banca imi media day - rcs mediagroupbanca+imi… · banca imi media day london – february 22nd...

Banca IMI Media Day

London – February 22nd 2008

2

Disclaimer

This presentation contains management preliminary estimates and forward-looking statements, including information related to RCS MediaGroup projected financial performance and the expected development of the publishing industry, in particular in the newspaper, magazine, book and new media segments. These statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, as of this date, though by their nature future estimates are uncertain and subject to variations due to possible changes in the market. Actual results or experience could differ materially from the information contained herein.

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

Arianna Radice+39 02 25844023 [email protected]

Federica De Medici+39 02 25845508 [email protected]

3

Vision

IntegratedMultimedia and International

Publishing Group

4

Who we are

- RCS Positioning

- Market evolution

Strategic plan 2008-2010

2007 Preliminary Results

Agenda

5

RCS MediaGroup

The Italian multimedia company with the largest international presence,with activities mainly in Italy, France and Spain that operates

in newspapers, magazines, books, radio and new media.

Newspapers

Magazines

Books

Advertising

Broadcast

New MediaPartworks

6

RCS Positioning

Leader in National and Sport newspapers

2nd Free Press National Title

21% Market share

Second national newspapers17% Market share

2nd Player in terms of circulation

2nd Player in the fiction and non fiction market

13.5% Market share

Leader in the education market

17.2% Market share

2nd player in the partworks market

33.6% Market share

TV Channels Content Production

Note: market shares updated with latest available market data; Newspapers: circulation and readership

Leader in Sport and Financial newspapers

17% Market share

The leading international provider of web and mobile

community and entertainment services to over 7 mln people in 23 countries in the WorldRCS’ stake: 46.87%

RCS’ stake: 51%

3 National Radios

∼6 mln listeners

ITALY

SPAIN

ITALY ITALY

FRANCE

5.1% Market share

UK

ON LINE & MOBILE

ENT

WEB SITES

TV

2nd Information Web Site in Italy

1st Sport Information Web Site in Italy

1st Information Web Site in Europe and First Spanish language Web Site in the

world

DTT TVRCS’ stake: 55.4%

1st Sport Informatiion Web Site in Spain

ITALY

RCS’ stake: 34.6%

SPAIN

Sport National Radio

7

Market Evolution

…which implies a change in content offering…

Information market is experiencing a “platform evolution”…

…and requires media groups to quickly react

Technological revolution in telecommunications with increasing bandwidth availability

Continuous drop in paid newspapers sales

End of the analogical era and beginning of the digital one

Increased user mobility

Significant increase in content supply

Fractioning

Product segmentation and customization

Trivialization of content

Strong brands to become a trustworthy and quality reference for the end customer

Multiplatform distribution for higher versatility

8

“Corriere della Sera” Brand SystemNATIONAL NEWSPAPER

E-COMMERCE

(RCS Shopping, Hystorical Pages, Archive)

RADIO

(Radio Tg, Format, Talk Show)

MOBILE

(RCS Mobile, Corriere SMS, MMS, M Site)

IPTV MEDIACENTER

(Web TG, Video Chat)

THEMATIC AND VERTICAL CHANNELS (Women, House, Health, Travel)

ON LINE CLASSIFIED

ADD-ONS

(Books, DVDs, CD)

MAGAZINES

THEMATIC SUPPLEMENTS

LOCAL SUPPLEMENTS and

FREE PRESS

LOCAL EDITIONS

Multimedia entertainment and

communication system

9

E-COMMERCE

(Gazzatown, RCS Shopping)

“La Gazzetta dello Sport” Brand SystemNATIONAL NEWSPAPER

Local Editions

Local Supplements

Thematic Supplements

BOOKS, DVD, CD


LOCAL SUPPLEMENTS

LOCAL EDITIONS

NATIONAL NEWSPAPER

EVENTS AND EXHIBITIONS

RADIO

(Radio Tg, Format, Talk Show)

