Original cost 65,994Accumulated amortisation and write-downs (54,577)Closing balance 11,417

Plant and machinery 30/06/2017Opening balanceOriginal cost 190,455Accumulated amortisation and write-downs (152,164)Opening balance 38,291ADJUSTMENTS TO ORIGINAL COST Increases 892Decreases (17)Reclassifications 135Business combinations 69,404ADJUSTMENTS TO PROVISIONS Increases (3,440)Decreases 17Reclassifications (132)Business combinations (54,938)Closing balance Original cost 260,869Accumulated amortisation and write-downs (210,657)Closing balance 50,212



Technical equipment

30/06/2017Opening balance Original cost 2,350Accumulated amortisation and write-downs (1,359)Opening balance 991ADJUSTMENTS TO ORIGINAL COST Increases 11Decreases (185)Business combinations 170ADJUSTMENTS TO PROVISIONS Increases (75)Decreases 185Reclassifications 2Business combinations (153)Closing balance Original cost 2,346Accumulated amortisation and write-downs (1,400)Closing balance 946

Furniture, fixtures and vehicles 30/06/2017Opening balance Original cost 85,496Accumulated amortisation and write-downs (81,813)Opening balance 3,683ADJUSTMENTS TO ORIGINAL COST Increases 687Decreases (1,097)Business combinations 5,489ADJUSTMENTS TO PROVISIONS Increases (916)Decreases 1,093Business combinations (4,638)Closing balance Original cost 90,575Accumulated amortisation and write-downs (86,274)Closing balance 4,301



Assets under construction

30/06/2017Opening balance Original cost 239Opening balance 239ADJUSTMENTS TO ORIGINAL COST Increases 477Decreases -Reclassifications (4)Closing balance Original cost 712Closing balance 712

Other assets 30/06/2017Opening balance Original cost 3,808Accumulated amortisation and write-downs (3,721)Opening balance 87ADJUSTMENTS TO ORIGINAL COST Increases 3Decreases (12)Business combinations 1,170ADJUSTMENTS TO PROVISIONS Increases (27)Decreases 16Business combinations (1,007)Closing balance Original cost 4,969Accumulated amortisation and write-downs (4,739)Closing balance 230

Investments valued at equity (3)

The table that follows shows investments valued at equity and the percentage share owned.

OWNERSHIP PERCENTAGE 31/12/2016 30/06/2017Le Scienze SpA* 50% 50%Editoriale Corriere Romagna Srl 49% 49%HuffingtonPost Italia Srl 49% 49%Editoriale Libertà SpA 35% 35%Altrimedia SpA 35% 35%Persidera SpA 30% 30%

* Joint venture company



The tables that follow show changes in investments valued at equity.

31/12/2016 Incr. Decreases Dividends Result 30/06/2017Le Scienze SpA* 151 - - (67) (8) 76Editoriale Corriere Romagna Srl 3,264 - - - - 3,264HuffingtonPost Italia Srl 303 - - - (32) 271Editoriale Libertà SpA 13,951 - - (280) 200 13,871Altrimedia SpA 733 - - (35) 22 720Persidera SpA 110,649 - - (3,900) (846) 105,903TOTAL OTHER INVESTMENTS VALUED AT EQUITY

129,051 - - (4,282) (664) 124,105


As mentioned previously, in order to provide a representation of the income results andsubsequent to the restructuring that recently involved certain business activities, the item“Valuation of investments at equity” included in the Income Statement was reclassified amongthe financial postings. Similarly, to provide a better comparison in the figures, this posting wasreclassified in the comparative schedules.With regard to the interest held in Persidera SpA, the portion relating to the Group’s result in theformer included the fair value amortisation of the digital terrestrial frequencies recorded at the timethe shareholding in the subsidiary was acquired, for an amount of €2,077 thousand.At 31 December 2016, the equity investments held in Persidera SpA, Editoriale Libertà SpAand Editoriale Corriere di Romagna Srl were subjected to an impairment test, using methodsand assumptions similar to those adopted for the Group CGUs taking into account the specificbusiness sectors of each company for the determination of both the fair value and the value inuse, which showed no reduction in the book value.For more information on the analyses and assumptions made for the impairment test, referenceis made to the Annual Financial Report at 31 December 2016.Financial highlights of the mentioned investee companies are reported below.

Assets

Liabilities 31/12/2016 30/06/2017 31/12/2016 30/06/2017Le Scienze SpA* 3,318 2,764 3,007 2,604Editoriale Corriere Romagna Srl 1,966 1,968 167 165HuffingtonPost Italia Srl 1,331 1,331 695 695Editoriale Libertà SpA 26,182 25,919 4,497 4,445Altrimedia SpA 4,241 4,153 2,419 2,367


Revenues Profit/(losses) 1st half 2016 1st half 2017 1st half 2016 1st half 2017Le Scienze SpA* 1,517 1,223 16 (16)Editoriale Corriere Romagna Srl 93 96 52 4HuffingtonPost Italia Srl 767 1,990 (139) 125Editoriale Libertà SpA 5,971 5,981 601 589Altrimedia SpA 3,156 3,298 39 64


66 | Gruppo Editoriale L’Espresso | Half-year Financial Statements at 30 June 2017


The financial year of the above companies coincides with that of GEDI Gruppo Editoriale SpA.For the purposes of IFRS 12, the main aggregated economic-financial balances of PersideraSpA are presented below, a significant associated company with respect to the total of the con-solidated assets.

Persidera SpA

31/12/2016 30/06/2017Non-current assets 144,303 137,763Current assets 38,625 30,763Total Assets 182,928 168,526Non-current liabilities 49,199 42,236Current liabilities 31,579 32,785Total liabilities 80,778 75,021

1st half 2016 1st half 2017Revenues 40,318 35,216Net profit 6,658 4,270Comprehensive income 6,830 4,184

At 30 June 2017 Persidera SpA’s current assets include cash and cash equivalents for €105thousand, while the current liabilities include current financial liabilities for €19.0 million. The profit for the six-month period includes amortisation/depreciation for €10.0 million,financial expense for €0.5 million and income taxes for €1.9 million.

The financial year of the above companies coincides with that of GEDI Gruppo Editoriale SpA.

Other investments (4)

Book value at 31 December 2016 3,348Acquisitions and increases 1,204Sales and decreases -Book value at 30 June 2017 4,552

The table that follows shows other investments, changes in the percentage of ownership andthe book value of the investment.



Ownership percentage Book value

31/12/2016 30/06/2017 31/12/2016 30/06/2017ANSA Soc. Coop.a r.l. 16.92% 20.59% 1,902 2,173D-Share Srl 10.96% 10.96% 1,000 1,000To-Dis Srl - 45.00% - 742Telelibertà SpA 4.32% 4.32% 136 136Club Dab Italia Soc. Consortile p.A. 37.50% 37.50% 78 78Liguria Press Srl - 20.00% - 68Immobiliare Editori Giornali Srl 0.34% 7.96% 1 53CSEDI Consorzio - 11.11% - 30FCA Servizi per l’industria S.C.p.A. - 2.00% - 19Premium Publisher Network Consorzio 16.96% 23.96% 14 19Consorzio Edicola Italiana 16.67% 33.33% 10 20Gold 5 Srl 20.00% 20.00% 50 50Tavolo Editori Radio Srl 12.50% 12.50% 14 14Other investments - - 143 150TOTAL OTHER INVESTMENTS 3,348 4,552 The financial year of the above companies coincides with that of GEDI Gruppo Editoriale SpA.

Non-current receivables (5)

31/12/2016 30/06/2017Long-term security deposits 889 869Financial receivables - 200Other non-current receivables 1,109 1,115TOTAL NON-CURRENT RECEIVABLES 1,998 2,184 Other non-current receivables, amounting to €2,184 thousand increased with respect to 31December 2016 due to the effect of the financial receivables brought by Nexta Srl relating tothe sale of a business unit during 2014.



Deferred tax assets and deferred tax liabilities (6) The table that follows shows changes in deferred tax assets/liabilities.

