Italian Investor Conference - RCS MediaGroup · 2013. 12. 23. · partners De Agostini, Hachette JCDecaux De Agostini Distribution to newsstands 10 monthly titles in special segment:

New York, April 2005

Italian Investor Conference

1

Disclaimer

Statements contained in this document, particularly the ones regarding any RCS MediaGroup possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties.

RCS MediaGroup actual results and developments may differ materially from the ones expressed or implied by the following statements depending on a variety of factors.Any reference to past performance of RCS MediaGroup shall not be taken as an indication of future performance.

This communication does not constitute an offer or solicitation for the sale, purchase or acquisition of securities of any of the companies mentioned in any jurisdiction and is directed to professionals of the financial community.

For further information, please contact our Investor Relations Department

Federica De Medici +39 02 25845508 [email protected]

2

Meeting agenda

• Who we are

• 2004 Financial Results

• Plan 05-07

3

RCS MediaGroup - Who we are The Leading Italian Publishing GroupThe Leading Italian Publishing Group

Traditional Press Free Press

NEWSPAPERS

7 weekly and 23 monthly (including 10 in JV)MAGAZINES

BOOKS

BROADCAST

ADVERTISING

INTERNET/TV

Fiction and non fiction / Educational

Fiction and non fiction

Partworks

National Radio Syndication Press Agency

Adv house Outdoor adv Adv on foreign mediaIGPIGPDECAUXDECAUX

MEDIA SECTOR COUNTRY

Web sites DTT TV licenceTV content prod.

TITLES / PRODUCTS

(JV)

(JV)DISTRIBUTION

4

Group Structure

GrupoGrupo UnedisaUnedisa

100% 100% 99,99% 98,99% 100% 45%

95% 100%

DARPDARP

50%

100% 51%

34,5%

IGPIGPDECAUXDECAUX

(2)(1)

(3)

(1) Joint-venture RCS (50%), De Agostini (50%)Starting from 2004 FY the JVs areconsolidated with Equity method

(2) Joint-venture RCS (34,5%), JCDecaux (32,3%), Publitransport (33,2%)(3) Joint-venture RCS (45%), De Agostini (45%), Hachette (10%)

5

Newspapers

ITALY market share 20%20% SPAIN market share 7%7%

Traditional Press

Circ. 678.000 avg. daily copies

Read. 2.899.000 per day

1 copies and readership



Free Press

11°° NationalNational

NewspaperNewspaper

11°°SportSport

NewspaperNewspaper

22°°NationalNational

TitleTitle

Traditional Press22°° NationalNational

NewspaperNewspaper

1 1

Circ. 308.000 avg. daily copiesRead. 1.314.000 per day

Read. 750.000 per day

Source: Market shares are updated with latest available market data

6

Corriere della Sera – Brand Extension

MAGAZINES / SUPPLEMENTS

ADD-ONS

WOMEN:WOMEN: CIRC. 521,000521,000 avg. copies

MAGAZINE:MAGAZINE: CIRC. 647,000647,000 avg. copies

ENCYCLOPAEDIAENCYCLOPAEDIA

HISTORY BOOKSHISTORY BOOKS

ART BOOKS ART BOOKS

COOK BOOKSCOOK BOOKS

ECONOMYECONOMYCorriere Economia

REAL ESTATEREAL ESTATETrovo Casa

LEISURE/ENTERT.LEISURE/ENTERT.Vivi Milano/Roma

RECRUITMENTRECRUITMENTCorriere Lavoro

HEALTHHEALTHCorriere Salute

7

Gazzetta dello Sport – Brand Extension


ADD-ONSMAGAZINEMAGAZINE

399,000 avg. copies

FIGURINE PANINIFIGURINE PANINIFootball Players

Stickers Collection

TOUR OF TOUR OF ITALYITALY

(cycling)(cycling)