MOBILE

(RCS Mobile, Gazzetta SMS, MMS, M Site)

COMMUNITY, THEMATIC CHANNELS, GAMING (RCS Mobile, Gazzetta SMS,

MMS, M Site)

ON LINE



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“El Mundo” Brand System

NATIONAL NEWSPAPER

LOCAL EDITIONS

MADRID

LOCAL SUPPLEMENTS


MAGAZINES

ADD-ONS

(Books, DVDs, CDs)

CLASSIFIEDON LINE

COMMUNITY

E-COMMERCE

TV PRODUCTION

DTT TV

BOOKS



11

2007 E 2010 E

8

92

92

8

% on totalCore vs. New Media business

88

12

18

82

New MediaCore

New MediaCore

Revenues

Ebitda

2007 PRO-FORMA(1)

(1): Includes Recoletos Full Year

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2007 E 2010 E% on totalItaly vs Other countries

Revenues

Ebitda

SpainItaly

4841

65

8

5924

9

50 39

65

OthersFrance

SpainItaly

Others France


2007 PRO-FORMA(1)

8

5924

9

13

Who we are


- Strategic guidelines

- Main assumptions

- Economic targets

- Cash flow management

- Targets by Business Unit


Agenda

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Strategic Guidelines

Organic growth:Newspapers: proactive strengthening of market positions and brands, with focus on multimedia development

- Italy: Local editions, Full Color Gazzetta, Supplements, Classified On line, Free Press new products

- Spain: Marca relaunchMagazines portfolio optimization Digicast and Magazines: multimedia systems and multiplatform content developmentDigicast vertical channels and Magazines internationalizationBooks: focus on selected brandsDada: Social networking and User Generated Content enhancement

Organic growth:Newspapers: proactive strengthening of market positions and brands, with focus on multimedia development

- Italy: Local editions, Full Color Gazzetta, Supplements, Classified On line, Free Press new products

- Spain: Marca relaunchMagazines portfolio optimization Digicast and Magazines: multimedia systems and multiplatform content developmentDigicast vertical channels and Magazines internationalizationBooks: focus on selected brandsDada: Social networking and User Generated Content enhancement

15

External growth*Majority stake acquisitions:

- Multimedia systems in Italy- On line in Italy and Spain- Books catalogue strengthening

Evaluation of opportunities in:- Core countries- Spanish speaking countries and emerging markets

* Not quantified in the Plan

Strategic Guidelines

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Plan 2008-2010: Main Assumptions

Advertising 2,72,8

23,63,0

21,0

-5,0-1,5

Add-ons (Revenues)

-1,6-1,2

Newspapers ItalyNewspapers Spain

Paper Cost 0,53,0

Newspapers Italy*Magazines ItalyOn line ItalyNewspapers SpainOn line Spain

Circulation(copies)

Newspapers ItalyUnidad Editorial

% Market % RCSCAGR 07– 10

% RCS

4,55,0

35,05,0

25,5

-2,0-0,5

NewspapersMagazines

Labor Cost 4,0

* Includes Free Press

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Economic Targetsm €

Revenues

Operating costs

EBITDA

EBITDA %

EBIT

EBIT %

2.685

2.337

348

13,0%

274 (2)

10,2%

20063.284

2.830

454

13,8%

346

10,5%

2010E5.2%

4.9%

6.9%

6.0%

CAGR 06-10

+30%

2006 PRO-FORMA (1)

+22%


(2): 2006 EBIT does not includes Recoletos’ goodwill allocation and depreciation

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Δ = 106

454 Drivers

EBITDA Variance

Ebitdam €

2006 2010E

348

On line- Dada: community and social network

development in Italy and abroad - Italy: corriere.it and gazzetta.it growth- Spain: marca.es revamping