Prepaid taxesTaxable prepaid tax assets

31/12/2016 30/06/2017On personnel provisions 10,742 13,350On risk provisions 18,585 36,987 On write-down of current assets 21,996 24,617On write-down of non-current assets 11,514 12,195On previous years’ tax losses - 3,052TOTAL 62,837 90,201

Deferred tax assets 31/12/2016 30/06/2017On personnel provisions 2,712 3,207On risk provisions 4,893 9,691 On write-down of current assets 5,321 5,937 On write-down of non-current assets 3,056 3,203On previous years’ tax losses - 732TOTAL 15,982 22,770

Deferred taxesTaxable deferred tax

31/12/2016 30/06/2017On lower valuation of personnel provisions 3,568 3,354On lower valuation of risk provisions - 3,487 On higher valuation of current assets 3 - On higher valuation of non-current assets 323,861 433,786 TOTAL 327,432 440,627

Deferred tax liabilities 31/12/2016 30/06/2017On lower valuation of personnel provisions 872 825On lower valuation of risks provisions - 973On higher valuation of current assets 1 - On higher valuation of non-current assets 88,267 119,358 TOTAL 89,140 121,156

The increase in deferred taxes is due for €31,251 thousand to the consolidation of ITEDI. 31/12/2016 30/06/2017Deferred taxes credited/charged 271 180DIRECT RECOGNITION UNDER EQUITY 271 180



Inventories (7)

31/12/2016 30/06/2017

Gross Write-downs Net Gross Write-downs Net Inventories Inventories Inventories InventoriesPaper (raw materials) 7,614 (260) 7,354 8,469 (216) 8,253Printing materials (raw materials) 2,493 - 2,493 4,357 - 4,357Publications(finished products) 45 - 45 219 - 219Add-on and multimedia products (finished products) 71 (7) 64 164 - 164Add-on products(finished products) 2,783 (2,506) 277 1,827 (1,645) 182Other goods 63 (63) - 687 (63) 624TOTAL INVENTORIES 13,069 (2,836) 10,233 15,723 (1,924) 13,799 At 30 June 2017, the decrease in inventories recorded in the income statement amounted to €831thousand (as compared with a decrease of €237 thousand at 31 December 2016), of which €181thousand relating to the positive change in inventories included under “Change in inventories” (at 31December 2016 this change was negative for €431 thousand), and €1,012 thousand relating to thedecrease in paper, raw material, goods and printing materials inventories included under “Purchases”(as compared with a positive €194 thousand at the end of 2016). The entry of ITEDI in the scope of consolidation created an increase in inventories for €4,399thousand.

Trade receivables (8)

31/12/2016 30/06/2017Newsstands and distributors 12,439 14,225Advertising and exchanges 147,668 155,353Other trade receivables 12,840 9,617Receivables from Group companies 1,546 1,174TOTAL TRADE RECEIVABLES 174,493 180,369 The ITEDI consolidation at 30 June 2017 resulted in an increase in Trade receivables of€17,426 thousand.

Receivables from Group companies refer to trade receivables due from companies consolidatedunder the equity method (Le Scienze, Altrimedia, HuffingtonPost Italia and Persidera). Fordetails, see the table in Note 14.4.

At 30 June 2017, the provision for doubtful accounts amounted to €19,709 thousand(€13,379 thousand at 31 December 2016). 30/06/2017Opening balance 13,379Business combinations 6,565Write-downs 639Uses (874)Closing balance 19,709



Financial receivables (9)

31/12/2016 30/06/2017Financial receivables 222 50TOTAL FINANCIAL RECEIVABLES 222 50

Tax receivables (10)

31/12/2016 30/06/2017Corporate income tax (Ires) and regional tax on business activities (Irap) receivables 2,590 3,634Ires receivable from Parent Company 11,548 11,784Ires/Irap to be reimbursed 50 12VAT receivable 327 117Other tax receivables 937 1,318TOTAL TAX RECEIVABLES 15,452 16,865 Tax receivables amount to €16,865 thousand, up by €1,413 thousand with respect to the€15,452 thousand as at 31 December 2016 due to the taxes accrued during the period, aswell as the contribution of the ITEDI Group (for €661 thousand). It should be recalled thatat 31 December 2016, advances were reported net of the theoretical tax liability, while at 30June 2017 the tax receivable and the tax payable were reported separately.

Other receivables (11)

31/12/2016 30/06/2017 Social security receivables 1,218 1,422Security deposits 63 412Advances to suppliers and agents 2,453 8,764Receivables from employees and associates 1,265 839Other receivables 18,353 21,965TOTAL OTHER RECEIVABLES 23,352 33,402 Other receivables refer mainly to rights for add-on products and radio-television programmesto be launched in the second half of 2017.This item includes the credit accrued during the six-month period for the sale (January 2015) ofAll Music, a publishing company of the Italian general TV channel DeejayTV, to Discovery. Inthis regard, you are reminded that the final assignment of LCN 9 to All Music was suspended.On 01 February 2016 the Supreme Court of Cassation approved the legitimacy of the previousdefinitive assignment plan formulated by AGCOM. Consequently the implementation of the planis now pending with the Ministry of Economic Development, and will be completed with the defi-nitive assignment of the LCNs. Should the provisional assignment of channel 9 be confirmed, theEspresso Group will benefit from an extra additional compensation based on the agreementsigned with Discovery. This is currently not reflected in the financial statements due to theuncertainty still surrounding the definitive assignment.The ITEDI consolidation at 30 June 2017 resulted in an increase in Other receivables of€7,371 thousand.



Cash and cash equivalents (12)

31/12/2016 30/06/2017Financial receivables from Group companies 170 171Current account deposits 148,259 169,626Cash on hand 108 224TOTAL CASH AND CASH EQUIVALENTS 148,537 170,021 Cash and cash equivalents amounted to €170,021 thousand, recording an increase of €21,484thousand compared to 31 December 2016 due to the positive flows from operations for €7,220thousand, the positive contribution from the ITEDI Group for €8,965 thousand, the collectionsfrom the sales of assets and shareholdings for €4,248 thousand and the increased flows generatedfrom financing activities in respect of factoring for €7,323 thousand.

Current account deposits are highly liquid short-term financial investments that are readily con-vertible into known cash amounts and not subject to relevant fluctuations in value. These depositswere made in relation to the Group’s financial requirements and were remunerated at a previouslyagreed on fixed rate.

Liabilities and Equity

Share capital (13)At 30 June 2017, the share capital amounted to €76,303,571.85 and was made up of 508,680,479shares with a par value of €0.15 each. In relation to 31 December 2016, share capital increased by€14,497,678.65 due to the capital increase approved by the Shareholders’ Meeting on 27 April2017, with the exclusion of option rights pursuant to article 2441, paragraph 4, first sentence, ofItalian Civil Code, for a total value of €83,651,605.81, of which €14,497,678.65 was assigned toshare capital and €69,153,927.16 as the share premium, through the issue of 96,651,191 newordinary shares, each having a nominal value of €0.15, at a unit price of €0.8655 per share (ofwhich €0.7155 as share premium). The share capital increase was released on 27 June 2017 by con-tribution in kind, by Fiat Chrysler Automobiles N.V. and Ital Press Holding S.p.A, each within theirrespective powers, in shareholdings representing the entire share capital of Italiana Editrice S.p.A.

31/12/2016 30/06/2017No. of shares resolved 474,933,713 570,134,904No. of shares issued 412,039,288 508,690,479 of which: No. of own shares: 21,395,616 21,354,993 All ordinary shares issued are fully paid-in. There are no shares subject to restrictions on thedistribution of dividends, with the exception of the matters envisaged by Article 2357 of theItalian Civil Code regarding own shares.

Reserves (14) The breakdown of reserves and changes occurred in the period are reported in the “Statement ofChanges in the Consolidated Shareholders’ Equity”.

As resolved by the shareholders’ meeting, authorising the Parent Company’s Board of Directors to



acquire ordinary shares of GEDI Gruppo Editoriale SpA. on the market, during the first half of2017, 197,500 shares were acquired for at total of €161,840 thousand. Considering theacquisitions in the previous years, own shares held by the Company at 30 June 2017 amounted to21,354,993, representing 4.198% of the share capital.

Benefits based on financial instruments

The Group recognizes additional benefits to the Managing Director and other employees of theParent Company and its subsidiaries holding top positions within the Group through compen-sation plans based on financial instruments.Specifically, plans adopted by the Company provide for the awarding of rights to participate inthe share capital “stock option”) and in other cases, the awarding of rights to freely receive theParent Company’s ordinary shares (“stock grant”).All stock option plans adopted by the Group between 2001 and 2010 assign beneficiaries theright to exercise, at a pre-determined price and for a set term, an option for the underwritingof new shares of the Company to be issued pursuant to specific resolutions. The shareholders’meetings held on 20 April 2011, 23 April 2012, 18 April 2013, 16 April 2014, 23 April 2015,21 April 2016 and 27 April 2017 resolved the assignment of a stock grant plan for 2011, astock grant plan for 2012, a stock grant plan for 2013, a stock grant plan for 2014, a stockgrant plan for 2015, a stock grant plan for 2016 and a stock grant plan for 2017, respectively,as tools for providing incentives and increasing loyalty in the Group’s management.The stock grant plans provide for attributing each beneficiary of the Plan a specific number ofcontingent rights (Units) to receive ordinary shares already in the Company’s portfolio (ownshares). The Units have been assigned free-of-charge, are not transferable and are divided intotwo categories: “Time-based Units”, whose vesting is subordinate only to the passing of timeand “Performance Units”, whose vesting is subordinate to the passing of time and theachievement of the targets of appreciation in the value of the shares, as well as an additionalperformance parameter linked to the Group’s financial results.The related rules regulate, among other terms and conditions, also the case in which the assigneeof said options and rights ceases for whatever reason to be employed by the company.Attachment No. 2) summarises all the information relating to each stock option and stock grant planoutstanding at 30 June 2017. In particular, as shown in Attachment 2), unexpired stock options thathave not to this day been exercised, amount to 8,802,350, representing 1.73% of the share capital ofthe Company.A description of stock option plans (2002-2010) is provided in the “Information disclosurepursuant to Consob Regulation no. 11971” section in the financial statements at 31 December2016. Below we provide a description of the 2011, 2012, 2013, 2014, 2015 and 2016 stockgrant plans.With regard to the 2017 stock grant plan, it should be noted that at 30 June 2017, the Company’sBoard of Directors had not yet implemented the former.