MARATHONMARATHONBEACH BEACH

VOLLEYVOLLEY

SNOWBOARDSNOWBOARD

EVENTSDVDsDVDs/BOOK/BOOKFootball Team

DVDsDVDs/VHS /VHS SeriesSeriesWorld wide sport key

events

8

El Mundo – Brand Extension


ADD-ONS

GRAN ENCICLOPEDIA UNIVERSALGRAN ENCICLOPEDIA UNIVERSAL

ECONOMYECONOMY

AUTOMOTIVEAUTOMOTIVE

RECRUITMENTRECRUITMENT

HEALTHHEALTH

HISTORY BOOKSHISTORY BOOKSMAGAZINEMAGAZINE

9

On line: main web sites

3,13,1 mn monthly unique users;105105 mn monthly pageviews

22°° InfoInfoWeb SiteWeb Site

InfoInfoWeb Site in EuropeWeb Site in Europe

Spanish language Spanish language site in the worldsite in the world

5,4 mn monthly unique users;204 mn monthly pageviews

2 mn monthly unique users;51 mn monthly pageviews

11°° Sport Sport Web SiteWeb Site

11°°

11°°Source: Market shares are updated with latest available market data

10

Magazines

ITALY market share 21%21%2nd player with strong titles in the following sectors2nd player with strong titles in the following sectors

1

Women Family Infancy Home furnishings Business

WeeklyCirc. 521,000

WeeklyCirc. 261,000

MonthlyCirc. 202,000

WeeklyCirc. 675,000

MonthlyCirc.223,000



WeeklyCirc. 91,000

1 copies

WeeklyCirc. 171,000

WeeklyCirc. 163,000

MonthlyCirc.101,000

MonthlyCirc.122,000


11

Books

ITALY market share 14%14%

EDUCATION FICTION ANDNON-FICTION

11°° PublisherPublisher

FRANCE market share 4%4% ITALY, FRANCE & UK

FICTION ANDNON-FICTION

PARTWORKS

20% 20% Market Market shareshare

44°° PublisherPublisher 11°° PlayerPlayerIn In ItalyItaly

22°° PublisherPublisher

2424Bestsellers Bestsellers

RCS RCS in top 100 in top 100 sellers listsellers list

DISTRIBUTION

UD UD -- Union Union Distribution Distribution

35%35%Market Market

share in share in ItalyItaly


12

Broadcast

11°°SyndicationSyndication

7,3 7,3 mnmn combined listeners between broadcast station and syndicationcombined listeners between broadcast station and syndication

NATIONALCOMMERCIAL RADIO

1,3 mn daily listeners ~ 6 mn daily listeners of news & adv services

PRESS AGENCY

News services production for own &

third parties

ITALY

SYNDICATION OF LOCAL RADIOS


13

Advertising

Leader of press advertisingLeader of press advertisingITALY

FOREIGN MEDIA ADV

PRESS ADVERTISING

Sales for Group and third parties titles

Advertising broker for foreign media in Italy

and italian media abroad18% 18% Market Market shareshare

11°°PlayerPlayer


14

Joint Ventures and other activities

DISTRIBUTION MAGAZINESOUTDOOR

ADVERTISING

Street furniture, billboard, transport advertising, airport

advertising

45% 45%

DARP DARP IGPIGPDECAUXDECAUX

% % ownown 34,5% 34,5% 50% 50%

JCDecauxpartnerspartners De Agostini, Hachette De Agostini

Distribution to newsstands

10 monthly titles in special segment: lifestyle,

yachting, classical music, archaeology

15

Meeting agenda

• Who we are


• Plan 05-07

16

Consolidation area

2004 Annual Report reflects changes in consolidation area for joint-venture companies (from Proportional method to Equity method) in line with IAS principles

At revenues and EBIT level, m-Dis, IGP-Decaux and Darp will no longer be included in consolidation area

All 2003 consolidated and Business Unit results will be presented pro-forma

17

2004 Full Year Results - SummaryMillion Euro

2004 2003 1 YoY

TOTAL REVENUES 2.150,5 1.945,0 10,6%

EBITDA 211,1 143,8 46,8%% margin 9,8% 7,4%

EBIT 135,3 77,4 74,8%

% margin 6,3% 4,0%

NET PROFIT 77,4 46,1 67,9%% margin 3,6% 2,4%

NFP (167,8) (220,8)

Dividends 2 - Ord. €0,04 + 1/100 share € 0,07 - Sav. €0,06 + 1/100 share € 0,09

1 Pro-forma, 2 Subject to AGM approval

18

Profit & Loss (1/2)Million Euro

YoY

Circulation 1.370,5 63,7% 1.199,5 61,7% 14,3%Advertising 688,5 32,0% 666,7 34,3% 3,3%Other 91,5 4,3% 78,8 4,1% 16,1%