Digital TV- VEO- Digicast development

Newspapers- Full Color Gazzetta and El Mundo- Add-ons decrease

Unidad Editorial- Integration synergies

2006 PRO-FORMA (1)


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Cash Flow Management

Cumulated CAPEX 2007-2010 of approximately 390 millionInvestmentsInvestments

DividendsDividendsPlanned pay-out of more than 50% of consolidated net profit for each financial year

Financial investmentsFinancial

investments Minorities investments: no disposals planned

Cumulated Free cash flow 2007-2010 (before capex) of about 1 billion

Free Cash FlowFree Cash Flow

Net financial position

Net financial position Ratio NFP/EBITDA 2007E=2.6X; 2010E=1.6X

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Cumulated CAPEX

100%=390

Cumulated CAPEX, net capital employed and ROI

Net capital employed

ROI %

2006 2010

2010

2007 - 2010, m €

2.353 2.379

11,6%

14,5%

2006

m €

Technical

40%

Real Estate

11%

TVRights

10%

Other 3%

New Media

11%

ICT

25%

2006 PRO-FORMA (1)


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Targets by Business Units

Newspapers Italy

Newspapers Spain

Magazines

Books

New Media

16.5%

22.8%

10.5%

10,2%

18.1%

EBITDA Margin 2010E

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Who we are



Agenda

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Total Revenues 2,738.8 100% 2,380.7 100% 15.0%

EBITDA 360.3 13.2% 286.7 12.0% 25.7%

NFP (966.0) 5.7

Total Revenues 2,487.3 100% 2,380.7 100% 4.5%

EBITDA 300.5 12.1% 286.7 12.0% 4.8%

Δ% LfLFY07 FY06

FY07 FY06 Δ%


Million Euro

(1) Includes Recoletos and Digicast’s line-by-line consolidation starting from April, 1° 2007(2) 2006 results were restated taken into account the sale of RCS Broadcast, formed by the Play Radio division, and CNR Srl.(3) Includes 6.8 €/mln contribution for paper purchase cost

(3)

(1)

(2)

Excluding Recoletos

(1)

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BACK UP:2007 NINE MONTHS

RESULTS

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Total Revenues 1,973.9 100% 1,707.9 100% 15.6% 2,379.7 100%

EBITDA 218.5 11.1% 163.4 9.6% 33.7% 278.4 11.7%

EBIT 151.5 7.7% 127.9 7.5% 18.5% 213.0 9.0%

Net Profit 164.7 8.3% 124.7 7.3% 32.1% 219.5 9.2%

NFP (1,076.6) (62.5) 5.7

Total Revenues 1,810.4 100% 1,707.9 100% 6.0%

EBITDA 178.3 9.8% 163.4 9.6% 9.1%

FY 2006

Δ% LfL9M07 9M06

9M07 9M06 Δ%

2007 Nine Months Results - SummaryMillion Euro

(1) Includes Recoletos and Digicast’s line-by-line consolidation starting from April, 1° 2007(2) Includes 6.8 €/mln contribution for paper purchase cost

(2)(2)

(1) (2)

(2)

Excluding Recoletos

(1)

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Profit & Loss

9M07 9M06 Δ %

Circulation 1,081.2 54.8% 1,010.6 59.2% 7.0%Advertising 671.8 34.0% 554.1 32.4% 21.2%Other 220.9 11.2% 143.2 8.4% 54.3%TOTAL REVENUES 1,973.9 100.0% 1,707.9 100.0% 15.6%

Operating costs (1,369.7) (69.4%) (1,218.6) (71.4%) 12.4%Labour costs (372.0) (18.8%) (312.7) (18.3%) 19.0%Writedowns (10.0) (0.5%) (11.2) (0.7%) (10.7%)Provisions (3.8) (0.2%) (2.0) (0.1%) 90.0%EBITDA 218.5 11.1% 163.4 9.6% 33.7%D&A (67.0) (3.4%) (35.5) (2.1%) 88.7%EBIT 151.5 7.7% 127.9 7.5% 18.5%