2011-2012-2013-2014-2015-2016 Stock Grant Plan

The Board Meetings held on 20 April 2011, 23 April 2012, 27 June 2013, 16 April 2014, 23 April2015 and 21 April 2016, availing themselves of the authority granted them by the shareholders’meeting held on the same date, with the exception of the 2013 shareholders’ meeting, held bycontrast on 18 April 2013, respectively resolved the approval of the 2011 stock grant plan, the2012 stock grant plan, the 2013 stock grant plan, the 2014 stock grant plan, the 2015 stock grant



plan and the 2016 stock grant plan, as per the proposal of the Remuneration Committee to bereserved for the Managing Director of the Company (exclusively with reference to the 2011 and2012 stock grant plans) and the employees of the Parent Company and its subsidiaries. Theexercise price is determined in relation to the provisions of Article 9, paragraph IV of theConsolidated Tax Law that makes reference to the simple arithmetic mean of official stock marketprices of the company’s shares in the month that precedes the assignment of the options.On 20 April 2011, a total of 1,410,000 Units were assigned, divided up between Time-basedUnits (705,000) and Performance Units (705,000) at a price of €1.81.The Time-based Units have accrued with the corresponding right of the Beneficiaries to receivethe related shares, free of charge, in quarterly tranches equal to 12.5% of the related total,starting from 21 April 2013. The Performance Units that should have accrued at the samevesting date envisaged for the Time-based Units, but only on condition that the company andshare performance targets were achieved, were never accrued.At 30 June 2017 as per the regulations, 146,723 Time-based Units were in circulation and3,750 Time-based Units have been exercised.On 23 April 2012, a total of 1,897,500 Units were assigned, divided up between Time-basedUnits (948,750) and Performance Units (948,750) at a price of €0.98.The Time-based Units have accrued with the corresponding right of the Beneficiaries to receivethe related shares, free of charge, in quarterly tranches equal to 12.5% of the related total,starting from 24 April 2014. The Performance Units that should have accrued at the samevesting date envisaged for the Time-based Units, but only on condition that the company andshare performance targets were achieved, had accrued in part, and not accrued for theremaining part.At 30 June 2017 as per the regulations, 340,781 Time-based Units were in circulation alongwith 138,927 Performance Units, and 8,125 Time-based Units and 3,125 Performance Unitshave been exercised.On 27 June 2013, a total of 1,395,000 Units were assigned, divided up between Time-basedUnits (697,500) and Performance Units (697,500) at a price of €0.83.The Time-based Units accrued and will accrue, with the corresponding right of the Beneficiariesto receive the related shares, free of charge, in quarterly tranches equal to 12.5% of the relatedtotal, starting from 28 June 2015. The Performance Units that should have accrued at the samevesting date envisaged for the Time-based Units, but only on condition that the company andshare performance targets were achieved, had accrued in part, and not accrued for theremaining part.At 30 June 2017 as per the regulations, 271,255 Time-based Units were in circulation alongwith 186,905 Performance Units; 92,804 Time-based Units and 27,190 Performance Unitshave been exercised; 172,465 Performance Units expired during the period.On 16 April 2014, a total of 1,450,000 Units were assigned, divided up between Time-basedUnits (725,000) and Performance Units (725,000) at a price of €1.70.The Time-based Units accrued and will accrue, with the corresponding right of the Beneficiariesto receive the related shares, free of charge, in quarterly tranches equal to 12.5% of the relatedtotal, starting from 16 April 2016. The Performance Units not yet accrued at the reportingdate, will accrue at the same vesting date envisaged for the Time-based Units, but only oncondition that the company and share performance targets are achieved.

At 30 June 2017 as per the regulations, 389,372 Time-based Units were in circulation alongwith 551,252 Performance Units; 90,003 Time-based Units have been exercised.



On 23 April 2015, a total of 1,420,000 Units were assigned, divided up between Time-basedUnits (710,000) and Performance Units (710,000) at a price of €1.2355.The Time-based Units accrued and will accrue, with the corresponding right of the Beneficiariesto receive the related shares, free of charge, in quarterly tranches equal to 12.5% of the relatedtotal, starting from 23 April 2017. The Performance Units not yet accrued at the reportingdate, will accrue at the same vesting date envisaged for the Time-based Units, but only oncondition that the company and share performance targets are achieved.At 30 June 2017 as per the regulations, 531,874 Time-based Units were in circulation alongwith 545,000 Performance Units; 13,126 Time-based Units have been exercised during theperiod.On 21 April 2016, a total of 1,315,000 Units were assigned, divided up between Time-basedUnits (657,500) and Performance Units (657,500) at a price of €0.9531.The Time-based Units accrued, with the corresponding right of the Beneficiaries to receive therelated shares, free of charge, in quarterly tranches equal to 12.5% of the related total, startingfrom 21 April 2018. The Performance Units will accrue at the same vesting date envisaged forthe Time-based Units, but only on condition that the company and share performance targetsare achieved.At 30 June 2017 as per the regulations, 555,000 Time-based Units were in circulation alongwith 555,000 Performance Units.At the reporting date, the Parent Company’s Board of Directors had not yet implemented the2017 Stock Grant Plan, which had been approved by the Shareholders’ Meeting held on 27April 2017.

*****

Stock option plans and Units adopted by the Group were valued according to the binomial treemethod. This method is commonly used in the valuation of financial options according to thestochastic approach, and makes reference to discreet “binomial” models elaborated from 1979by Cox, Rubinstein and Ross with the intent of providing a general application of the Black-Scholes model.The main assumptions relating to the determination of the fair value of stock option plans(2003 - 2006) are summarized in the table below.

2006 Plan Tranche IIAverage strike price 3.96Expected volatility* 16.56%Risk-free rate 4.10%Fair value 0.6938

* Three-month implicit volatility (official estimate of the Italian Stock Exchange)

While the main assumptions used in determining the fair value of 2016 stock option plans aresummarized in the table below.



Extraordinary plan 2009 Ordinary Plan 2009 Ordinary Plan 2010 Tranche I Tranche II Tranche III Tranche IV Tranche I Tranche II Tranche I Tranche IIAverage strike price 3.84 3.60 2.22 1.37 1.00 1.86 2.25 1.58Expected volatility* 38.98% 38.98% 38.98% 38.98% 38.98% 38.98% 33.23% 29.98%Risk-free rate 2.90% 2.90% 2.90% 2.90% 2.90% 2.90% 3.19% 2.60%Fair value 0.1596 0.1699 0.2404 0.2404 0.5431 0.8927 0.5361 0.3815* Three-month implicit volatility (official estimate of the Italian Stock Exchange)

2011 Stock Grant Time based Units Performance Units

Opening value 1.81 1.81 Expected volatility* 40.81% 40.81%Risk-free rate 3.63% 3.63%Average fair value 1.8357 1.6627


2012 Stock Grant Time based Units Performance UnitsOpening value 0.98 0.98Expected volatility* 40.00% 40.00%Risk-free rate 1.62% 1.62%Average fair value 0.7546 0.6718* Three-month implicit volatility (official estimate of the Italian Stock Exchange)

2013 Stock Grant Time based Units Performance UnitsOpening value 0.83 0.83Expected volatility* 35.00% 35.00%Risk-free rate 1.42% 1.42%Average fair value 0.7875 0.6631* Three-month implicit volatility (official estimate of the Italian Stock Exchange)

2014 Stock Grant Time based Units Performance UnitsOpening value 1.70 1.70 Expected volatility* 40.00% 40.00%Risk-free rate 1.04% 1.04%Average fair value 1.5785 1.4501* Three-month implicit volatility (official estimate of the Italian Stock Exchange)

2015 Stock Grant Time based Units Performance UnitsOpening value 1.24 1.24Expected volatility* 40.00% 40.00%Risk-free rate 0.5% 0.5%Average fair value 1.1900 0.8861




2016 Stock Grant Time based Units Performance UnitsOpening value 0.95 0.95Expected volatility* 39.6% 39.6%Risk-free rate 0.18% 0.18%Average fair value 0.9840 0.7508


At 30 June 2017, the total cost of stock option plans recorded in the financial statementsamounted to €323 thousand (€662 thousand in the first half of 2016).