TOTAL REVENUES 2.150,5 100,0% 1.945,0 100,0% 10,6%

Cost of goods sold (1.531,8) -71,2% (1.407,0) -72,3%

Labour costs (385,8) -17,9% (370,4) -19,0%

Provisions (21,8) -1,0% (23,8) -1,2%

( ) ( )

EBITDA 211,1 9,8% 143,8 7,4% 46,8%

D&A of which: (75,8) -3,5% (66,4) -3,4%

- Goodwill Amortisation (38,1) (27,4)

EBIT 135,3 6,3% 77,4 4,0% 74,8%

2004 2003 1

1 Pro-forma

19

Profit & Loss (2/2)Million Euro

YoY

EBIT 135,3 6,3% 77,4 4,0% 74,8%

Net financial incomes (Charges) (4,9) -0,2% (8,7) -0,4%

Incomes (Charges) from equity invest. and adj to value of financial assets 9,3 0,4% 52,9 2,7%

Net extraord. Income (charges) (34,7) -1,6% (47,7) -2,5%

PRE-TAX PROFIT 105,0 4,9% 73,9 3,8% 42,1%

Taxes (21,9) -1,0% (19,5) -1,0%

Tax rate 20,9% 26,4%

Minorities (5,7) -0,3% (8,3) -0,4%

NET PROFIT 77,4 3,6% 46,1 2,4% 67,9%

2004 2003 1

1 Pro-forma

20

Revenues Breakdown by BUMillion Euro

1.945,0

2.150,5

627,2

257,5 284,2

631,3

518

23,4

716,5

311,4272,6

704,4

548,8

26,4

NewspNewsp. It.. It.

Unedisa

Unedisa

Magazines

Magazines

BooksBooks

Advertising

Advertising 11

Broadcast

Broadcast

+10,6%

+20,9%

-4,1%

+10,5%

+5,9%

+12,8%

+14,2%

Consolidated Revenues … … by Business UnitYoY growth

2004 FY

2003 FY Pro-forma

1 Includes RCS Pubblicità (group advertising house), Blei (advertising broker for foreign media), RCS Dada Advertising (Internet advertising broker)

21

EBITDA Breakdown by BUMillion Euro

YoY growth

2004 FY EBITDA Consolidated …(EBITDA margin)

… by Business Unit 2003 FY Pro-forma

7,4%

143,8

9,8%

211,1 13,0%81,6

9,6%24,8

8,4%23,8

7,5%47,6

0,8%4,3

5,6%1,3

9,5%25,9

16,5%51,5

14,1%100,8

7,3%51,5

1,2%6,8 4,5%

1,2

NewspNewsp. It.. It.

Unedisa

Unedisa

Magazines

Magazines

BooksBooks

Broadcast

Broadcast

Advertising

Advertising 11

1 Includes RCS Pubblicità (group advertising house), Blei (advertising broker for foreign media), RCS Dada Advertising (Internet advertising broker)

22

2004 CAPEX, net capital employed and ROIMillion Euro

Net capital employed (1)

CAPEX 2004

100%=120,1

664,4 767,2

ROI (2)

2003Pro-forma

2004

2003Pro-forma

2004

Full Colour ItalyICT

Broadcastfrequencies

67%

1%

18%

Facilities14%

17,6%

11,6%

(1)(2)

Capital employed net of financial shareholdingsEBIT on capital employed net of financial shareholdings

23

Cash flow StatementMillion Euro

Net Financial Position 31/12/2003 pro-forma (220,8)EBIT 135,3 D&A 75,8 Financial charges (4,9)Taxes (21,9) ∆ NWC 93,0 ∆ Funds (46,8) Free Cash Flow 230,5 CAPEX (120,1) Cash Flow (including CAPEX) 110,4 Dividends (55,0) Cashed-in dividends 16,8 Equity investments (130,8) Equity disposals 172,8 Other (61,2) Cash Flow 53,0

Net Financial Position 31/12/2004 (167,8)

24

Balance SheetMillion Euro

31.12.2003 pro-forma

Net fixed assets 1.134,0 92% 1.127,3 88%

Tangible & Intangible fixed assets 661,9 53% 514,5 40%

Financial fixed assets 472,1 38% 612,8 48%

Net working capital 348,3 28% 441,4 35%

Reserve for risks and charges (140,2) (11%) (187,0) (15%)