Net financial incomes (charges) (22.5) (1.1%) 5.6 0.3% >100%Income (charges) from investments 62.0 3.1% 39.7 2.3% 56.2%PRE-TAX PROFIT 191.1 9.7% 173.2 10.1% 10.3%Taxes (20.2) (1.0%) (33.0) (1.9%) (38.8%)Net Profit from Discontinued Operations 6.6 0.3% (6.8) (0.4%) (197.1%)Minorities (12.9) (0.7%) (8.7) (0.5%) 48.3%NET PROFIT 164.7 8.3% 124.7 7.3% 32.1%

Million Euro

(1) Includes Recoletos and Digicast’s line-by-line consolidation starting from April, 1° 2007(2) Reclassified discontinuing RCS Broadcast. (3) Includes 6.8 €/mln contribution for paper purchase cost.

(1) (2)

(3)

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Revenues & EBITDA Breakdown by BU

9M07 9M06Revenues EBITDA ROS% Revenues EBITDA ROS%

Newspapers Italy 546.1 84.0 15.4% 546.5 94.4 17.3%Newspapers Spain 433.3 80.5 18.6% 235.8 31.4 13.3%

Magazines 236.8 10.0 4.2% 240.4 9.6 4.0%

Advertising 447.6 5.2 1.2% 425.2 4.9 1.2%

Books 537.4 28.3 5.3% 509.8 29.0 5.7%

Dada 115.1 15.2 13.2% 80.1 10.3 12.9%

Digicast 14.3 4.5 31.5%

Corporate Activities 48.5 (9.2) ns 51.1 (16.3) ns

Others and eliminations (405.1) ns (381.0) nsTOTAL 1,973.9 218.5 11.1% 1,707.9 163.4 9.6%

Million Euro

(1) Includes Recoletos and Digicast’s line-by-line consolidation starting from April, 1° 2007(2) Includes 6.8 €/mln contribution for paper purchase cost

(1)

(2)(2)

28

31.12.2006

Net fixed assets 2,499.5 103% 1,250.0 101%

Tangible & Intangible fixed assets 2,176.5 90% 852.8 69%

Financial fixed assets 323.0 13% 397.2 32%

Net working capital 276.2 11% 233.0 19%

Provision for risks and charges (258.4) (11%) (144.6) (12%)

Employee termination indemnity (99.6) (4%) (104.1) (8%)

CAPITAL EMPLOYED 2,417.7 100% 1,234.3 100%

Net financial debt (cash) 1,076.6 44% (5.7) (1%)

Equity 1,341.0 55% 1,240.1 100%

EQUITY & NFD 2,417.7 100% 1,234.3 100%

30.09.2007

Balance SheetMillion Euro

(1) Includes Recoletos and Digicast starting from April, 1° 2007

(1)

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YoY

Circulation 179.5 33% 180.9 33% (0.8%) 228.2 31%Advertising 233.6 43% 221.8 41% 5.3% 311.0 42%Add-ons 112.4 21% 126.2 23% (10.9%) 178.8 24%Other 20.6 4% 17.6 3% 17.0% 19.7 3%

TOTAL REVENUES 546.1 100% 546.5 100% (0.1%) 737.7 100%

EBITDA 84.0 15.4% 94.4 17.3% (11.0%) 128.3 17.4%

9M07 9M06 FY 2006

Newspapers Italy – P&L

Circ. 647.000 avg. daily copies

Read. 2.615.000 per day


Read. 3.592.000 per day ADS, Audipress and Eurisko

Million Euro


Read. 1.733.000 per day

(1)

(1) Includes 3.6 €/mln contribution for paper purchase cost

(1)

322 mln page views8.8 mln unique users

237.5 mln page views5.7 mln unique users

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YoYCirculation 196.6 45% 120.4 51% 169.7 50%