Minority interests (15)

31/12/2016 30/06/2017Finegil Editoriale SpA 426 441Mo-Net Srl 61 104TOTAL MINORITY INTERESTS 487 545

Financial debt (16)

Non-current financial debt maturity maturity 31/12/2016 30/06/2017 1-5 years over 5 yearsBonds 83,526 85,698 85,698 -Payables to banks for loans - 8,066 8,066 -TOTAL NON-CURRENT FINANCIAL DEBT 83,526 93,764 93,764 - Current financial debt 31/12/2016 30/06/2017Bonds 5,394 5,583Bank overdrafts 39 141Payables to banks for loans - 1,247Leasing and other financial payables 28,135 42,958TOTAL CURRENT FINANCIAL DEBT 33,568 49,929

At 30 June 2017, the value of the equity linked Bond issue amounted to €91,281 thousand intotal. At 31 December 2016, the total amount of the liability amounted to €88,920 thousand.For further information on the characteristics of the loan and classification, reference is madeto Note 11.

Financial leasing and other financial debt include amounts due for the factoring of tradereceivables with recourse. As from 2014, the Group’s advertising concession holder in factconsolidated Factoring transactions (with recourse) with leading credit institutions as fol-lows:



• UniCredit Factoring SpA, for a credit facility of €20 million and an annual rate equal to the3-month Euribor plus 1.75% in addition to flat commission of 0.258% on the value of thefactored portfolio, for an unspecified duration with the faculty to withdraw without notice;

• Société Général Factoring SpA, for a credit facility of €20 million and an annual rate equal tothe 3-month Euribor plus 1.5% in addition to flat commission of 0.18% on the value of thefactored portfolio, for an unspecified duration with the faculty to withdraw without notice.

At 30 June 2017, the debt in respect of UniCredit Factoring SpA stood at €17,236 thousand,and €17,542 thousand in respect of Société Général Factoring SpA.The item also includes the freeing up of receivables carried out by the ITEDI Group.

The payables to banks for loans totalling €9,313 thousand, refer to the loan contracts with apool of banks signed by companies in the ITEDI Group during 2014: the spread is fixed at0.75% until 31 December 2017, and increased for subsequent years over a range of between1.75% and 2.50%; the amortisation began during the 2016 financial period and will becompleted in the 2022 financial year.

Provisions for risks and losses (17)

The table below illustrates the total movements in provisions, as well as movements broken downinto the current and non-current portions.

Legal Social Early Sundry risks Total of which of which proceedings security retirement and contract provisions current non-current litigation incentives renewals Opening balance 10,703 4,032 7,580 45,109 67,424 20,643 46,781Business combinations 6,548 - 9,920 1,868 18,336 17,267 1,069Uses (2,014) - (1,372) (443) (3,829) (3,450) (379)Current/non-current transfers - - - - - 1,373 (1,373)Provisions 777 - 1,032 750 2,559 1,077 1,482Change due to discounting back 95 1 - - 96 - 96Closing balance 16,109 4,033 17,160 47,284 84,586 36,910 47,676

Non-current portion Legal Social Early Sundry risks Total proceedings security retirement and contract provisions litigation incentives renewalsOpening balance 6,008 4,032 - 36,741 46,781Business combinations 1,069 - - - 1,069Uses (191) - - (188) (379)Current/non-current transfers (1,138) - - (235) (1,373)Provisions 777 - - 705 1,482Change due to discounting back 95 1 - - 96Closing balance 6,620 4,033 - 37,023 47,676



Current portion Legal Social Early Sundry risks Total proceedings security retirement and contract provisions litigation incentives renewalsOpening balance 4,695 - 7,580 8,368 20,643Business combinations 5,479 - 9,920 1,868 17,267Uses (1,823) - (1,372) (255) (3,450)Current/non-current transfers 1,138 - - 235 1,373Provisions - - 1,032 45 1,077Closing balance 9,489 - 17,160 10,261 36,910

Excluding the provision for legal proceedings (discounted at the legal rate of interest), the non-current components of provisions for risks and charges were discounted at a 5% rate(unchanged with respect to 31 December 2016), gross of the related tax effect.

Provisions for legal proceedings and labour litigation include risks deriving from libel suits,common to all publishers, risks connected with trade and labour litigation, and thoseconnected with social security audits.

The provision for early retirement incentives relates to the provision of costs expected to beincurred in the reorganization of some Group companies.

The provision for sundry risks consists of provisions for previous years’ taxes, and otherrisks.With reference to the provisions for previous years’ taxes, on 18 May 2012 sentence No.64/9/12 was filed by the Rome Regional Tax Commission, on closing, concerning the 1991IRPEG and ILOR assessments; these assessments gave rise to the following principal findingsregarding tax evasion:• the Tax Authorities dispute the tax benefits deriving from the corporate reorganization tran-sactions of GEDI Gruppo Editoriale consequent to the division of the Mondadori Group(more specifically, the benefits emerging from the merger via incorporation of Editoriale LaRepubblica SpA in Cartiera di Ascoli SpA, which subsequently undertook the name);

• benefits were also disputed relating to beneficial share interest transactions with foreignparties, specifically those relating to the tax credit on dividends and the related withholdingsmade, along with the interest accrued.

With regard to this latter aspect, beneficial interest on shares, in the 2008 financial statementsthe Parent Company had made provisions, evaluating that, in relation to the progress of caselaw, the additional taxes assessed and the related interest would have to be qualified as a“probable risk” (the provisions did not concern just the 1991 tax period but also the three sub-sequent ones, in relation to which the Tax Authorities disputed the same benefit), in contrastto the fines which were qualified as “possible”.With regard to the first aspect, solely concerning 1991, the risk has always been qualified as“remote”, both in light of the technical assessments of the disputes and the outcome of thevarious levels of jurisdiction. You are hereby reminded that:• the facts were first of all subject to the examination of the criminal courts due to alleged taxfraud and the proceedings concluded with an acquittal delivered by the preliminary hearingsjudge, confirmed definitively by the Appeals Court on 09 December 1999, thus fullyacquitting all the directors and auditors;



• before the tax courts, the first and second degree proceedings were both favourable for theCompany, respectively in 1998 and 2000; subsequently, in 2007 the Supreme Court ofCassation cancelled the second degree sentence, referring the case to the Regional Tax Com-mission, what is more passing judgement in just procedural aspects and not prejudicing themerits of the case in any way.

By means of the afore-mentioned sentence, the Regional Tax Commission upheld theposition of the Tax Authorities relating to the most significant dispute in economic terms,concerning the corporate reorganization transactions, while it rejected the dispute relatingto the beneficial interests. On the basis of the opinions updated at 30 June 2017, thissentence would give rise to a maximum risk in terms of amount of €380.7 million(including additional taxes assessed for €121.4 million, interest for €137.9 million andfines for €121.4 million): this value derives from the fact that the Tax Authorities did notlimit themselves simply to refusing to recognize the tax benefits (undue withholdings) of theadditional values recorded at the time of the allocation of the “cancellation deficit” in themerger process, but unexpectedly demanded the immediate and full taxation of this deficitin as far as in itself lacking any income-related values, on the same footing as a “realized”capital gain.On 27 June 2012, the Company took steps to file an appeal before the Supreme Court ofCassation against the second degree sentence while on 28 June 2012 an application for thesuspension of the effects of said sentence was filed care of the Rome RTC pursuant to andfor the purposes of Article 373 of the Italian Code of Civil Procedures; the petitions wasupheld by the Rome RTC by means of sentence deposited on 19 July 2012.By virtue of the awareness of the statutory-tax-related legitimacy of the transactions subjectto tax dispute, as well as on the basis of the technical opinions obtained from third partyprofessionals, the Parent Company has confirmed the opinion of the degree of “probable”risk relating to the beneficial share interest transactions (even if the same came out on thewinning side on the point before the RTC) extending, at the end of 2012, the same level ofrisk to fines, further to recent and consolidated positions of the Supreme Court ofCassation, and has classified the risk linked to the corporate restructuring transactions inrelation to which it emerges as the losing party as merely “possible”.On this issue, we note that in 2015, Legislative Decree 128 was issued, which in additionto repealing the previous tax evasion regulation, brought changes to the Law on Grants(Law 212/2000), providing greater clarity to the tax law with the introduction of a singledefinition for the basis of rights abuse and tax evasion.With regard to the aspects pertaining to the beneficial share interest transactions, the ParentCompany had taken steps to set aside until 31 December 2016, an amount of €35,460million (to cover the risks linked to the amortization of the cost incurred for the purchaseof the beneficial interest, the tax credit on dividends, the related withholdings made and theinterest accrued), with reference to all four tax periods assessed. You are hereby remindedthat, during 2012, following the favourable sentence of the Court of Cassation by means ofwhich the proceedings were extinguished, steps were taken to release the provision relatingto 1992. At 30 June 2017, subsequent to the provision of €173 thousand made for theinterest accrued, the provision for this case amounts to €35,633 thousand.