Employee termination indemnity (102,8) (8%) (104,5) (8%)

CAPITAL EMPLOYED 1.239,3 100% 1.277,2 100%

Net financial debt 167,8 13% 220,8 17%

Equity 1.071,5 86% 1.056,4 83%

EQUITY & NFD 1.239,3 100% 1.277,2 100%

31.12.2004

25

Meeting agenda

• Who we are


• Plan 05-07

26

Group vision

The leading integrated publisher, able to develop and manage content, achieving commercial synergies in all

available current and future media

27

Summary of expected market trends 2004-07

2,5%2,5% CAGR of press vs 5,7%5,7% total marketITALIAN MEDIA MARKET

SPANISH ADVERTISING

BOOKS ITALY & FRANCE

PARTWORKS Slight market decline ( -- 1%1% per year) due to saturation of magazines and newspapers add-ons in Italy

4,3%4,3% total market, with newspapers at 3,2%3,2%, magazine 1,8%1,8% and radio 7,7%

ADVERTISING7,7%

Continuing decline of paid dailies newspapers, with copies loss more than compensated by free press. Magazines flat Contribution from add-ons declining from 2004 peak

CIRCULATION

6,4%6,4% total market, with newspapers at 4,5%4,5%, magazine 5,0%5,0% and radio 5,1%5,1%

Expected 2%2% grow per year for Fiction and Non fiction both in Italy and France; 1%1% for Education Italy

28

Strategic guidelines: business portfolio

Non Core Value management :Profitability improvement and monitoring of market evolution

Core: Investment and profitability improvement

Evolution monitoring

Marketattractiveness

High

Low

Low

Medium High

Radio

Magazines

Partworks

Exploitation potential for RCS

German Magazines

Books

Daily Newspapers

Outdoor adv.

TV

MediumInternet

Free Press

: Sold in early 2005

29

Strategic guidelines: directions for growth

- Acquisition of “related businesses” in countries of RCS presence Italy, France and Spain

- Strengthening of business portfolio if desirable through asset swaps

- Development in audio/video if and when available

- Improvement of profitability: increase in market share and reduction in costs

- Strengthening of product portfolio

- Brand exploitation

- Streamlining of corporate structure and organizational model

Organic growth

External growth

1

2

30

Three year plan main assumptions

Market RCS

CAGR 04 – 07

AdvertisingDaily Newspapers ItalyMagazines ItalyDaily Newspapers Spain

Circulation

3 - 3,5%2 - 2,5%4,5 - 5%

3 - 3,5%3 - 3,5%*6 - 6,5%

+10 cents during the three yearsSteady

~ (7)%~ (11)%

~ 3,5%

~ 3,5%

PricesDaily NewspapersMagazines

Add-ons (Revenues)Daily Newspapers ItalyUnedisa

Paper cost

Labor cost

Generally steady

* New projects not included

31

Economic targets (consolidated)

2004 F 2007 E CAGR 04-07

2.315 2.670

215 345

9,3% 12,9%

5%

17%

2.100 2.325 3,5%

135 250

5,8% 9,4%

23%

more than 50%

+ 85%

In three years

EBITDA

EBITDA %

Operating costs

EBIT

Million Euro, JV consolidated with Proportional method

Figures as approved on December by BoDJVs consolidated with Proportional methodRevenues

EBIT %

32

Economic targets (consolidated)Million Euro, JV consolidated with Equity method

2004 A 2007 E CAGR 04-07

2.151 2.360

211 325

9,8% 13,8%

3%

15,5%

1.940 2.035 1,6%

135 237

6,3% 10,0%

20,5%

more than 50%

In three years

EBITDA

EBITDA %

Operating costs

EBIT

JVs consolidated with Equity method

+ 75%

Revenues

EBIT %

33

EBITDA varianceMillion Euro, JV consolidated with Equity method

∆ = 114

211

325

EBITDA 2004 A

EBITDA 2007 E

Efficiencies net of labor cost increase

20-25%

Advertising increase net of paper cost increment

35-40%

Market growth and increase of market share by volume

20-25%

New Projects net of start-up investments

15-20%

Price increase net of add-on decrease

0%

-

-

-

-

-

Drivers

34

Cumulated CAPEX, net capital employed and ROIMillion Euro, JV consolidated with Equity method