UNEDISA 129.2 120.4 7.3%RECOLETOS 67.4

Advertising 192.2 44% 99.1 42% 147.1 43%UNEDISA 121.6 99.1 22.7%

RECOLETOS 70.6Other 44.5 10% 16.3 7% 24.8 7%

UNEDISA 19.0 16.3 16.6%RECOLETOS 25.5

UNEDISA 269.8 235.8 14.4% 341.6RECOLETOS 163.5

TOTAL REVENUES 433.3 100% 235.8 100% 341.6 100%

UNEDISA 40.3 14.9% 31.4 13.3% 28.3% 60.9 17.8%RECOLETOS 40.2 24.6%

TOTAL EBITDA 80.5 18.6% 31.4 13.3% 60.9 17.8%

9M07 9M06 FY 2006

Circ. 332.00 avg. daily copiesRead. 1.400.000 per day

Newspapers Spain - P&L

OJD, Infoadex

Million Euro – Recoletos consolidated starting from April 1° 2007

Circ. 330.000 avg. daily copiesRead. 2.300.000 per day

Circ. 50.000 avg. daily copiesRead. 200.000 per day

(1) Of which add-ons revenues 48.1 mln at September, 30 2007 and 41.1 mln at September, 30 2006

311.6 mln page views10 mln unique users

408.6 mln page views6.3 mln unique users

(1)

31

YoY

Circulation 96.0 41% 106.8 44% (10.1%) 136.1 41%Advertising 117.9 50% 111.8 47% 5.5% 167.9 50%Other 22.9 10% 21.8 9% 5.0% 31.0 9%

TOTAL REVENUES 236.8 100% 240.4 100% (1.5%) 335.0 100%

EBITDA 10 4.2% 9.6 4.0% 4.2% 26.3 7.9%

9M07 9M06 FY 2006

Magazines - P&L

(100%)

9 9 weeklyweekly magazinesmagazines21 21 monthlymonthly magazinesmagazines

(100%)

Million Euro

(100%) (100%)

(1)(1)


32

YoY

Adv. House 413.0 92% 392.5 92% 5.2% 562.4 92%

International Adv. 34.2 8% 32.3 8% 5.9% 45.7 8%

CNR 0.4 0.4

TOTAL REVENUES 447.6 100% 425.2 100% 5.3% 608.1 100%

EBITDA 5.2 1.2% 4.9 1.2% 6.1% 8.5 1.4%

9M07 9M06 FY 2006

Advertising - P&L

Million Euro

33

YoY

Fiction & non-Fic. Italy 120.6 22% 95.8 19% 25.9% 137.7 19%Education 80.0 15% 79.5 16% 0.6% 99.4 14%Flammarion 136.2 25% 150.3 29% (9.4%) 226.9 31%Partworks 186.8 35% 169.6 33% 10.1% 234.6 33%Rizzoli Int. Publications 13.5 3% 13.9 3% (2.9%) 21.9 3%Other 0.3 0% 0.7 0% ns 0.9 0%

TOTAL REVENUES 537.4 100% 509.8 100% 5.4% 721.4 100%

EBITDA 28.3 5.3% 29.0 5.7% (2.4%) 64.2 8.9%

9M07 9M06 FY 2006

Books - P&L

Million Euro

(2)(2)

(1) Starting from April 2007 third parties distribution revenues have been reclassified in reduction of books purchase costs. Net of this reclassification, Flammarion presents a YoY growth of 8.3%.


(1)

34

April - September 07 April - September 06 YoY

Subscriptions 12.3 86% 10.7 86% 15.0%

Advertising 2.0 14% 1.4 11% 42.9%

Other 0% 0.4 13% ns

TOTAL REVENUES 14.3 100% 12.5 100% 14.4%

EBITDA 4.5 31.5% 3.1 24.8% 45.2%

Digicast TV Activities - P&L

Million Euro

(1) Consolidated starting from April, 1° 2007

(1)

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