Employee termination indemnity and other retirement benefits (18)

Defined benefit plansProvisions for Employee Termination Indemnity accrued up until 31 December 2006 bycompanies with more than 50 employees and those accrued at 30 June 2017 by all other com-panies, in addition to the Indemnity for managers of newspapers, fall within the defined benefitplan category and are therefore determined according to actuarial methods. Both Plansrepresent the present value of the future legal obligation.Benefits are calculated based on the following assumptions:

EMPLOYEE TERMINATION INDEMNITIES OTHER PROVISIONSYearly technical discounting back rate 1.31% 1.31%Yearly inflation rate 1.5% 1.5%Yearly rate of increase in remuneration* 1-1.5% 1-1.5%

* On the basis of the category

The amounts recorded in the Statement of Financial Position were determined as follows.

Provisions for Employee Termination Indemnity 30/06/2017Opening balance 41,192Provision for employment in the period (service cost) 19Increase due to interest (interest cost) 265(Benefits paid) (1,501)Business combinations 12,012Closing balance 51,987

Other retirement benefits 30/06/2017Opening balance 6,644Provision for employment in the period (service cost) 196Increase due to interest (interest cost) 31(Benefits paid) (229)Business combinations 1,960Closing balance 8,602

The average number for the year and the actual number of employees are shown in the table below.

Average number of employees Number of employees at year-end 1st half 2016 1st half 2017 31/12/2016 30/06/2017Journalists 997 831 832 832Manual workers 219 170 171 167Office workers 878 830 829 831Executives 67 64 65 63Fixed-term employees 52 52 43 63TOTAL 2,213 1,947 1,940 1,956



Trade payables (19)

31/12/2016 30/06/2017Payables to suppliers of: • paper 5,451 4,938• printing services 6,914 6,848• transport and distribution 2,609 1,398• investments 3,811 1,309• promotions 5,819 4,134• add-on products 4,354 4,157• freelance work 4,289 2,659• other editorial costs 3,808 2,570• utilities and maintenance 4,765 3,024• other suppliers 50,389 66,680Advances received 165 127Payables to Group companies 3,627 1,725TOTAL TRADE PAYABLES 96,001 99,569

Payables to Group companies, amounting to €1,725 thousand, refer to trade payables due tocompanies consolidated under the equity method (Le Scienze, Altrimedia, HuffingtonPost andPersidera). For details, see the table in Note 14.4.

Terms of payment for trade payables normally range between 60 and 90 days.

The ITEDI consolidation at 30 June 2017 resulted in an increase in Trade payables of€17,934 thousand.

Tax payables (20)

31/12/2016 30/06/2017IRAP payables 1,226 2,963Payables for withholding tax and IRPEF 7,845 5,254VAT payable 873 2,817Other tax payables 79 186TOTAL TAX PAYABLES 10,023 11,220

As stated previously, at 30 June 2017, Ires/iIrap payables were recognised separately from thereceivables emerging at the time of the first rate instalment, contrary to what happened at 31December, when the figures were reported at the net value.



Other payables (21)

31/12/2016 30/06/2017Social Security payables 16,363 12,668Payables to personnel for holidays 9,131 10,615Other payables to personnel 11,508 11,520Payables to Directors and Auditors 142 64Accrued liabilities 2,039 6,063Payables for subscriptions 5,453 5,428Payables for grants pursuant to Italian Law No. 62/2001 442 410Other payables 5,768 9,714TOTAL OTHER PAYABLES 50,846 56,482

13. Notes to the comprehensive income statement items

Revenues (22)

1st half 2016 1st half 2017Circulation revenues 116,212 93,753Advertising revenues 170,687 184,554Printing services provided to others 347 2,749Sale of rejects and returns 738 682Sale of internet and mobile services 771 862Rights and trademark royalties 289 314Sale of contents 1,808 1,158Sale of other services 2,026 3,210Sale of other products and services 17 15TOTAL REVENUE 292,895 287,297

Other operating income (23)

1st half 2016 1st half 2017Grants 117 71Capital gains on disposal of assets 10 16Extraordinary gains 3,087 5,226Rentals receivable - 1Other income 1,783 687TOTAL OTHER OPERATING INCOME 4,997 6,001

The item extraordinary gains mainly refers to the release of provisions made in previous years.



Costs for purchases (24)

1st half 2016 1st half 2017Paper for newspapers, periodicals and add-on products 17,747 14,151Materials for printing 6,238 5,556Purchase of add-on products 2,454 1,523Consumables 884 746Other goods 83 126Change in raw material and merchandise inventories 1,089 1,012TOTAL PURCHASES 28,495 23,114

The drop in the costs for paper and printing materials refers for €1.7 million mainly to thedeconsolidation of the local publications during the second half of 2016.

Costs for services (25)

1st half 2016 1st half 2017Printing and other work carried out by third parties 10,045 8,311Distribution 9,161 7,059Reproduction rights SIAE and other copyright costs 4,466 3,690Promotions 7,196 6,929Publisher fees 19,719 46,570Agent and agency fees 12,037 12,851Editing costs 24,807 22,246Radio and TV productions 201 361Advisory 4,220 3,226Travelling expenses 3,693 3,500Telephone and data transmission 1,347 1,170Maintenance and utilities 8,259 7,573Technical equipment operation 5,517 3,302Rentals payable 7,060 7,319Security, cleaning and refuse disposal 1,529 1,343Other costs for services 10,646 10,669TOTAL SERVICE COSTS 129,903 146,119

Publisher fees, which amounted to €46,570 thousand, include the portion of advertising revenuescharged back by the Group concession holder, A. Manzoni & C., to third party editors. The increaseof €26,851 thousand compared to the first half of 2016 is mainly due to the acquisition effective from01 January 2017 of the national revenue from the publications La Stampa and Il Secolo XIX and theadvertising concession for Radio Italia.



Other operating charges (26)

1st half 2016 1st half 2017Provision for risks and charges 645 822Taxes and duties 1,079 946Public relations and gifts 135 100Membership fees 1,361 1,283Settlements and reimbursements 163 125Extraordinary losses 645 912Write-downs of and losses on receivables 525 601Capital losses on disposal of assets 13 1Other operating charges 142 22TOTAL OTHER OPERATING CHARGES 4,708 4,812

Personnel costs (27)

1st half 2016 1st half 2017Wages and salaries 98,314 86,131Provisions for employee termination indemnities 5,175 4,758Provisions for retirement benefits 79 196Provision for paid leave costs 3,368 2,550Stock grant 662 323Early retirement incentives 150 1,217Other personnel costs 1,773 1,510TOTAL PERSONNEL COSTS 109,521 96,685

Personnel costs amounted to €96,685 thousand, down by €12,836 thousand on the first halfof 2016, resulting from the deconsolidation of local publications during 2016 (€9.9 million),as well as the ongoing reorganisation plans that reduced the average staff component by 1.9%compared to the first six months of the previous period, with the scope being the same.

Depreciation, amortisation and write-downs (28)

1st half 2016 1st half 2017Intangible assets amortisation 730 992Tangible assets depreciation 6,688 5,899Write-downs of intangible assets - -Write-downs of property, plant and equipment 49 -TOTAL DEPRECIATION, AMORTIZATION AND WRITE-DOWNS 7,467 6,891



Financial income (expense) (29)

1st half 2016 1st half 2017Dividends - -Interest received on current accounts and short-term deposits 186 41Foreign-exchange gains 52 25Other financial income 27 22Financial income 265 88Interest on bank overdrafts (2) (3)Accessory banking expenses (328) (296)Interest on bonds issued (3,496) (3,669)Interest on loans and financing (253) (293)Foreign-exchange losses (30) (24)Financial charges on application of IAS (605) (392)Other financial charges (63) (54)Financial expense (4,777) (4,731)TOTAL FINANCIAL INCOME (EXPENSE) (4,512) (4,643)

Taxes (30)

1st half 2016 1st half 2017Current taxes (190) 2,372Deferred and prepaid taxes 4,171 1,580Tax payables previous periods 174 174TOTAL TAXATION 4,155 4,126

Income taxes for the first six months of 2017 amounted in total to €4,126 thousand, and areessentially stable in relation to the first half of 2016, even though there has been a significantreduction in the result before taxes, especially subsequent to the drop in the remuneration ratioto apply to the net change in equity capital (ACE), which was introduced by Law 96/2017,which penalised the 2017 result by €0.6 million; the 2016 result had also benefited fromincome from the tax consolidation that was €0.4 million higher than in 2017.

Minority interests (31)These refer to the portion of profits attributable to Finegil Editoriale SpA and Mo-Net Srl.

Earnings per share (32)Basic earnings per share are calculated by dividing the net profit for the period pertaining to the Groupby the weighted average number of ordinary shares in circulation in the period (excluding own shares).The diluted earnings per share are calculated by dividing the net profit for the period attributed toordinary shareholders by the weighted average number of ordinary shares in circulation in the period,adjusted for the diluting effect of stock options. The table that follows shows income per share and other information used in the calculation of thediluted earnings per share.



1st half 2016 1st half 2017Net profit 12,131 7,367Weighted average number of shares in circulation (’000) 390,718 390,953Earnings per share 0.031 0.019

1st half 2016 1st half 2017Net profit 12,131 7,367Weighted average number of shares in circulation (’000) 390,718 390,953No. of options (’000) 66,390 62,780Diluted earnings per share 0.027 0.016

Dividends paid (33)No dividends were distributed during the first six months of 2017.

14. Other information

14.1 Net financial positionThe net financial position of the Group is shown in the table below.

31/12/2016 30/06/2017

Current financial receivables from Group companies 170 171Cash and deposits 148,367 169,850Bank overdrafts (39) (141)Cash and cash equivalents 148,498 169,880Marketable securities and other financial assets 222 50Bond issue (88,920) (91,281)Other bank debt - (9,313)Other financial debt (28,135) (42,958)Other financial assets (liabilities) (116,833) (143,502)NET FINANCIAL POSITION 31,665 26,378

The net financial position at the end of June 2017 was positive for €26,378 thousand comparedto the €31,665 thousand at 31 December 2016, coming down by €5,287 thousand. Thedifferent ITEDI financial postings, classified under the Net financial position, were negative for€7,798 thousand.

14.2 Significant non-recurrent events and operationsThe integration with the assets of Italiana Editrice S.p.A. (“ITEDI”) and the related group wasfinalised on 27 June 2017. The operation was completed after the share capital increase wasconcluded, as approved by the Shareholders’ Meeting on 27 April, through the stipulation ofa deed to transfer to GEDI the equity investments in ITEDI held by FIAT Chrysler AutomobilesS.p.A. (“FCA”) and Ital Press Holding SpA (“IPH”) equal to 77% and 23% of the sharecapital, respectively (the “ITEDI Shares”). Following this increase, CIR holds 43.4% of GEDI, while the shareholders of ITEDI, FCA andIPH, are assigned 14.63% and 4.37% of the company’s share capital, respectively.



14.3 Transactions deriving from atypical or unusual operationsIn compliance with Consob Communication dated 28 July 2006, we acknowledge that inthe first half of 2015 the Group did not carry out any significant atypical and/or unusualoperations, as defined in said Communication.

14.4 Related-party transactionsTransactions carried out by the Company, including transactions with related parties, arecarried out in the normal course of business and are settled at market rates.It is to be noted that the conclusion of operations with related parties is subject to a specificprocedure approved by the Board of Directors, which is described in the annual report onCorporate Governance included in a specific section of the Financial Statements at 31December 2016, available for consultation both on the Company’s site and with BorsaItaliana SpA. In particular, GEDI Gruppo Editoriale SpA, holds with its subsidiaries and affi-liated companies both trade relationships and relationships involving the provision of opera-tional and financial services and consulting. The most significant trade transactions includedthose with the subsidiaries A. Manzoni & C. SpA concessionaire for advertising sales, thosewith Somedia SpA for the management of distribution at national level, with Elemedia SpAfor the management of sites, and with Rotocolor SpA for printing services. The Companyalso manages centralised cash management service in which all the subsidiaries participate. GEDI Gruppo Editoriale SpA receives in turn from its Parent Company CIR SpA, servicesand consulting on strategic, administrative, financial and tax matters. It is to be noted thatthe provision of such services on the part of the Parent Company is deemed as preferable tothe provision of the same on the part of third parties thanks, among other things, to the wideknowledge and experience CIR SpA has acquired over time on the company and the segmentin which GEDI Gruppo Editoriale SpA operates.Since the 2004 financial year, GEDI Gruppo Editoriale SpA and the majority of itssubsidiaries participate in the Parent Company’s CIR “tax consolidation” procedure. In June2016, participation in the consolidated tax regimen was extended for the three-year period2016-2018. Subsequent to the integration of the assets of the ITEDI Group and the new cor-porate structure, the Parent Company CIR holds a 43.4% stake, to the extent that the requi-rement of necessary control to ensure the continuation in the CIR tax consolidation haslapsed. Consequently, as from the 2017 tax year, GEDI Spa and the companies in the Groupwill no longer be part of the CIR tax consolidation. The Company is currently assessing thepossibility of establishing its own tax consolidation.GEDI Gruppo Editoriale SpA and the majority of the subsidiary companies continued toavail themselves of the specific “Group VAT” system.Lastly, as regards compensation plans on financial instruments reserved for directors andemployees of Group companies, refer to Note 12.14 (Reserves).The data (expressed in thousands of euro) regarding the economic, equity and financialrelations of GEDI Gruppo Editoriale SpA with its related companies is set forth below.



14.5 Risk managementFinancial risksThe management of financial risk is regulated by a set of rules that outline the objectives,strategies, guidelines and operating procedures.In the management of financial resources and treasury, the Group adopts a procedure thatimplies the application of prudence and limited risk criteria in the choice of financial and inve-stment policies, prohibiting all speculative operations except for those motivated and approvedby the Board of Directors of the Parent Company.The Parent Company GEDI Gruppo Editoriale SpA manages and coordinates a centralizedintragroup current account, in which all subsidiaries take part, aiming at obtaining economicadvantages in relationships with financial counterparts and stronger operating efficiency. Cen-tralization in fact allows for more efficient planning and control of cash flows, ensures higherconsistency in financing and investment choices, optimises the overall risk profile of the Groupand, above all, strengthens its contractual power with the banking system. The Companyessentially uses two channels to raise financial resources: the international bond market and thefactoring of receivables of the concession holder A.Manzoni&C. SpA. The long-term bank loans entered into as investments facilitated by legislation on publishing,were fully repaid during the first half of 2016. For additional information on the convertible equity-linked bond issue, please refer to Notes4.22 and 11.

Price risk As it is active in the publishing segment, the Group acquires large quantities of paper. Toachieve a more efficient management of paper purchases and to strengthen its bargainingposition with counterparts, thus promoting competition among suppliers, the management ofpaper purchases for the Group was centralized. In the past, the Group stipulated a number of paper swap contracts on a portion of its paperneeds. Having however assessed their ineffectiveness over the medium term, the Group hasdecided to discontinue the use of such instruments.


GEDI Gruppo Editoriale SpA transactions with related companies

Costs Revenues Tax Tax Fin.cial Tax Guarantees charges income financial receivables trade financial payables trade provided

SUBSIDIARIES

Ksolutions SpA (in liquidation) - - - 1 171 - - - - 9 -

ASSOCIATED COMPANIES

Le Scienze SpA 76 512 - 67 - - 1,028 - - 767 -

Persidera SpA 195 81 - 3,900 - - 35 - - 73 -

HuffingtonPost Italia Srl 658 102 - - - - 55 - - 268 -

Editoriale Libertà SpA - 39 - 280 - - 9 - - - -

Altrimedia SpA 239 161 - 35 - - 41 - - 67 -

PARENT COMPANIES

CIR SpA 492 11 - - - 11,784 6 - - 502 -

Cofide SpA 68 11 - - - - - - - 39 -


Credit risk The credit risk exposure of the Group relates to trade and financial receivables. Due to the sector in which it operates, the Group is not subject to significant credit risk ontrade receivables. Though there are no significant concentrations of such risks, the Grouphowever adopts operating procedures that bar the sale of products or services to customers thatdo not possess an adequate risk profile or provide collateral guarantees. The Group hastherefore accrued a congruous provision for doubtful accounts. With regard to financial recei-vables, investments in short-term financial instruments and trading in derivatives are carriedout only with banks that possess a high credit standing.Additional information on risks relating to operations and risks connected with the generalperformance of the economy are provided in the relevant section of the Report of the Board ofDirectors.

14.6 CommitmentsAt 30 June 2017, the Group had commitments amounting to €25,385 thousand relating to:• guarantees provide by the Parent Company to companies that are part of the VAT pool for

€21,093 thousand;• contracts for the purchase of plant and other printing equipment for €307 thousand;• other guarantees amounting to €3,985 thousand, referring mainly to sureties pertaining tothe Parent Company and the subsidiaries A.Manzoni&C and Finegil Editoriale.

14.7 Essential reclassified data of the subsidiaries

Shareholders’ Financial

Net

Revenue

Gross Operating

Net

Equity position invested operating

profit

profit(€ thousand) capital profit

Finegil Editoriale SpA 182,082 22,757 159,325 57,662 8,750 7,936 5,844Elemedia SpA 67,779 (13,051) 80,830 48,192 9,028 7,639 5,307A. Manzoni & C. SpA 12,839 (38,994) 51,833 183,495 1,217 1,169 378Rotocolor SpA 54,908 10,959 43,949 17,835 3,049 503 317Somedia SpA 1,759 4,277 (2,518) 3,742 427 257 170Monet Srl 611 298 313 1,106 284 260 256ITEDI SpA 27,362 (16,068) 46,022 57,196 1,552 (693) (1,717)Publikompass SpA 9,839 6,750 3,089 17,463 132 (157) (249)Nexta Srl 1,804 1,520 284 1,108 234 233 175

As detailed in the Board of Directors’ Half-yearly Report on operations at 30 June 2017, GEDIacquired control of the ITEDI Group with effect from 27 June 2017. The date of 30 June 2017was taken as the consolidation date, and consequently the Income Statement for the GEDIGroup relating to the first six months of 2017 does not include the Income Statement for ITEDIGroup, where the economic effects will only be consolidated as from 01 July 2017. TheStatement of Financial Position at 30 June 2017 on the other hand, includes the one for thecompanies of the ITEDI Group.



Attachments

55865_INT@91-96_Allegati_EN_x 16/11/17 10:04 Pagina 91


Summary statement of group companies

ATTACHMENT NO. 1Company name Office Share % Investment heldand business activities capital by the companyPARENT COMPANY- GEDI Gruppo Editoriale SpA Rome 76,304 CIR SpA

publishing

SUBSIDIARIES CONSOLIDATED UNDER THE LINE-BY-LINE METHOD

- A. Manzoni & C. SpA Milan 15,000 100 GEDI Gruppo Editoriale SpA

advertising concessionaire

- Elemedia SpA Rome 25,000 100 GEDI Gruppo Editoriale SpA

radio, internet and satellite television

- Finegil Editoriale SpA Rome 128,799 99.78 GEDI Gruppo Editoriale SpA

publishing

- Italiana Editrice SpA Turin 7,500 100 GEDI Gruppo Editoriale SpA

publishing

- Mo-Net Srl Assago 36 83 Elemedia SpA

internet (MI)

- Nexta Srl Turin 50 100 Italiana Editrice SpA

internet services

- Publikompass SpA Turin 3,068 100 Italiana Editrice SpA


- Rotocolor SpA Rome 25,000 100 Finegil Editoriale SpA

printing

- Somedia SpA Milan 678 100 GEDI Gruppo Editoriale SpA

services

AFFILIATED COMPANIES CONSOLIDATED UNDER THE EQUITY METHOD

- Altrimedia SpA Piacenza 517 35 Finegil Editoriale SpA


- Editoriale Corriere Romagna Srl Forlì 1,757 49 Finegil Editoriale SpA

publishing

- Editoriale Libertà SpA Piacenza 1,000 35 Finegil Editoriale SpA

publishing

- HuffingtonPost Italia Srl Rome 250 49 GEDI Gruppo Editoriale SpA

publishing

- Le Scienze SpA Rome 103 50 GEDI Gruppo Editoriale SpA

publishing

- Presidera SpA Rome 21,429 30 GEDI Gruppo Editoriale SpA

network operatorN.B. Figures in thousands of euro, unless stated otherwise


Half-year Financial Statements at 30 June 2017 | GEDI Gruppo Editoriale 93

Company name Office Share % Investment heldand business activities capital by the companySUBSIDIARIES AND AFFILIATED COMPANIES VALUED UNDER THE COST METHOD- Cellularmania.com Srl (in liquidation) Rome 10 100 Elemedia SpAinternet services- Club DAB Italia - Società Consortile p.A. Milan 240 37.50 Elemedia SpAbroadcasting services- Enotrya Srl (in liquidation) Rome 77 70 Elemedia SpAe-commerce- Ksolutions Srl (in liquidation) Massa 100 100 Elemedia Spainternet services- Gold 5 Srl (in liquidation) Milan 250 20 A. Manzoni & C. SpAinternet services- Liguria Press Srl Genoa 240 20 Italiana Editrice SpAdistribution services

OTHER COMPANIES VALUED UNDER THE COST METHOD- Agenzia ANSA Soc. Coop. a r.l. Rome 10,783 3.68 GEDI Gruppo Editoriale SpAnews agency 13.24 Finegil Editoriale SpA

3.68 Italiana Editrice SpA- Agenzia Informativa Adriatica d.o.o. Capodistria 13 19 Finegil Editoriale SpAnews production and transmission (Slovenia)- Audiradio Srl (in liquidation) Milan 258 7.50 A. Manzoni & C. SpAmarket research- Consorzio Edicola Italiana SpA Milan 51 16.67 GEDI Gruppo Editoriale SpAdigital publishing services 16.67 Italian Editrice SpA- Consuledit Soc. Consortile a r.l. (in liquidation) Milan 20 6.64 GEDI Gruppo Editoriale SpAnews agency 5.48 Finegil Editoriale SpA

3.70 Italiana Editrice SpA- C.S.E.D.I. Consorzio Milan 103 11.11 Somedia SpAdistribution services- D-Share Srl Modugno 111 10.96 Elemedia SpAinternet services (BA)- FCA servizi per l’industria Soc. Consortile p.A. Turin 1,653 2 Italiana Editrice SpAservices- Fidimpresa Liguria Soc. Consortile p.A. Genoa 15,480 0.01 Italiana Editrice SpAcredit guarantee services- Immobiliare Editori Giornali Srl Rome 830 0.34 Finegil Editoriale SpAreal estate 7.61 Italiana Editrice SpA- Premium Publisher Network consorzio Milan 19 16.96 GEDI Gruppo Editoriale SpAinternet services 7 Italian Editrice SpA- Presto Technologies Inc. (not operational) Cambridge 7,664(,000) $ USA 7.83 Elemedia SpAinternet services (USA - MA)- Tavolo Editori Radio Srl Milan 110 12.5 Elemedia SpAmarket research- Telelibertà SpA Piacenza 2,200 4.32 Finegil Editoriale SpAtelevision broadcasting services- To-Dis Srl Turin 510 45 Italiana Editrice SpAdistribution services- Trento Press Service Srl Gardolo di Trento 260 1.6 Italiana Editrice SpAdistribution services (TN)

N.B. Figures in thousands of euro, unless stated otherwise



Employ

ee stock

opt

ion

plan

s at 3

0 Jun

e 2017

ATTA

CHM

ENT

NO. 2

Stock Option Plan 2006 - Tranche II

625,000

3.96

-

-

625,000

3.96

-

-

-

--

-

-

-

-

-

Extraord. Stock option plan 2009 - Tranche I

942,500

3.84

-

-

15,000

3.84

-

-

-

--

927,500

3.84

0.25

927,500

3.84

Extraord. Stock option plan 2009 - Tranche II

942,500

3.60

-

-

15,000

3.60

-

-

-

--

927,500

3.60

0.75

927,500

3.60

Extraord. Stock option plan 2009 - Tranche III

1,077,500

2.22

-

-

15,000

2.22

-

-

-

--

1,062,500

2.22

1.25

1,062,500

2.22

Extraord. Stock option plan 2009 - Tranche IV

603,200

1.37

-

-

5,100

1.37

-

-

-

--

598,100

1.37

1.75

598,100

1.37

Ord. Stock Option Plan 2009 - Tranche I

338,850

1.00

-

-

-

-

-

-

-

--

338,850

1.00

2.25

338,850

1.00

Ordinary stock option plan 2009 - Tranche II

1,631,000

1.86

-

-

22,500

1.86

-

-

-

--

1,608,500

1.86

2.75

1,608,500

1.86

Ordinary stock option plan 2010 - Tranche I

1,777,500

2.25

-

-

25,000

2.25

-

-

-

--

1,752,500

2.25

3.25

1,752,500

2.25

Ordinary stock option plan 2010 - Tranche II

1,611,900

1.58

-

-

25,000

1.58

-

-

-

--

1,586,900

1.58

3.75

1,586,900

1.58

TOTAL

9,549,950

2.37

--

747,600

3.70

--

--

-8,802,350

2.26

2.29

8,802,350

2.26

Optio

ns in

circ

ulat

ion

at b

egin

ning

of t

he p

erio

dOp

tions

ass

igne

d du

ring

the

perio

dOp

tions

can

celle

d du

ring

the

perio

dOp

tions

exe

rcis

ed

durin

g th

e pe

riod

Optio

ns e

xpire

d du

ring

the

perio

dOp

tions

in c

ircul

atio

nat

the

end

of th

e pe

riod

Number

of options

Weighted

average

price for

the period

Number

of options

Weighted

average

price for

the period

Number

of options

Weighted

average

price for

the period

Number

of options

Weighted

average

price for

the period

Weighted average

market price

on date of

exercising

Number of

options

Weighted

average

price for

the period

Number

of options

Weighted

average

price for

the period

Optio

ns e

xerc

isab

le

at e

nd o

f per

iod

Number

of options

Weighted

average

price for

the period

Average

expiry

(years)


Half-year Financial Statements at 30 June 2017 | GEDI Gruppo Editoriale 95

Time-based Units

150,473

1.81

-

-

-

-

-

-

3,750

1.81

146,723

1.81

613,799

1.81

146,723

1.81

Performance-based Units

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Units

in ci

rcula

tion

at be

ginnin

g of t

he pe

riod

Units

ass

igne

d du

ring

the

perio

dUn

its c

ance

lled

durin

gth

e pe

riod

Units

exe

rcis

ed d

urin

gth

e pe

riod

Number of

Units

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Units

exe

rcis

eddu

ring

the

perio

dUn

its in

circ

ulatio

n at

the e

nd of

the p

eriod

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Number of

Units

Number of

Units

Number of

Units

Number of

Units

Number of

Units

Employ

ee stock

grant

plans

at 30 Jun

e 2017

2011 S

tock

Grant

Units

acc

rued

dur

ing

the

perio

d (in

clus

ive o

f UA)

Weighted

average

price for

the period

Number of

Units

Optio

ns th

at m

ay b

e ex

erci

sed

at e

nd o

f th

e pe

riod

Weighted

average

price for

the period

Number of

Units

Time-based Units

348,906

0.98

-

-

-

-

-

-

8,125

0.98

340,781

0.98

868,750

0.98

340,781

0.98

Performance-Based Units

142,052

0.98

-

-

-

-

-

-

3,125

0.98

138,927

0.98

543,000

0.98

138,927

0.98

Units

in ci

rcula

tion

at be

ginnin

g of t

he pe

riod

Units

ass

igne

d du

ring

the

perio

dUn

its c

ance

lled

durin

gth

e pe

riod

Units

exe

rcis

ed d

urin

gth

e pe

riod

Number of

Units

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Units

exe

rcis

eddu

ring

the

perio

dUn

its in

circ

ulatio

n at

the e

nd of

the p

eriod

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Number of

Units

Number of

Units

Number of

Units

Number of

Units

Number of

Units

2012 S

tock

Grant

Units

acc

rued

dur

ing

the

perio

d (in

clus

ive o

f UA)

Weighted

average

price for

the period

Number of

Units

Optio

ns th

at m

ay b

e ex

erci

sed

at e

nd o

f th

e pe

riod

Weighted

average

price for

the period

Number of

Units

Time-based Units

364,059

0.83

-

-

-

-

-

-

92,804

0.83

271,255

0.83

600,008

0.83

271,255

0.83


386,560

0.83

-

-

-

-

172,465

0.83

27,190

0.83

186,905

0.83

419,417

0.83

178,779

0.83

Units

in ci

rcula

tion

at be

ginnin

g of t

he pe

riod

Units

ass

igne

d du

ring

the

perio

dUn

its c

ance

lled

durin

gth

e pe

riod

Units

exe

rcis

ed d

urin

gth

e pe

riod

Number of

Units

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Units

exe

rcis

eddu

ring

the

perio

dUn

its in

circ

ulatio

n at

the e

nd of

the p

eriod

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Number of

Units

Number of

Units

Number of

Units

Number of

Units

Number of

Units

2013 S

tock

Grant

Units

acc

rued

dur

ing

the

perio

d (in

clus

ive o

f UA)

Weighted

average

price for

the period

Number of

Units

Optio

ns th

at m

ay b

e ex

erci

sed

at e

nd o

f th

e pe

riod

Weighted

average

price for

the period

Number of

Units



Time-based Units

545,000

1.24

-

-

-

-

-

-

13,126

1.24

531,874

1.24

68,131

1.24

55,005

1.24


545,000

1.24

-

-

-

-

-

-

-

-

545,000

1.24

-

-

-

-

Units

in ci

rcula

tion

at be

ginnin

g of t

he pe

riod

Units

ass

igne

d du

ring

the

perio

dUn

its c

ance

lled

durin

gth

e pe

riod

Units

exe

rcis

ed d

urin

gth

e pe

riod

Number of

Units

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Units

exe

rcis

eddu

ring

the

perio

dUn

its in

circ

ulatio

n at

the e

nd of

the p

eriod

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Number of

Units

Number of

Units

Number of

Units

Number of

Units

Number of

Units

2015 S

tock

Grant

Units

acc

rued

dur

ing

the

perio

d (in

clus

ive o

f UA)

Weighted

average

price for

the period

Number of

Units

Optio

ns th

at m

ay b

e ex

erci

sed

at e

nd o

f th

e pe

riod

Weighted

average

price for

the period

Number of

Units

Time-based Units

555,000

0.95

-

-

-

-

-

-

-

-

555,000

0.95

-

-

-

-


555,000

0.95

-

-

-

-

-

-

-

-

555,000

0.95

-

-

-

-

Units

in ci

rcula

tion

at be

ginnin

g of t

he pe

riod

Units

ass

igne

d du

ring

the

perio

dUn

its c

ance

lled

durin

gth

e pe

riod

Units

exe

rcis

ed d

urin

gth

e pe

riod

Number of

Units

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Units

exe

rcis

eddu

ring

the

perio

dUn

its in

circ

ulatio

n at

the e

nd of

the p

eriod

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Number of

Units

Number of

Units

Number of

Units

Number of

Units

Number of

Units

2016 S

tock

Grant

Units

acc

rued

dur

ing

the

perio

d (in

clus

ive o

f UA)

Weighted

average

price for

the period

Number of

Units

Optio

ns th

at m

ay b

e ex

erci

sed

at e

nd o

f th

e pe

riod Weighted

average

price for

the period

Number of

Units

Time-based Units

479,375

1.70

-

-

-

-

-

-

90,003

1.70

389,372

1.70

360,027

1.70

198,147

1.70


551,252

1.70

-

-

-

-

-

-

-

-

551,252

1.70

-

-

-

-

Units

in ci

rcula

tion

at be

ginnin

g of t

he pe

riod

Units

ass

igne

d du

ring

the

perio

dUn

its c

ance

lled

durin

gth

e pe

riod

Units

exe

rcis

ed d

urin

gth

e pe

riod

Number of

Units

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Units

exe

rcis

eddu

ring

the

perio

dUn

its in

circ

ulatio

n at

the e

nd of

the p

eriod

Weighted

average

price for

the period

Weighted

average

price for

the period

Weighted

average

price for

the period

Number of

Units

Number of

Units

Number of

Units

Number of

Units

Number of

Units

2014 S

tock

Grant

Units

acc

rued

dur

ing

the

perio

d (in

clus

ive o

f UA)

Weighted

average

price for

the period

Number of

Units

Optio

ns th

at m

ay b

e ex

erci

sed

at e

nd o

f th

e pe

riod

Weighted

average

price for

the period

Number of

Units


Certification of the half-year condensed consolidated financial statementspursuant to Article 154-bis of Italian Legislative Decree No. 58 of

24 February 1998

55865_INT@97-100_Attestazione_EN_ok_impaginato 16/11/17 10:03 Pagina 97


| GEDI Gruppo Editoriale | 99

G

Certification of the half-yearly condensed consolidated financial statements pursuant to art. 154-bis of Italian Legislative Decree no. 58, of 24 February

1998. 1) The undersigned Monica Mondardini, Managing Director, and Gabriele

Acquistapace, Executive appointed to draw up the company accounting documents of GEDI Gruppo Editoriale S.p.A., certify, having considered the provisions of art. 154-bis, paragraphs 3 and 4 of Italian Legislative Decree No. 58 of February 24.

- the suitability of the same in relation to the characteristics of the company - the administrative and accounting procedures used in the preparation

of the half-yearly condensed consolidated financial statements, during the first half of 2017

2) It is also certified that:

2.1) the condensed half-yearly consolidated financial statements at 30 June 2017:

a) were prepared in accordance with International Financial Reporting Standards as adopted by the European Union pursuant to Regulation (EC) no. 1606/2002 of the European Parliament and Council dated 19 July 2002, and in particular IAS 34 – Interim Financial Reporting, as well as with the provisions issued in implementation of art. 9 of Italian Legislative Decree no. 38, of 28 February 2005:

b) correspond with the results of the accounting records and entries; c) fairly and correctly represent the equity, economic and financial

position of the Company and of the Group companies included in the consolidation;

2.2) the half-yearly report contains reference to significant events that took place in the first six months of the year and to their impact on the condensed half-yearly consolidated financial statements, together with the description of the main risks and uncertainties for the remaining six months of the year. The current half-yearly report also contains the information on the relevant Related-Party Transactions.

Monica Mondardini Gabriele Acquistapace



Independent Auditors’ Report on thehalf-year condensed consolidated financial statements

55865_INT@101-106_Relazione_EN_impaginato 16/11/17 09:59 Pagina 101


Independent Auditors’ Report | GEDI Gruppo Editoriale | 103


104 | GEDI Gruppo Editoriale | Independent Auditors’ Report

2




Hal

f Ye

ar F

inan

cial

Rep

ort

at J

une

30

, 2

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7

GED

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GEDI Gruppo EditorialeSocietà per azioni

Half Year Financial Report at June 30, 2017

55865_COP@1_x 13/11/17 17:51 Pagina 1

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Half Year Financial Report at 30 June, 2017 · GEDI Gruppo Editoriale Società per Azioni Half-year financial report at 30 June 2017 55865_INT@1-8_Indice_EN_x 16/11/17 10:07 Pagina