Net capital employed (1)

Cumulated CAPEX 2005-2007 per BU

100%=300

Daily Newspapers Italy

Daily newspapers Spain

Magazines Italy 2%

ICT & facilities

Broadcast

Books

40%

26%

8%

18%

ROI (2)

2004 A 2007 E

2004 A 2007 E

6%

767 793

17,6%

29,9%

Capital employed net of financial shareholdingsEBIT on capital employed net of financial shareholdings

(1)(2)

35

Cash flow management

- Cumulated technical investments of approximately €300 million (€170 million for full-colour in Italy and Spain)

- Regular pay-out for each financial year

- Cumulated Free Cash Flow (before CAPEX) of about € 650 millionFree Cash Flow

Investments

Dividends

- Shareholdings in Banca Intesa, Pirelli & C. and others not strategic: to be gradually disposed of, in compliance with the existing commitments, in order to finance growth opportunities and optimize capital structure

Shareholding

36

BU target summaryMillion Euro, JV consolidated with Equity method

2004 A 2007 E

EBITDA margin

Daily newspapers Italy

Unedisa

Magazines Italy

Advertising

Broadcast

Consolidated Total

Books

14,1%19,3%

16,5%19%

9,5%11,2%

10,3%

1,2%1,0%

4,5%

23,2%

9,8%

7,3%

13,8%

37

Summary

From “group of publishing companies” to “integrated publisher”

Improvement of profitability, implementation of initiatives in “core” businesses and value management of other activities

Growth by acquisition with priority in Spain, France and Italy. Evaluation of growth in other countries on a case by case basis

Targets: EBITDA + 50%EBIT + 75%Regular dividend pay out

38

• Back-up slides

− 2004 P&L by Business Units

− 2004 P&L and BS of Parent Company

− Shareholders Structure

39

Newspapers Italy – P&L

YoY

Circulation/Other 239,8 33% 249,7 40% (4,0%)Advertising 277,7 39% 266,7 43% 4,1%Add-ons 199,0 28% 110,8 18% 79,6%

TOTAL REVENUES 716,5 100% 627,2 100% 14,2%

EBITDA 100,8 14,1% 81,6 13,0% 23,5%

2004 2003 1




Read. 3.359.000 per day ADS, Audipress and EuriskoRead. 747.000 per day

Million Euro

1 Pro-forma

40

Unedisa - P&L

Euro mn YoY

Circulation/Other 114,4 37% 106,5 41% 7,4%Advertising 109,2 35% 100,5 39% 8,7%Add-ons 87,8 28% 50,5 20% 73,9%

TOTAL REVENUES 311,4 100% 257,5 100% 20,9%

EBITDA 51,5 16,5% 24,8 9,6% 107,7%

2004 2003 1

Circ. 308.000 avg. daily copiesRead. 1.314.000 per day OJD, Infoadex

Million Euro

1 Pro-forma

41

Magazines - P&L

(100%)

7 7 weeklyweekly13 13 monthlymonthly

(100%)

Million Euro

YoY

Circulation 116,5 43% 122,0 43% (4,5%)Advertising 140,8 52% 146,9 52% (4,2%)Other 15,3 6% 15,3 5% 0,0%

TOTAL REVENUES 272,6 100% 284,2 100% (4,1%)

EBITDA 25,9 9,5% 23,8 8,4% 8,8%

2004 2003 1

1 Pro-forma

42

Advertising - P&L

Rcs Dada Advertising Rcs Dada Advertising (51%) 2 (51%)

Million Euro

YoY

Adv. House 507,8 93% 489,6 95% 3,7%

International Adv. 36,3 7% 26,9 5% 34,9%

Web Adv. 4,7 1% 1,5 0% >100%

TOTAL REVENUES 548,8 100% 518,0 100% 5,9%

EBITDA 6,8 1,2% 4,3 0,8% 58,1%

2004 2003 1

1 Pro-forma2 Starting from Jan 2005: 100% owned and will be merged in RCS Pubblicità

43

Books - P&L

Million Euro

YoY

Fiction & non-Fic. Italy 123,1 17% 108,3 17% 13,7%Education 94,1 13% 92,3 15% 2,0%Flammarion 229,9 33% 226,1 36% 1,7%Partworks 228,9 32% 189,7 30% 20,7%

Other 2 28,4 4% 14,9 2% 90,6%

TOTAL REVENUES 704,4 100% 631,3 100% 11,6%

EBITDA 51,5 7,3% 47,6 7,5% 8,2%

2004 2003 1

1 Pro-forma2 Includes Rizzoli International Publications

44

Broadcast - P&L

RIN Radio Italia NetworkRIN Radio Italia Network SyndicationSyndication of of LocalLocal RadioRadio Press Press AgencyAgency

Million Euro

YoY

Advertising 22,7 86% 20,0 85% 13,5%

Broadcasting 2 2,9 11% 2,1 9% 38,1%Others 0,8 3% 1,3 6% (38,5%)

TOTAL REVENUES 26,4 100% 23,4 100% 12,8%

EBITDA 1,2 4,5% 1,3 5,6% (7,7%)

2004 2003 1

1 Pro-forma2 Includes AGR press services

45

Main Joint-VenturesMillion Euro, legal entities data, 100%

IGPIGPDECAUXDECAUX

JV (RCS - JCDecaux - Publitrasport)JV (RCS - DeA - Hachette-Rusconi)

Revenues

Net profit (loss)

2003restated

20032004 2004

101,8 154,1183,0 169,1

9,7 4,74,1 2,8

46

RCS MediaGroup S.p.A. - P&LMillion Euro

YoY

Dividends 58,0 65,3% 61,5 65,6% (3,6)

Net financial income (charges) 3,1 3,5% 10,4 11,1% (7,3)

Revenues from sales and services 27,7 31,2% 21,9 23,3% 5,8

TOTAL REVENUES 88,8 100,0% 93,8 100,0% (5,1)

Dep., Am. & write down (2,5) (2,8%) (0,4) (0,4%) (2,1)

Operating costs (43,4) (48,9%) (42,0) (44,8%) (1,4)

Adjustments to value of fin. assets (14,3) n.s. 30,8 n.s. (45,1)

Net extraord. income (charges) (6,4) (7,2%) (27,4) (29,2%) 21,0

PRE-TAX PROFIT 22,2 25,0% 54,8 58,4% (32,6)

Taxes 36,0 40,5% (3,3) (3,5%) 39,3

NET PROFIT 58,2 65,5% 51,5 54,9% 6,6

2004 2003

1

1 Includes tax-credit for 19,6 mln Euro

47

RCS MediaGroup S.p.A. – Balance Sheet

Million Euro

Total Fixed Assets 938,9 92,6% 934,7 95,4%

Net Working Capital 96,2 9,5% 94,2 9,6%

Reserve for risks and charges (19,1) (1,9%) (44,7) (4,6%)

Employee Termination Idemnity (2,4) (0,2%) (4,0) (0,4%)

NET CAPITAL EMPLOYED 1.013,5 100,0% 980,2 100,0%

Net Financial Debt (115,3) (11,4%) (145,4) (14,8%)

Equity 1.128,9 111,4% 1.125,6 114,8%

EQUITY & NFD 1.013,5 100,0% 980,2 100,0%

31.12.200331.12.2004

48

Shareholders’ Structure

Shareholders Pact *57,476%

Own Shares

3,655%Significant Shareholders

7,031%

Free Float

31,838%

* Held by 15 Shareholders

Expiry date: July 2007

Pre-emption right: 18 months

13,13%10,19%7,00%5,00%3,56%3,00%2,91%2,91%2,00%1,88%1,50%1,23%1,18%1,00%1,00%57,48%

EdisonGeminaTotale

Sinpar (Lucchini)Merloni InvestMittel Er.Fin. (Bertazzoni)

Dorint Holding (Della Valle)Pirelli & C.Banca IntesaCapitalia

Fondiaria SAIGenerali Ass. Vie

Mediobanca Fiat PartecipazioniGruppo Italmobiliare

COMPANY % on ord. share

Tot. Ordinary Shares: 732.669.457Tot. Savings Shares: 29.349.593

Documents

Italian Investor Conference - RCS MediaGroup · 2013. 12. 23. · partners De Agostini, Hachette JCDecaux De Agostini Distribution to newsstands 10 monthly titles in special segment: