Press releases

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the Interim Management Statement at 31 March 2025 presented by Chief Executive Officer Antonio Porro.

“The economic and financial figures achieved by our Group during the first quarter of the year are in line with our forecasts: they reflect the overall weakness that characterised the book market in the first quarter, and which we estimate will continue throughout the first half of the year. During the course of the year, we expect to see a recovery in the market environment and a positive effect on the Group’s performance as a result of the increased richness of the publishing offerings of our publishing houses. This allows us to confirm the targets set for 2025”, said Antonio Porro, Chief Executive Officer and General Manager of the Mondadori Group.

In the first quarter of 2025, consolidated revenue totalled € 164.4 million, down 1% versus € 166.1 million in the first quarter of 2024.

Adjusted EBITDA was € 1.8 million, down from € 4.8 million in the same period of 2024, due to the performance of the Trade Books segment.

The Group’s reported EBITDA amounted to € 1.3 million, showing a decrease of € 4.4 million compared to the first quarter of 2024, which had benefited, in addition to the dynamics of the management components, from lower restructuring costs and the release of some provisions for risks in the Media area, allocated against contingent liabilities that did not materialise.

EBIT for the first three months of 2025 was negative by € 13.9 million, a decrease of € 5.2 million compared to the first quarter of 2024, which is attributable, in addition to what has already been described, to the higher depreciation and amortisation recognised in the period under review for a total of € 0.8 million, concentrated in particular in the Trade Books area. Neutralising the extraordinary items and the amortisation deriving from the allocation of the price for the companies acquired (Purchase Price Allocation), Adjusted EBIT would stand at € -11.4 million, compared with the € -7.7 million of the same period of the previous year.

The consolidated pre-tax result was a loss of € -16.4 million, down by approximately € 6 million compared to a loss of € -10.2 million as of 31 March 2024, due to the additional effect of the lower contribution (by about € 0.5 million) of the result of the associate companies and higher financial expenses, which increased by a total of € 0.6 million, mainly due to higher bank interest on the financing lines, as a result of the higher cost of debt and higher average debt as well as the increase in IFRS 16 debt.

The Group’s net profit at 31 March 2025, after minority interests, was a loss of € 13 million, down by about € 6 million compared to a loss of € -7.1 million in the first quarter of 2024, despite a lower share of the result attributable to minority interests resulting from the acquisitions of minority interests completed in the current year (the remaining 25% of the share capital of ALI as well as a further 24.5% stake in Edizioni Star Comics).

Tax income for the first quarter of the financial year 2025 was a positive € 3.5 million, compared to € 4.1 million as at 31 March 2024, despite a lower pre-tax result: this figure is the result of a different tax treatment of the contributions recognised to the Media area.

The adjusted net result after neutralising all non-recurring items, would be € -11.2 million, compared to € -6.4 million in the first quarter of the previous year.

The Net Financial Position gross of IFRS 16 as at 31 March 2025, stood at € -134.1 million (net debt), essentially stable compared with the € -133.3 million at 31 March 2024; The strong cash generation of the business enabled the financing of the acquisitions of Chelsea Green Publishing and Fatto in casa da Benedetta, as well as the increased remuneration of shareholders, without significantly raising the Group’s financial exposure.

Net Financial Position gross of IFRS 16 at 31 March 2025 stood at € -212.8 million (net debt), up by approximately € 7 million from € -205.5 million at 31 March 2024, due to a larger IFRS 16 debt component of approximately € 6 million as a result of the renovation and development of the network of directly-managed book stores in the Retail area.

Cash flow from ordinary operations (i.e. after cash-out for financial expense and tax) in the fist quarter 2025 amounted to over € 68 million and makes it possible to finance the Group’s development policy and increasingly remunerate shareholders without compromising solidity and the further financial strengthening of the Group.

Extraordinary cash flow was negative by approximately € 34 million, mainly due to cash-out related to acquisitions, for around € 18 million, restructuring costs, of around € 5 million and the costs relating to the renovation of the Segrate headquarters of around € 6 million.

As a result, the Free Cash Flow at 31 March 2025 was positive by € 34.2 million. Lastly, the Group recorded dividends to its shareholders of € 31.3 million in the last twelve months.

PERFORMANCE OF BUSINESS AREAS

TRADE BOOKS AREA

2025 saw a negative start to the year for the book market, which declined in value terms in the first quarter of the current financial year by 3.4%^[1]. The replacement of the APP18 (FY 2024 benefited from the use of dedicated funds until 30 April) by the Culture and Merit Cards and the different timing of the Easter holidays are among the main reasons for this decline.

In this context, the Mondadori Group’s publishing houses recorded a 7.2% fall in sell-out during the quarter, a less positive result than the market performance due to a publishing plan that will see the release of the most important new titles in the second half of the year and a slowdown in catalogue book sales.
During the reporting period, the Mondadori Group still maintained its national leadership with a market share of 26.2% as of March 2025.

Testifying to the quality of their editorial offerings, the Mondadori Group’s publishing houses placed four titles in the top ten bestsellers list during the first quarter, including, in particular, the second position of “Spera. L’autobiografia” (Hope: The Autobiography) of Pope Francis for Mondadori, currently in first place.

Revenues for the first quarter of 2025 amounted to € 86.7 million, down 4.4% compared to the first quarter of 2024, mainly attributable to a commercial transaction at Star Comics that was implemented in early 2024 and residually due to the termination in April 2024 of the Coliseum concession managed by Electa.

Adjusted EBITDA of the Trade Books area for the first quarter of 2025 amounted to € 9.6 million, a decrease of approximately € 5 million, attributable to the lower margin resulting from the drop in revenues for the period, both for print and digital products. Furthermore, as with revenues, the decline in margins in the quarter was largely attributable to Star Comics.

EDUCATION BOOKS AREA

School textbook publishing experiences a typical seasonal performance that sees sales squeezed in the second half of the year following the adoption campaign: as a result, the relating market shares for 2025 are unavailable at this time.

Total revenues recorded in the first quarter of 2025 amounted to € 8.7 million, down by 5.7% compared to the first quarter of 2024 (€ 9.2 million), with a negative change attributable to the timing of supplies to management customers.

Adjusted EBITDA in the first quarter of FY 2025 for the Education Books area stood at € -13.2 million, an improvement compared with the € -13.8 million recorded in the same period of 2024, as a result of lesser operating and structural costs. Note that this result is not significant as it stems from the aforementioned seasonality of the business, with the costs of the operational structure and development of the textbooks marketed during the adoption campaign completed at the end of the month of May being recorded during the first quarter.

RETAIL AREA

As already mentioned, the book market in Italy at the end of March recorded a drop of 3.4% compared to 2024; in particular, there was a slight decrease in value in the physical channel (-1.3%) and a more marked negative trend in the online channel (estimated at -6.8%).

In this scenario, the Retail area remained stable (+0.1%) and continued to outperform the market; as a result, Mondadori Retail’s market share stood at 12.8% (+0.5% compared with the first quarter of the previous year) thanks to the contribution of direct stores and franchising, as well as a good performance in the online channel.

In the first quarter of FY 2025, the Retail area recorded total revenues (book and non-book) of € 47.1 million, an increase of € 1.7 million (+3.7%) compared to the previous year.

The organic revenue growth (excluding Star Shop’s retail business revenues) of 1.5% (€ +0.7 million) would have been even more significant at 3.8% without the negative impact (of approximately € 1 million in Q1 2025) resulting from the temporary closure of the new Rizzoli bookstore in Milan, which reopened to the public on 9 May after renovation work following the new concession granted by Milan City Council.

Adjusted EBITDA amounted to € 2.3 million, essentially stable compared to the same quarter of the previous year. This result confirms a progression and constant improvement in performance, which has been going on for several years, and was achieved despite the negative impact (amounting to € 0.25 million) resulting from the temporary closure of the Rizzoli Milan bookstore, mentioned above.

MEDIA AREA

In Q1 2025, revenue in the Media area amounted to € 33.6 million, and posted an increase of 5% compared with the same period of the previous year, stemming from the strong growth (+19%) in the Digital component, which more than offset the structural downturn of the component linked to traditional activities.

Adjusted EBITDA came to € 5.4 million, showing growth of approximately 72% compared with the previous year, mainly due to the print segment.

OUTLOOK FOR THE YEAR

The economic and financial figures for the first quarter of the year were in line with the relevant forecasts, which estimated an overall weakness in the book market for the entire first half of the year compared to the previous year.

Therefore, the Group believes that it can confirm the guidance disclosed previously for FY 2025, which reflects the expectation of a recovery in the market environment during the year and a more marked improvement in the Group’s performance.

Income Statement

• low single-digit revenue growth;
• low single-digit growth in Adjusted EBITDA and therefore stable margins at around 17%, despite the increase in some cost components, thanks to targeted pricing policies on the book product as well as continuous efficiency gains affecting all business areas.

Cash Flow and Net Financial Position

• The Group is expected to confirm its significant cash generation capacity, which, in terms of Ordinary Cash Flow, is expected to be in the region of € 70 million. It should be noted that, with reference to the current year, due to the different scheduling of the publishing plan for the Trade Books area, which has seen the publication of the highest-selling titles concentrated in the first half of 2024 and the second half of 2025, respectively, the current year could experience a partial postponement of part of the receipts from the end of 2025 to the start of 2026;
• the Group’s Net Financial Debt (IFRS 16) is expected to come in, at end FY 2025, as 0x adjusted EBITDA (from 1.1x at end 2024), while the Net Financial Position excluding IFRS 16 is expected to improve to 0.5x Adjusted EBITDA (excl. IFRS 16).

2025-2027 PERFORMANCE SHARE PLAN: ASSIGNMENT OF RIGHTS

The Board of Directors, having heard the Remuneration Committee, resolved on the assignments to the beneficiaries of the rights relating to the 2025-2027 Performance Share Plan, established by resolution of the Shareholders’ Meeting of 16 April 2025.

The rights granted will be exercisable at the end of the three-year reference period, subject to the achievement of the performance targets underlying the Plan.

Information regarding the beneficiaries and the number of rights assigned are shown – by name, for the beneficiaries who are members of the Board of Directors, and in aggregate form for the other beneficiaries – in the table attached, prepared in compliance with Box 1, Schedule no. 7 of Annex 3A of the Issuer Regulation. The detailed terms and conditions of the Plan are set out in the Directors’ Explanatory Report to the Shareholders’ Meeting of 16 April 2025 and in the Information Document prepared pursuant to Article 84-bis, paragraph 1 of the Issuers’ Regulation, available on the website www.mondadorigroup.com Governance/Shareholders’ Meeting section and on the storage mechanism 1info (www.1info.it) to the contents of which reference should be made.

DETERMINATION OF SHARES ATTRIBUTABLE TO THE 2024 SHORT-TERM INCENTIVE PLAN (MBO)

The Board of Directors, having consulted with the Remuneration Committee, has – after verifying the achievement of the relevant individual and Group performance targets – determined the number of Mondadori shares attributable to the beneficiaries of the Short-Term Incentive Plan (MBO) for the year 2024, established by resolution of the Shareholders’ Meeting of 24 April 2024.

In particular, the Plan envisages a voluntary mechanism for the conversion into Mondadori shares of a percentage component equal to 15% or 30% of the Variable Remuneration (MBO) accrued in connection with FY 2024, as well as the disbursement of an additional “bonus” component in shares, equal to the number of shares resulting from the conversion.

In accordance with the rules of the Plan, the actual allocation to the beneficiaries of the total share component will take place in May 2027, following a 24-month deferral period from the vesting date of the 2024 MBO.
The detailed terms and conditions of the 2024 Short-Term Incentive Plan (MBO) are set out in the Directors’ Explanatory Report to the Shareholders’ Meeting of 24 April 2024 and in the Information Document prepared pursuant to Article 84-bis, paragraph 1 of the Issuers’ Regulation, available on the website www.mondadorigroup.com Governance/Shareholders’ Meeting section and on the storage mechanism 1info (www.1info.it) to the contents of which reference should be made.
Information regarding the beneficiaries and the number of Mondadori rights attributable to them are shown – by name, for the beneficiaries who are members of the Board of Directors, and in aggregate form for the other beneficiaries – in the table attached, prepared in compliance with Box 1, Schedule no. 7 of Annex 3A of the Issuer Regulation.

The Interim Management Statement at 31 March 2025 is made available by today through the authorised storage mechanism 1Info (www.1Info.it), on the website www.mondadorigroup.com (Investors section) and at the registered office.

The presentation of the results at 31 March 2025, approved today by the Board of Directors, is available on www.1info.it and on www.gruppomondadori.it (Investors section). A Q&A session will be held in conference call mode at 3.30 p.m. for the financial community, attended by the CEO of the Mondadori Group, Antonio Porro, and the CFO, Alessandro Franzosi. Journalists will be able to follow the meeting in listening mode only, by connecting to the following phone number +39.02.8020927 or via web at: https://hditalia.choruscall.com/?calltype=2&info=company

The Financial Reporting Manager – Alessandro Franzosi – hereby declares, pursuant to Article 154 bis, paragraph 2, of the Consolidated Finance Law, that the accounting information contained herein corresponds to the Company’s records, books and accounting entries.

Annexes (in the complete pdf):

1. Consolidated Statements of Financial Position
2. Consolidated Income Statement
3. Group cash flow
4. Glossary of terms and alternative performance measures used
5. Information pursuant to Schedule 7 of Annex 3a to CONSOB Regulation no. 11971/1999 – Remuneration plans based on financial instruments: 2025-2027 Performance Share Plan
6. Information pursuant to Schedule 7 of Annex 3a to CONSOB Regulation no. 11971/1999 – Remuneration plans based on financial instruments: 2024 Incentive Plan MBO

^[1] Source: GfK, March 2025

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the draft Parent Company and Group consolidated financial statements at 31 December 2024 presented by Chief Executive Officer Antonio Porro.

“2024 was a year of growth, during which our Group made significant strides in advancing our core businesses, with a particular focus on further strengthening our presence in book publishing,” said Antonio Porro, Chief Executive Officer and General Manager of the Mondadori Group.
“Our economic and financial profile highlights the increasing importance of books, which now account for 85% of our consolidated revenue and nearly 90% of our overall margins, demonstrating the ability to sustain high profitability. Lastly, our strong economic performance and solid cash generation position us to expect continued growth in the upcoming financial year, ensuring the creation of long-term value for our stakeholders,” Porro concluded.

Group Performance at 31 December 2024

In 2024, consolidated revenue totalled € 934.7 million, up by 3.3% versus € 904.7 million in 2023.
Like-for-like, due to the inclusion of Star Shop Distribuzione (from 1 February), Chelsea Green Publishing (from 1 May) and Fatto in casa da Benedetta (from 1 October 2024), the revenue remained largely stable.

Adjusted EBITDA was € 157.6 million, showed an increase of 3.6% on the € 152.1 million recorded for 2023, mainly thanks to the Trade Books, Retail and Media areas. Overall, profitability stood at 16.9%, stable compared to 2023.

Group EBITDA was € 155 million, an improvement of almost € 6.1 million on the € 148.9 million recorded for 2023.

The Mondadori Group’s EBIT, which was positive at € 92 million, showed a significant increase of 9.3%, reaching € 7.9 million compared to 2023, a year that had been adversely affected by write-downs totalling € 7.3 million. This improvement in the result was achieved despite the fact that higher depreciation and amortisation of € 5 million was recognised during the year, mainly due to the higher investments made and the purely accounting effects of the Purchase Price Allocation (PPA) process.
Neutralising extraordinary items, impairment write-downs and amortisation resulting from the price allocation of the companies acquired in the last five years (PPA), Adjusted EBIT for the financial year 2024 would stand at € 103.7 million, up by about 2% from € 102 million in the previous year 2023.

Consolidated results before tax were positive at € 84.1 million, up by about € 4 million from € 80.5 million in 2023. The higher result was achieved in spite of the lower contribution (around € 4 million) of associates and higher financial expenses (€ 0.5 million).

The Group’s net profit for the year ending 31 December 2024, after minority interests, was positive by € 60.2 million, a decrease of approximately € 2 million compared to € 62.4 million in 2023. This decline was primarily due to around € 4 million in higher tax expenses and an increased share of the result attributable to minority interests (€ 2.1 million). The 2023 result had benefited from the recognition of income that was either not taxable or subject to reduced taxation, such as capital gains, as well as contributions in the Media sector.
Adjusted Net Profit, after neutralising all non-recurring items previously mentioned, would amount to € 68.8 million, down by around 3% on the previous year.

The Net Financial Position gross of IFRS 16 as of 31 December 2024, stood at € -91.8 million (net debt), a slight increase from € -86.1 million as of 31 December 2023. The strong cash generation of the business enabled the financing of the acquisitions of Star Shop Distribuzione, Chelsea Green Publishing and Fatto in casa da Benedetta, as well as the increased remuneration of shareholders, without significantly raising the Group’s financial exposure.

Net Financial Position gross of IFRS 16 at 31 December 2024 stood at € -173 million (net debt), up by approximately € 14 million from € -158.6 million at 31 December 2023, due to an IFRS 16 debt component of € -81.2 million, up by approximately € 10 million due to the renovation and development of the network of directly-managed book stores in the Retail area in addition to the acquisitions finalised in 2024 in the Trade Books area.

The cash flow from ordinary activities (i.e. after cash-out for financial expenses and taxes) in the financial year 2024 is more than € 71 million, an increase of around 4% compared to 2023.

At 31 December 2024, extraordinary cash flow was negative by approximately € 42 million, mainly due to cash-out related to net balance of acquisitions and disposals for around € 26 million, restructuring costs of around € 6 million and the costs relating to the renovation of the Segrate headquarters.
As a result, the Free Cash Flow at 31 December 2024 was positive by € 29.1 million.

Finally, the Group recognised dividends to its shareholders of € 31.3 million in the year under review, equivalent to a pay-out of 50% of the 2023 net profit and an increase of about 9% compared to the previous year.

As at 31 December 2024, the Mondadori Group employed 2,133 people, an increase of 9.7% (+183) compared to 31 December 2023, as a result of the changes in the consolidation scope.

Performance of Business Areas

Trade Books Area

In 2024, the book market saw an uneven trend: the substantial stability of the first nine months of the year (-0.5%) was followed by a slowdown in the last quarter, which caused the market to show a -1.5% drop in value for the entire year.
The replacement of the “18App” with the Culture and Merit Cards and the state’s failure to provide libraries with € 30 million in funding for the purchase of books are among the main reasons for the decline in the Trade market in 2024 (a total of approximately € 63 million).
In this context, the Mondadori Group’s publishing houses recorded a 2.1% fall in sell-out in financial year 2024, due to a publishing plan that was overall less rich in bestsellers than in 2023, the year in which the Group had published “Spare” and Ken Follett’s ‘The Armour of Light’ .

In 2024, the Mondadori Group nevertheless maintained its national leadership with a market share of 27.5% thanks to the high editorial quality of its catalogue.
The Group also won the 78th Strega Prize with “L’età fragile” by Donatella Di Pietrantonio, published by Einaudi.

Revenue for the financial year 2024 totalled € 396.8 million, showing an increase over the previous year of about 6% (-0.5% on a like-for-like basis, despite the termination of the Colosseum concession).

Adjusted EBITDA of the Trade Books area for came to € 62 million, with a  margin growth of around 4.7% (€ 2.8 million), due to the improved profitability of the publishing houses, as a result in particular of the increase in digital revenue and lesser incidence of industrial costs (paper, first and foremost), which more than offset the decline in the margin recorded for museum activities. Changes in the consolidation scope during the year also contributed to this increase.

Education Books Area

In 2024, the Italian Scholastic market (primary and secondary schools) is estimated to have recorded a decrease, compared to the previous year, of about 2%, settling at a total value of about € 606 million, due to the downsizing of the sold/adopted ratio, which negatively affected revenue dynamics.

The Mondadori Group’s educational publishing houses achieved a market share (adoption) of 31.8%^[1], essentially stable compared to the previous year, confirming their leadership in the primary and secondary school segments, with growth in the secondary school segment and a fall in the primary segment, characterised by greater volatility and lower profitability.
In the financial year 2024, school business activities recorded total revenue of € 233.3 million, down slightly (1.8%) from € 237.5 million in 2023.

Adjusted EBITDA in the Education Books segment amounted to € 65 million, down from € 67.7 million in 2023, mainly due to the increase in logistics and transport costs resulting from the change in the contractual conditions applied by providers, in addition to revenue dynamics.
The profitability achieved by the area, of around 28% in 2024, was nevertheless substantially stable thanks to the lower incidence of industrial and promotional costs as well as the careful management of all discretionary and structural costs.

Retail Area

In 2024 the Retail area grew by 2%, outperforming the reference market for the fourth year in a row. As a result, Mondadori Retail’s market share in the Book product grew to 13.1%, driven by an excellent performance in direct shops and franchising, whose market share in the physical channel was close to 20%.

The transformation process launched over the past years has made for an improvement in operating and management performance, as shown by the income statement of 2024.

Total revenue (book and extra-book) amounted to € 215.5 million, an increase of € 16 million (+8%) compared to the previous year; at an organic level (i.e. net of revenue from comic shops and Star Shop Distribuzione’s e-commerce) the growth was 2.9%.
The increase in revenue on an organic level would have been even more significant (+3.8%) without the negative impact of the temporary closures (due to renovation needs) of the Bookstores in Marcianise (CE) and Nola (NA).

An analysis of the sales by channel reveals:

• further growth in revenue of direct bookstores (+7.2% on the previous year);
• the continuous improvement of franchisee bookstores (+2.3% vs 2023);
• a slight decline in the on-line channel (-3.4% compared to the previous year);
• the positive impact of revenue deriving from the management (direct and franchised) of Star Shop Distribuzione comic book stores and e-commerce website;
• the structural decline in revenues of Bookclub.

The Retail area presented an Adjusted EBITDA of € 16.7 million in the financial year 2024, and shows a significant growth of 19% compared to 2023 (+ € 2.7 million). This result confirms progression and constant improvement in performance seen for several years now.
Adjusted EBITDA also suffered the negative impact (€ 0.7 million) of the restoration projects of two bookstores, without which Adjusted EBITDA growth would have been around 24% (€ +3.4 million) compared with the previous year.

Media Area

In FY 2024, revenue in the Media area amounted to € 147.3 million, and posted an increase of over 4% since the previous year, stemming from the strong growth in the Digital component, which continues to more than offset the structural downturn of the component linked to traditional activities. 

In particular:

• the digital business, which accounts for approximately 46% of the area’s total revenue, has shown growth in advertising revenue of 20.3%, resulting in particular from the positive performance of the MarTech segment and the excellent results of the social agency and Webboh activities launched in early 2023;
• the traditional print business declined by 7.5%, mainly due to the structural drop in add-on sales and readership during the quarter under review.

Adjusted EBITDA for the Media area came to € 20.2 million in FY 2024, showing an increase of approximately 23% compared with 2023, mainly due to the digital business segment.
The EBITDA margin recorded an increase of 2 percentage points, from 11.7% to 13.7%.

Outlook for the year

The economic performance and cash generation capacity, also demonstrated in 2024, point to a further improvement in results for the next year.
From a strategic point of view, the Group intends to continue to strengthen and consolidate its integrated and diversified leadership position in the core businesses of book and digital publishing, and to expand its Retail network in order to increase coverage throughout the country.

In particular:

• in the Trade Books area, the Group will pursue the strengthening of its editorial positioning, emphasising the identity and specialisation of the various publishing houses in the various segments, through innovative plans that also include the expansion of the digital offer.
• In the Education Books area, it will continue to focus on the most profitable segments of the textbook market and consolidating its domestic leadership, strengthening and renewing its editorial offer and taking full advantage of the digital convergence process (through the new single digital platform for all three publishing houses).
• in the Retail area, on the one hand, the selective development of the network of shops will continue, both direct – through the opening of around ten new sales outlets – and in franchising; on the other, the activity of optimising the sales area and maximising the efficiency of the network, which is essential to increase the profitability of the area and emphasise its effectiveness in conveying the Group’s editorial proposal to the market, while maintaining a close watch on relevant consumer targets and new market trends.
• Meanwhile, in the media sector, the Group will keep strengthening its competitive position by enhancing digital skills and offerings, with a particular focus on consolidating initiatives in influencer marketing, food and MarTech.

The Mondadori Group will also continue to play an active role in the field of Artificial Intelligence, in its areas of competence, through the second PLAI start-up acceleration programme.

Income Statement

The Group’s economic and financial targets below refer to the current scope.

Given the above and the reference context, it is reasonable to expect low-single digit growth in both revenue and Adjusted EBITDA for the 2025 financial year, consistent with the 2024-2026 scenario projected last year. Margins are expected to remain stable at around 17%, supported by targeted pricing strategies for Book products and ongoing efficiency improvements across all business areas. This is despite rising costs, particularly in labour (due to the new National Collective Agreement) and logistics services. It is also worth noting that the terms and conditions for logistics services are being renegotiated for 2026 and beyond.

Cash Flow and Net Financial Position

The Group is expected to maintain its strong cash generation capacity, with an average annual Ordinary Cash Flow of around € 70 million, in line with the 2024-2026 forecast. For the 2025 financial year, the timing of the Trade Books area publishing plan, where the best-selling titles were released in the first half of 2024 and are scheduled for the second half of 2025, may result in some receipts being delayed from 2025 to 2026. As a result, there could be a slight shortfall compared to the target, but this will lead to a corresponding benefit in the early months of the following year.

The Group’s Net Financial Debt (IFRS 16) is expected to come in, at end FY 2025, as 1.0x adjusted EBITDA (from 1.1x at end 2024)

The Group’s significant cash generation will continue to be allocated to maximising the company’s value creation, through an active investment policy in its core and adjacent businesses aimed at seizing opportunities to strengthen the Group’s leadership, expand geographically and/or broaden its publishing offering and/or enhance its presence within the book value chain.
This development strategy will be accompanied by the well-established and increasing shareholder remuneration policy, through the confirmation of a Dividend Policy that provides for the annual distribution of 50% of the Ordinary Cash Flow per share or the Dividend per Share of the previous year increased by 10%, whichever is the greater.

Performance of Arnaldo Mondadori Editore S.p.A.

The Parent Company’s income statement at 31 December 2024 recorded the same net profit as in the consolidated financial statements of € 60.2 million (€ 62.4 million in 2023), due to the fact that the Company has chosen to use the equity method to measure its investments in the separate financial statements.

Revenues, which consist of the costs of central structures charged back to the subsidiaries, amounting to € 46 million, increased by about 7% compared to the previous year, due to higher charges (related to IT services, administrative services and occupied space).

Adjusted EBITDA for 2024 (€ -5.9 million) was essentially stable compared to the previous year, despite higher IT fees as well as costs related to the start-up of the PLAI project.

FY2024 presents a reported EBITDA of € -7.5 million, unchanged from FY2023 (€ -7.5 million), also due to lower restructuring costs (partly related to the early retirement plan in FY2023).

Dividend distribuition proposal proposal of € 0.14 per ordinary share

Based on the results of FY2024, the Board of Directors will propose to the next Annual General Meeting of Shareholders, scheduled for 16 April 2025, the payment of a dividend of € 0.14 per share to shareholders. This represents a 17% increase, amounting to a total of € 36.5 million.
This amount corresponds to a payout of 60% of the 2024 net profit and a dividend yield of almost 7% compared to the share price on 31 December 2024.

In compliance with the provisions of the “Regulations for markets organised and managed by Borsa Italiana S.p.A.” and line with the previous year, the dividend will be paid in two equal tranches:

• unit amount of € 0.07 for each ordinary share (net of treasury shares) outstanding at the record date stated below, from 21 May 2025 (payment date), with ex-dividend date no. 25 on 19 May 2025 (ex date) and with the date of entitlement to payment of the dividend, pursuant to Article 83-terdecies of the TUF (record date), on 20 May 2025;
• unit amount of € 0.07 for each ordinary share (net of treasury shares) outstanding at the record date stated below, from 26 November 2025 (payment date), with ex-dividend date no. 26 on 24 November 2025 (ex date) and with the date of entitlement to payment of the dividend, pursuant to Article 83-terdecies of the TUF (record date), on 25 November 2025.

Significant events after Year-End 2024

On 10 January 2025, Mondadori Libri S.p.A. finalised the acquisition of a further 25% stake in A.L.I. S.r.l. – Agenzia Libraria International, which operates in the distribution of books. As a result of this operation, Mondadori Libri S.p.A. has brought its former 75% stake held in the company to 100%.
The increase in the A.L.I. stake came following the exercise of the call option set forth in the contract signed and announced on 11 May 2022, at the time of the acquisition of an initial 50% stake in the share capital, which envisaged the right, for Mondadori Libri, to acquire the remaining 50%. This is thanks to a deferred purchase commitment and a put & call agreement, each accounting for 25% of the A.L.I. S.r.l. capital; the former was implemented and disclosed in January 2023.
The provisional price, paid in cash, is € 12.2 million, determined on the basis of the average 2023-2024 EBITDA as well as the positive net financial position (cash) of the scope covered by the transaction, which at 31 December 2024 amounted to € 27 million. This provisional price may be adjusted following the approval of the financial statements as at 31 December 2024.

On 3 March 2025 the Mondadori Group completed, through its subsidiary Mondadori Libri S.p.A., the acquisition of a further 24.5% stake in Edizioni Star Comics S.r.l., Italy’s leading comic book publisher. As a result of this operation, Mondadori Libri S.p.A. has now brought its stake in the publishing house to 75.5%, from the former 51%. The increase in the stake in Edizioni Star Comics was carried out through the exercise of the call option envisaged by the agreement signed and disclosed to the market on 6 June 2022, which gave the Mondadori Group the right to acquire the remaining 49% stake in the company in two tranches of 24.5% each, exercisable in 2025 and 2028. The provisional purchase price, paid fully in cash today, is € 5 million, determined on the basis of the average EBITDA for the three-year period 2022-2024 as well as the net financial position over the twelve months prior to the closing date (amounting to € 2.5 million). This provisional price may be adjusted following the approval of the 2024 financial statements.

Proposed renewal of the authorization to purchase and dispose of Treasury Shares

Following expiry of the previous authorization resolved upon by the Shareholders’ Meeting on 24 April 2024, with the approval of the financial statements at 31 December 2024, the Board of Directors will propose to the next Shareholders’ Meeting, scheduled for 16 April 2025, the renewal of the authorization to purchase and dispose of treasury shares with the aim of retaining the applicability of law provisions in the matter of any additional buyback plans and, consequently, of seizing any investment and operational opportunities involving treasury shares.

Below are the main elements of the Board of Directors’ proposal, which are consistent with those of the expired authorization.

• Motivations

The motivations underlying the request for the authorization to purchase and sell treasury shares refer to the opportunity to attribute to the Board of Directors the power to:

• use the Treasury Shares purchased or already in the Company portfolio as compensation for the acquisition of interests within the framework of the Company’s investments;
• use the treasury shares purchased or already held in portfolio against the exercise of option rights, including conversion rights, deriving from financial instruments issued by the Company, its subsidiaries or third parties and to use the treasury shares for lending, exchange or transfer transactions or to support extraordinary transactions on the Company’s capital or financing transactions that imply the transfer or sale of treasury shares;
• undertake any investments, directly or through intermediaries, including for the purpose of containing abnormal movements in share prices, stabilizing share trading and prices, supporting the liquidity of the share on the market, in order to foster the regular conduct of trading beyond normal fluctuations related to market performance, without prejudice in any case to compliance with applicable statutory provisions;
• rely on investment or divestment opportunities, if considered strategic by the Board of Directors, also in relation to available liquidity;
• dispose of treasury shares to service share-based incentive plans set up pursuant to Article 114-bis of the TUF, and plans for the free allocation of shares to employees or members of the governing bodies of the Company or to Shareholders.

• Duration

The authorization to purchase treasury shares runs from the date of any resolution approving the proposal by the Shareholders’ Meeting, until the Shareholders’ Meeting called to approve the financial statements at 31 December 2025 and, in any case, for a period no more than 18 months after that date. The authorization to dispose of treasury shares is requested for an unlimited period, given the absence of time limits pursuant to current regulations and the opportunity to allow the Board of Directors to make use of the maximum flexibility, also in terms of time, to carry out any disposal of shares.

• Maximum number of purchasable treasury shares

The authorisation would allow the purchase, on one or more occasions and in one or more tranches, of a maximum number of ordinary shares with a nominal unitary value of € 0.26, which – considering the treasury shares already held by the Company and the shares that may possibly be acquired by subsidiaries – shall not exceed a total of 10% of the share capital.

Pursuant to article 2357(1) of the Italian Civil Code, the purchase transactions will be carried out within the limits of the distributable profits and available reserves resulting from the last regularly approved financial statements at the time of each potential purchase transaction. The authorisation would include the right to subsequently dispose of the treasury shares acquired, in whole or in part, on one or more occasions and even before having exhausted the maximum number of purchasable shares.

• Criteria for purchasing treasury shares and indication of the minimum and maximum purchasing cap

Purchases would be made in accordance with articles 132 of the TUF, 144-bis(1)(b) and d-ter) of the Issuers’ Regulation, and thus:
(i) on regulated markets or multilateral trading systems, according to the operating criteria established in the organisation and management regulations of the same markets, which do not allow the direct matching of purchase trading proposals with predetermined sales trading proposals, as well as in compliance with any other legislation in force, including European ones.
(ii) by the methods established by the market practices permitted by Consob, pursuant to the combined provisions of article 180(1)(c) of the TUF and article 13 of Regulation (EU) no. 596 of 16 April 2014 (“Permitted Market Practices”).
Additionally, share purchase transactions may also be carried out in the manner envisaged in Article 3 of EU Delegated Regulation no. 2016/1052 in order to benefit, if the conditions are met, from the exemption under Article 5, paragraph 1, of EU Regulation no. 596/2014 on market abuse with regard to inside information and market manipulation.
The disposal of treasury shares may be made, on one or more occasions and even before having terminated the maximum number of purchasable treasury shares, either by selling them on regulated markets or according to other trading methods in compliance with the law, including EU law, in force and with the Admitted Market Practices, if applicable. The authorisation proposal provides that purchases are made at a unit price, compliant with any regulatory requirements, including European ones, or permitted market practices in force at the time, where applicable, without prejudice to the fact that the minimum and maximum purchase price will be set at a unit price no lower than the official stock market price of the Mondadori stock on the day prior to the day on which the purchase transaction is carried out, decreased by 20%, and no higher than the official stock market price on the day before the day on which the purchase transaction will be carried out, increased by 10%. In any event – except for any different price and volume determinations resulting from the application of the conditions set forth in the Admitted Market Practices – such price shall be identified in accordance with the trading conditions set forth in Delegated Regulation (EU) no. 1052 of 8 March 2016 and, specifically:

• no shares may be purchased at a price higher than the higher between the price of the last independent trade and the price of the highest current independent bid on the trading venue where the purchase is carried out; and
• in terms of volumes, daily purchase amounts will not exceed 25% of the daily average volume of Mondadori shares traded as recorded in the 20 trading days before the dates of purchase or in the month prior to the month of the disclosure required by Art. 2, paragraph 1, of Regulation (EU) no. 1052/2016.

In terms of consideration, sales transactions or other acts of disposition of treasury shares shall be carried out:

• if executed in cash, at a price no lower than 10% of the reference price recorded on the MTA – Euronext Milan – organized and managed by Borsa Italiana S.p.A. in the trading session prior to each single transaction;
• if executed as part of any extraordinary transactions in accordance with financial terms to be determined by the Board of Directors on the basis of the nature and characteristics of the transaction, also taking account of the market performance of Mondadori shares;
• if executed to service the Performance Share Plans in compliance with the terms and conditions set out in the resolutions of the Shareholders’ Meeting that establish the Plans and the related regulations.

To date, Arnoldo Mondadori Editore S.p.A. holds a total of no. 1,268,471 treasury shares, equal to 0.485% of the share capital.

For further information on the proposed authorization for the purchase and disposal of treasury shares, reference should be made to the Directors’ Explanatory Report, which will be published within the time limits and in the manner prescribed by applicable regulations.

Allocation of Shares under the 2022-2024 Performance Share Plan: Information pursuant art. ART. 84-bis, paragraph 5 CONSOB Regulation no. 11971/1999

The Board of Directors, based on the final assessment of the achievement of the Performance Targets underlying the Plan, and having heard the Remuneration and Appointments Committee, resolved to allocate, on 15 May 2025, a total of 507,774 Arnoldo Mondadori Editore S.p.A. shares to a total of 13 beneficiaries, implementing the provisions of the “2022-2024 Performance Share Plan” adopted by the Shareholders’ Meeting on 28 April 2022 (the “2022-2024 Plan”).

Mention should be made that the 2022-2024 Plan grants its beneficiaries the right to receive, free of charge, shares in the Company held as treasury shares provided that, at the end of a reference period of three financial years, the performance targets set in the same Plan have been achieved.
The beneficiaries of the 2022-2024 Plan are the Chief Executive Officer, the CFO and 11 managers identified by name by the Chief Executive Officer, as delegated by the Board of Directors.
The characteristics of the Plan are explained in detail in the Directors’ Report to the Shareholders’ Meeting of 28 April 2022 and in the information document drawn up pursuant to article 84-bis of CONSOB Regulation no. 11971/1999 available at www.gruppomondadori.it, Governance section, to which reference should be made.
Attached is the information required by Schedule 7 of Annex 3A to CONSOB Regulation no. 11971/1999 to account for the allocation of shares in the context of the 2022-2024 Plan.

Proposal to the Shareholders’ meeting to adopt a Performance Share Plan related to the three-year period 2025-2027

The Board resolved, on a proposal from the Remuneration and Appointments Committee, and continuing to apply the performance share instrument for the medium-long term remuneration of executive directors and strategic executives, as per Legislative Decree 58 of 24 February 1998, art. 114-bis, to submit for approval by the Shareholders’ Meeting, convened for 16 April 2025, the establishment of a Performance Share Plan for the three-year period 2025-2027, reserved for the Chief Executive Officer, the CFO – Executive Director and a number of Company Managers who have an employment and/or directorship relationship with the Company or with its subsidiaries on the date of allocation of the shares.
With the adoption of the Plan, the Company aims to encourage Management to improve medium to long-term performance, in terms of both industrial performance and growth in the value of the Company.
The Plan envisages the assignment to the beneficiaries of rights to the free allocation of company shares, subject to the achievement of specific performance targets set and measured at the end of the three-year performance period.
These targets are structured to include both shareholder remuneration indicators and management indicators functional to raising the share value, ensuring maximum alignment of Management remuneration and the creation of value for the Company, as well as indicators of a non-operating/financial nature linked to ESG issues.
For details on the proposed adoption of the 2025-2027 Performance Share Plan, the beneficiaries and the characteristics of said Plan, reference should be made to the Information Document approved by the Board of Directors, pursuant to Article 84-bis and annex 3A of the Issuer Regulation, and to the Explanatory Report of the Board of Directors, which will be published within the time limits and in the manner prescribed by applicable regulations.

Proposal to the Shareholder’s Meeting to adopt a short-term incentive Plan (MBO) 2025

On a proposal from the Remuneration and Appointments Committee, the Board resolved to submit the adoption of a Short-Term Incentive Plan (MBO) for the year 2025 to the Ordinary Shareholders’ Meeting for approval, pursuant to Article 114-bis of Legislative Decree no. 58 of 24 February 1998.
The Plan, which is reserved for the same beneficiaries as the 2025-2027 Performance Share Plan, governs the determination, subject to the achievement of specific individual and Group performance objectives, of the annual Variable Remuneration (MBO) for the year 2025. In particular, the Plan envisages a voluntary mechanism for the conversion into Mondadori shares of a percentage component equal to 15% or 30% of the Variable Remuneration itself, as well as the disbursement of an additional “bonus” component in shares, equal to the number of shares resulting from the conversion.

Any allocation of the total component in shares would take place at the end of a 24-month deferral period with respect to the MBO vesting date.

For details on the proposed adoption of the 2025 Short-term Incentive Plan (MBO), the beneficiaries and the characteristics of said Plan, reference should be made to the Information Document approved by the Board of Directors, pursuant to Article 84-bis and annex 3A of the Issuer Regulation, and to the Explanatory Report of the Board of Directors, which will be published within the time limits and in the manner prescribed by applicable regulations.

Supplementation of the Board of Statutory Auditors

As previously disclosed, on 21 December 2024, Ezio Simonelli resigned from his position as Standing Auditor. Consequently, pursuant to Article 2401 of the Italian Civil Code, the alternate auditor Emilio Gatto—who was on the same list submitted by the majority shareholder Fininvest S.p.A. at the Shareholders’ Meeting on 24 April—has taken over as Standing Auditor until the “next Shareholders’ Meeting.”
The Shareholders’ Meeting on 16 April 2025 will be called to resolve on the integration of the Board of Statutory Auditors through the appointment of one Standing Auditor and one Alternate Auditor.
It should be noted that, in accordance with the bylaws regarding the appointment by the Shareholders’ Meeting of Standing and/or Alternate Auditors for the integration of the Board of Statutory Auditors, as well as the replacement of auditors elected from the majority list, the appointments will be made by relative majority vote with no list constraints.

2024 Sustainability report pursuant to legislative decree 125/2024

In accordance with the requirements of Legislative Decree 125/2024, which implemented the Corporate Sustainability Reporting Directive (CSRD) in Italy, the Directors’ Report on Mondadori Group Operations in 2024 includes Sustainability Reporting. The introduction of the CSRD represents a significant regulatory development aimed at enhancing the quality, consistency, reliability, and comparability of sustainability reporting by companies operating within the European Union.
For the 2024 financial year, the contents of the Group’s Report were determined based on the results of a double materiality analysis (Impact Materiality and Financial Materiality), conducted in accordance with the new European Sustainability Reporting Standards (ESRS). This analysis enabled the identification of significant impacts, risks and opportunities, providing a comprehensive view of the company’s environmental, social and governance performance, as well as outlining its commitment to long-term value creation for all stakeholders. In 2024, continuing the approach from previous years, stakeholder engagement to assess material impacts was carried out through the involvement of employees, teachers and customers from our bookstores.

Sustainability Plan

The new 2025-2027 three-year Sustainability Plan enhances Mondadori Group’s central role as a publisher, placing particular emphasis on social sustainability, alongside environmental and governance aspects. The results of the double materiality assessment are structured around three sustainability pillars, which are strongly connected to the company’s identity and business strategy and are further broken down into goals, actions and targets.
The three identified pillars are:

• quality and social value of the publishing offer, through the promotion of reading and content accessibility;
• efficiency and environmental responsibility across the supply chain;
• empowerment and inclusion of people, through policies promoting diversity, social well-being, and human rights along the value chain.

The results for the year ended 31 December 2024, approved on today’s date by the Board of Directors, will be presented by the Mondadori Group Management to the financial community in a presentation scheduled today at 3:30 PM. The corresponding documentation will be available on 1Info (www.1info.it), at www.borsaitaliana.it and at www.gruppomondadori.it (Investors section). Journalists will be able to follow the proceedings of the presentation via webcast, by dialling +39028020927 and via web https://www.c-meeting.com/web3/join/MKRA9NDNUBPJNA.

The Financial Reporting Manager – Alessandro Franzosi – hereby declares, pursuant to Article 154 bis, paragraph 2, of the Consolidated Finance Law, that the accounting information contained herein corresponds to the Company’s records, books and accounting entries.

Annexes (in the complete pdf):

• Consolidated Statements of Financial Position
• Consolidated Income Statement
• Consolidated income statement – fourth quarter
• Group cash flow
• Arnoldo Mondadori Editore S.p.A. Statements of financial position
• Arnoldo Mondadori Editore S.p.A. income statement
• Arnoldo Mondadori Editore S.p.A. statement of cash flows
• Glossary of terms and alternative performance measures used
• Information pursuant to Schedule 7 of Annex 3a to CONSOB Regulation no. 11971/1999.

^[1] Source: AIE, 2024 (adopted first-year sections)

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the Interim Management Statement at 30 September 2024 presented by Chief Executive Officer Antonio Porro.

“During FY 2024, the improvement in our Group’s economic performance continued”, commented Antonio Porro, CEO and General Manager of the Mondadori Group. “The positive dynamic of revenue and Adjusted EBITDA and the relevant cash generation have allowed us to finance the acquisitions, increase remuneration of shareholders and confirm the objectives we set ourselves as targets for FY 2024. In fact, during the period, the development of our core business continued, also through acquisitions in books and digital”, Mr Porro concluded.

Performance at 30 September 2024

During the first nine months of 2024, consolidated revenue totalled € 705.8 million, showing growth of 3.8% compared with the previous year (€ 679.9 million in the same period of 2023). Net of the change in consolidation scope between the two periods under review, resulting from the consolidation of the companies Star Shop (from 1 February) and Chelsea Green Publishing (from 1 May), organic revenue growth was 1.1%.

Adjusted EBITDA was € 133.3 million, up 3.1% on the € 129.3 million recorded for the first nine months of 2023, mainly thanks to the Trade Books, Retail and Media areas.

The Group’s EBITDA came to € 134.2 million, compared with the € 131.5 million at 30 September 2023, showing, despite lesser non-recurring income linked to the net capital gain deriving from the sale of the Grazia and Icon in 2023, an improvement of approximately € 2.7 million due to the favourable dynamics of the operating components.

The Mondadori Group’s EBIT, positive for € 88.3 million, has shown, compared with the € 90.5 million for the first nine months of 2023, a slight downturn, of € 2.2 million, due to the greater amortisation/depreciation, of approximately € 5 million, recorded during the period under review, mainly deriving from:

• for € 2.3 million, larger investments made during the last 12 months;
• and for an amount of € 1.9 million, from the accounting effects of the Purchase Price Allocation (PPA) process relating to the M&A transactions completed during previous years.

Neutralising the extraordinary items and the amortisation deriving from the allocation of the price for the companies acquired in the last 5 years, the period’s Adjusted EBIT would stand at € 93.8 million, up by approximately 1% compared with the € 92.6 million of the same period of the previous year.

The consolidated result before tax of the first nine months of 2024 was positive at € 82.4 million, a decline of about € 5 million compared with € 87.1 million at 30 September 2023. This reduction is the result of the dynamics already described, in addition to the lesser contribution, for approximately € 2.5 million, of the lesser earnings of associates which in 2023 benefited from non-recurring income (capital gains and fair value revaluation).

Financial expense grew by € 0.2 million in total as a result of greater imputed costs linked to the IFRS 16 debt (€ +0.6 million). The financial expense associated with the bank debt, on the other hand, declined insofar as the higher cost of debt was more than offset by lower average debt.

The Group’s net profit at 30 September 2024, after minority interests, was positive for € 59.3 million, down by approximately € 7 million compared with € 66.3 million in the first nine months of 2023, of which approximately € 5 million arising from the non-ordinary dynamics described previously and the remaining € 2 million resulting from a greater share of the profit attributable to minority interests (€ +1.3 million) and higher tax expense.

The tax component for the first nine months of FY 2024 are, in fact, negative for € 21.6 million compared with € -20.5 million at 30 September 2023: the 2023 result had, in fact, benefited from the recognition of non-taxable income or income subject to reduced taxation such as the capital gains arising from the sales of magazines and of the investment in SEE, as well as the contributions in the Media area.

Adjusted Net Profit, neutralised of the extraordinary components (including capital gains) and amortisation deriving from the purchase price allocation of the companies acquired, would be € 63.2 million, essentially stable compared with the € 62.8 million of the same period of the previous year.

Net Financial Position net of IFRS 16 at 30 September 2024 was € -150.9 million (net debt), essentially unchanged compared with the € -152.3 million at 30 September 2023; the significant cash generation of the business made it possible to finance the acquisitions of Star Shop and Chelsea Green Publishing and to increase remuneration of shareholders without increasing the Group’s financial exposure.

Net Financial Position gross of IFRS 16 at 30 September 2024 stood at € -229.7 million (net debt), up by approximately € 6 million from € -223.9 million at 30 September 2023, due to an IFRS 16 debt component of € -78.8 million, up by approximately € 7 million due to the renovation and development of the network of directly-managed book stores in the Retail area in addition to the acquisitions finalised in 2024 in the Trade Books area.

Cash flow from ordinary operations (i.e. after cash-out for financial expense and tax) in the twelve months prior to 30 September 2024 amounted to € 67.3 million.

At 30 September 2024, extraordinary cash flow of the twelve months previous was negative by approximately € 29 million, mainly due to cash-outs related to net balance of acquisitions and disposals for around € 15 million, restructuring costs for around € 6 million and the renovation of the Segrate headquarters for approximately € 4 million.

As a result, Free Cash Flow LTM at 30 September 2024 – positive for € 38.1 million – reflected the ongoing efficiency of the Group’s structures and confirmed its capacity to self-finance its inorganic growth policy.

Finally, during the period under review, the Mondadori Group recorded dividends for its shareholders for approximately € 31 million (of which 50% already distributed on 22 May 2024 and the remaining € 15.5 million assigned for payment on 20 November 2024).

Outlook for the year

In light of the results achieved in the first nine months of FY and the reference markets scenario, the Mondadori Group confirms the previously communicated guidance for the 2024 financial year.

Income Statement:

• low single-digit revenue growth;
• mid single-digit growth in the Adjusted EBITDA, with margins expected to remain stable at around 17%; this result is due to targeted pricing policies and a further reduction of paper and printing costs.

Financial data

In FY 2024, the Group confirms its significant cash generation capacity and therefore an estimated Ordinary Cash Flow of around € 70 million.

Performance of Business Areas

Trade Books Area

During the first nine months of the year, the book market showed essential stability (-0.5%[1] compared with the previous year).

In this context, the Mondadori Group’s publishing houses recorded a significantly better result than the reference scenario, with overall growth in the first nine months of 1.5% – even more significant in the third quarter alone (+3.6%) – thanks, in particular, to the excellent performance of sales of Italian fiction.
This performance has allowed the Mondadori Group to strengthen its national leadership with a market share of 28%.

As proof of the quality of the publishing plan and the depth and assortment of its catalogue, during the first nine months of the year, the Mondadori Group was able to place 4 titles in the top ten best-sellers list[2]. In addition, in July the Mondadori Group, through the Einaudi publishing house, won the 78th edition of the Strega Prize with “L’età fragile” by Donatella Di Pietrantonio.

During the first nine months of FY 2024, Trade Books area revenue came to € 281.9 million, showing growth of 7.5% (+0.7% like-for-like) compared with € 262.4 million for the same period of the previous year.

Adjusted EBITDA of the Trade Books area for the first nine months of 2024 came to € 42.2 million, showing margin growth of around 3% (€ 1.2 million), due to the improved profitability of the publishing houses, as a result in particular of the growth of digital revenue and lesser incidence of industrial costs (paper, first and foremost), which more than offset the decline in the margin recorded for museum activities.

Education Books Area

The Textbooks market (primary and secondary schools) reported a reduction of 1.5% in the total number of students (sharper in primary school), due to the demographic trend recorded in Italy.

In the first nine months of FY 2024, the Mondadori Group school textbook publishing houses achieved a market share (adoptions) of 31.8%, stable compared with the previous year and thereby confirming its leadership at national level. This result is due to growth in the secondary school segment (middle and upper schools) and a downturn in the primary school segment, characterised by greater volatility and lesser profitability.

In the first nine months of 2024, the area’s business recorded total revenue of € 213.9 million, slightly down (- 0.7%) versus € 215.5 million of the same period in 2023.

Adjusted EBITDA for the Education Books area came to € 73.8 million, in line with the € 73.9 million recorded in the same period of the previous year: the limitation of operating costs made it possible to offset greater logistics costs for € 1.9 million and the loss of margin deriving from the lesser revenue.

Retail Area

As already mentioned, the book market in Italy at end-September recorded a slight overall decline (-0.5%[3]) compared with the same period of 2023; growth of the physical channel (+1.1%); negative performance of the on-line channel (estimated at -3.3%).
In this context, the Retail area continued to outperform the market; Mondadori Retail’s market share in the Book product stood at 13.2%, an increase compared with 30 September 2023, driven by an excellent performance of both direct and franchise stores and good performance of the on-line channel.

Total revenues (book and non-book) amounted to € 143.8 million, an increase of € 10.4 million (+7.8%) compared with € 133.4 million compared to the same period of the previous year.
On an organic level (i.e. net of revenue from Star Shop, consolidated in this area as of 1 February 2024) the growth was 2.6%. The growth in revenue on an organic level would have been even more significant (+3.8%) without the impact of the temporary closures (due to renovation work) of the bookstores in Marcianise and Nola, which weighed on revenue for over € 1.6 million in the first nine months of the current financial year.

An analysis of sales by channel compared with the previous year reveals:

• further growth in revenue of direct bookstores (+5.3%);
• the continuous growth of franchisee bookstores (+3.1%);
• a slight decline in the on-line channel (-4%);
• the positive impact of revenue deriving from the management (direct and franchised) of Star Shop comic book stores and e-commerce website;
• the decline in revenues of Bookclub.

During the first nine months of the current year, the Retail area presented Adjusted EBITDA of €9.4 million (net of the Star Shop comic book stores margin impact), and highlighted significant growth, of 12.8%, compared with the first nine months of 2023 (€ +1.1 million). This result confirms progression and constant improvement in performance seen for several years now.
Adjusted EBITDA also suffered the negative impact (€ 0.6 million) of the specified restoration projects, without which Adjusted EBITDA growth would have been around 20% (€ +1.7 million) compared with the same period of the previous year.

Media Area

During the first eight months of FY 2024, the advertising market recorded an increase of 7.6% compared with the previous year; in this context, the digital segment grew by 5.5% while magazines declined by 1.4%[4]. The magazines circulation market declined by 6.7%[5] and add-on products recorded a reduction of 10.1%[6].

In the first nine months of FY 2024, revenue in the Media area amounted to € 106.4 million, and posted an increase of around 5% since the previous year, stemming from the strong growth in the Digital component, which continues to offset the structural downturn of the component linked to traditional activities. Specifically:

• the digital business (approximately 43% of the area’s total revenue) has shown growth in advertising revenue of 24.5%, resulting in particular from the positive performance of the MarTech segment and the excellent results of the social agency and Webboh;
• the traditional print business declined by 6.9%, mainly due to the structural drop in add-on sales and readership during the quarter under review.

Adjusted EBITDA for the Media area came to € 12.8 million in the first nine months of FY 2024, showing growth of approximately 25% compared with the previous year, mainly due to the digital business. The EBITDA margin recorded an increase of 2 percentage points, from 10.1% to 12%.

Consolidated financial highlights of third quarter 2024

The consolidated revenue of the third quarter of 2024 came to € 318.7 million, essentially stable compared with the same quarter of the previous year: like-for-like, the organic performance of revenue recorded a slight downturn of 2%.
Adjusted EBITDA was € 92.4 million, an increase of almost € 1 million on the € 91.1 million recorded for the third quarter of 2023.
The quarter’s EBITDA came to € 91.8 million (€ 91.1 million in Q3 2023), revealing that, despite the lesser non-recurring income, there had been an improvement of € 0.6 million that reflects the positive operating trend.
EBIT of € 75.6 million was reported, showing a slight reduction of € 0.9 million compared with the same period of the previous year. Despite the positive operating performance of all business areas that had led to an improvement in the profitability of the Group, the higher depreciation and amortisation recorded, in the amount of € 1.6 million, as a result of the growing investments and the PPA process, resulted in this downturn compared with the previous year.
Neutralising the extraordinary items and the amortisation deriving from the allocation of the price for the companies acquired in the last 5 years (PPA), Adjusted EBIT would stand at € 78.4 million, up by approximately € 0.5 million compared with the third quarter of 2023.

Start of share buyback program to service the 2024-2026, 2023-2025 and 2022-2024 performance share planstart of share buyback program to service the 2024-2026, 2023-2025 and 2022-2024 performance share plans

The Board of Directors approved the start of a share buyback program, under Article 5 of Regulation (EU) no. 596/2014, to be executed in accordance with the terms and conditions, already disclosed to the public, resolved by the Ordinary Shareholders’ Meeting of 24 April 2024 which, among other things, authorized:

• the purchase and disposal of treasury shares for a maximum amount of up to 0.39% of the share capital, which is intended to provide the Company with the no. 1,018,196 shares required over the three-year period to meet the obligations under the 2024-2026 Performance Share Plan established by the same Shareholders’ Meeting, pursuant to Article 114-bis of the TUF;
• the continuation of the buyback program to service the 2022-2024 Performance Share Plan and the 2023-2025 Performance Share Plan in the manners and within the limits set out in the relevant Regulations.

Pursuant to Delegated Regulation (EU) 2016/1052, details of the buyback program are shown below:

• Purpose of the plan

The sole purpose of the program is the buyback of Arnoldo Mondadori Editore S.p.A. treasury shares to service the 2024-2026 Performance Share Plan, the 2023-2025 Performance Share Plan and the 2022-2024 Performance Share Plan.

• Maximum amount in cash allocated to the plan

Buybacks will be made at a minimum unit price not lower than the official Stock Exchange price on the day before the purchase transaction, reduced by 20%, and at a maximum unit price not higher than the official Stock Exchange price on the day before the purchase transaction, increased by 10%. The volumes and unit purchase prices will, however, be defined in accordance with the conditions governed by Article 3 of EU Delegated Regulation 2016/1052. Specifically, no shares may be purchased at a price higher than the higher between the price of the last independent trade and the price of the highest current independent bid on the trading venue where the purchase is carried out. In terms of volumes, daily purchase amounts will not exceed 25% of the daily average volume of Mondadori shares traded over the 20 trading days before the dates of purchase.

• Maximum number of shares to purchase

Purchases will regard a maximum of no. 720,000 ordinary shares (equal to 0.275%) of the share capital, taking account of the treasury shares already held in the Company’s portfolio, to service the aforementioned Performance Share Plans, in the manners and within the limits set out in the relevant Regulations.
The maximum total amount of shares under the program is therefore within the limits of 10% of the share capital indicated by the Shareholders’ Meeting of 24 April 2024, taking account also of the no. 548,471 treasury shares, equal to 0.209% of the share capital, already held by the Company to date.

• Duration of the plan

The buyback program runs from 21 November 2024. The conclusion of the program, in any case by the Shareholders’ Meeting convened to approve the financial statements at 31 December 2024, the date on which authorisation to purchase treasury shares resolved by the Shareholders’ Meeting of 24 April 2024 expires, will be disclosed to the market.
The buyback program may be renewed upon further authorization by the shareholders.

• Buyback procedures

The buyback program will be coordinated and executed by an authorized intermediary, who will make the purchases independently, with no influence from Arnoldo Mondadori Editore S.p.A. as regards the timing of the purchases.
Buybacks will be made pursuant to the combined provisions of Article 132 of Legislative Decree no. 58/1998 and of Article 5 of Regulation (EU) 596/2014, Article 144-bis of the Issuers’ Regulation, and the EU and national legislation on market abuse (including Delegated Regulation (EU) 2016/1052), in accordance with the resolutions of the above Shareholders’ Meeting of 24 April 2024.
Any subsequent changes to the buyback program will be promptly disclosed by the Company. The transactions made will be disclosed to the market in the manners and within the time limits of applicable law.
For information on the above Performance Share Plans, reference should be made to the information documents prepared pursuant to Article 114-bis of Legislative Decree no. 58/1998 and to Article 84-bis of CONSOB Regulation no. 1197/1999 and available on the website www.mondadorigroup.com ( Governance section) and at the authorized storage mechanism 1Info (www.1Info.it).

Convening of the extraordinary shareholders meeting for the proposed supplementation of the company’s bylaws. notice of publication of documents

The Board of Directors has also convened the Extraordinary Shareholders Meeting for 18 December 2024 (19 December in the event of a second call) to resolve on a proposal to supplement the company’s bylaws. The supplement regards, in execution of the provisions introduced by art. 11 of Italian Law no. 21 of 5 March 2024 (the “Capital Markets Law”), the attribution to the Board of Directors of the faculty to determine that intervention and exercise of voting rights in shareholders’ meetings may also take place exclusively through the Company’s appointed representative in accordance with Article 135-undecies.1 of Italian Legislative Decree no. 58 of 24 February 1998.
The notice calling the shareholders’ meeting and the Directors’ Explanatory Report are available to the public, in accordance with articles 125 bis and 125 ter of Italian Legislative Decree no. 58 of 24 February 1998, on the Company’s website www.mondadorigroup.com (Governance/Shareholders’ meeting section) and on the authorised storage mechanism 1Info at www.1info.it. The Call notice is also published in extract form, on 14 November, in the newspaper “il Giornale”.

The Interim Management Statement at 30 September 2024 is made available by today through the authorised storage mechanism 1info (www.1info.it), on www.mondadorigroup.com (Investors section) and at the registered office.

The presentation of the results at 30 September 2024, approved today by the Board of Directors, is available on www.1info.it and on www.mondadorigroup.com (Investors section).

A Q&A session will be held in conference call mode at 3.30 p.m. for the financial community, attended by the CEO of the Mondadori Group, Antonio Porro, and the CFO, Alessandro Franzosi. Journalists will be able to follow the meeting in listening mode only, by connecting to the following phone number +39.02.8020927 or via web at: https://hditalia.choruscall.com/?calltype=2&info=company.

The Financial Reporting Manager – Alessandro Franzosi – hereby declares, pursuant to Article 154 bis, paragraph 2, of the Consolidated Finance Law, that the accounting information contained herein corresponds to the Company’s records, books and accounting entries. 

Annexes (in the complete pdf): 

1. Consolidated Statements of Financial Position
2. Consolidated Income Statement
3. Consolidated income statement – III quarter
4. Group cash flow
5. Glossary of terms and alternative performance measures use

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the Interim Management Statement at 31 March 2024 presented by Chief Executive Officer Antonio Porro.

“I am very pleased with the economic and financial results achieved in the first quarter. Despite this being the seasonally less relevant period of the year, they allow us to confirm the outlook for the 2024 financial year. Furthermore, in the first few months of the current financial year our Group continued to develop its core businesses, focusing in particular on strengthening its presence in book publishing. We finalised the acquisition of 51% of Star Shop, a distribution and sales outlet management company operating in the comics segment, consolidated since 1st February, and, just a few weeks ago, we completed the acquisition of 100% of Chelsea Green Publishing, a publishing house focused on sustainability issues, which not only allows us to diversify our editorial portfolio, but marks a further step forward in our growth journey outside the Italian trade market, in the United States and the United Kingdom”, says Antonio Porro, Chief Executive Officer and General Manager of the Mondadori Group.

Consolidated revenues for Q1 2024 amounted to € 166.1 million, having grown by 3.8% on Q1 2023 (€ 160 million). Net of the change in consolidation scope between the two periods under review, resulting from the consolidation of Star Shop, organic revenue growth was 1.5%.

Adjusted EBITDA for Q1 2024 was € 4.8 million, up 9.3% on the € 4.4 million recorded for the same period of 2023, mainly thanks to the performance of the Trade BOOKS and RETAIL areas.

EBITDA for Q1 2024 came to € 5.7 million, compared to € 4.7 million as at 31 March 2023, showing an improvement of approximately € 1.1 million (+22.7%) due to the favourable dynamics of the management and extraordinary components.

The Mondadori Group’s EBIT for Q1 2024, negative by € 8.7 million, was € 0.5 million lower than the first three months of 2023 owing to the higher amortisation and depreciation recorded in the period, amounting to € 1.5 million, resulting both from the greater investments made in the last twelve months (€ +1 million, including € 0.25 million for the new flagship store project in Piazza Duomo) and from the accounting effects of the Purchase Price Allocation process (€ +0.5 million compared to Q1 2023) connected with the M&A transactions completed during 2023, particularly in the Trade BOOKS area.

Financial expense grew by 0.2 million in total as a result of greater charges linked to the IFRS 16 debt.

The consolidated result before tax for Q1 2024 is negative by € 10.2 million, down by approximately € 1.4 million from the € -8.8 million recorded on 31 March 2023, mainly due to a lower contribution (of approximately € 0.7 million) from the earnings of associates, which in the first quarter of 2023 benefited from a non-recurring component resulting from the fair value revaluation of the investment in the company A.L.I. of € 1.3 million.

The tax component for Q1 2024 is positive by € 4.1 million compared to € 3.6 million as at 31 March 2023 due to the lower pre-tax result.

The net profit attributable to the Group as at 31 March 2024 was negative by € 7.1 million, down compared to the net loss recorded in the first quarter of 2023 (€ -5.2 million) of approximately € 2 million, half of it deriving from the dynamics already mentioned and the remaining part linked to the greater share of the result pertaining to third parties (€ 1 million).

The Net Financial Position excluding IFRS 16 as of 31 March 2024 was € -133.3 million (net debt), an improvement of more than € 17 million compared to € -150.7 million in Q1 2023, due to significant cash generation by the business and despite the dividend distribution cash-out and the acquisition of Star Shop. The IFRS 16 Net Financial Position as of 31 March 2024 amounted to € -205.5 million (net debt), from € -220.8 million in 2023, due to an IFRS 16 debt component of € -72.3 million.

Cash flow from ordinary operations (after cash-out for financial expense and tax) in the twelve months prior to 31 March 2024 amounted to € 69 million and allows the Group to continue to strengthen its financial structure. Extraordinary cash flow was negative by € 19.2 million, mainly due to net cash-outs related to acquisitions and disposals of around € 10 million and restructuring costs of around € 5 million.

Consequently, LTM Free Cash Flow at 31 March 2024 was positive for € 49.8 million, confirming the Group’s capacity to finance its inorganic growth policy and shareholder remuneration policy.

PERFORMANCE OF BUSINESS AREAS

Trade BOOKS AREA

The first three months of 2024 saw a slight decline of 3.8% (in value) in the book market, resulting in particular from the trend in the months of January-February; in fact, the performance in March decidedly bucked the trend, showing an increase of 8.2% on the previous year.
In this context, the Mondadori Group’s publishing houses recorded a 4.7% drop compared to the first three months of 2023, which had however benefited from the publication of “Spare. Il minore” (Spare), the highly successful biography of Prince Harry published by Mondadori. Net of the revenue made from this book in 2023, Q1 2024 shows growth of 1.8% and therefore a significantly better performance than the reference market.

The Mondadori Group maintained its national leadership with a market share of 27.2% as of March 2024.

Revenue for Q1 2024 increased by 4.2%, 1.7% net of the consolidation of Star Shop: despite the first quarter of 2023 having benefited from the huge success of the publication of “Spare. Il minore” (Spare), the biography of Prince Harry published by Mondadori. This positive result is attributable in particular to the quality of the editorial plan implemented by the publishing houses and to several special initiatives, as well as to the growth in digital revenues.

The Adjusted EBITDA of the Trade BOOKS area for Q1 2024 stood at 14.8 million, having grown by approximately 12% (€ 1.6 million), largely due to the improved profitability of the publishing houses.

Education BOOKS AREA

School textbook publishing experiences a typical seasonal performance that sees sales squeezed in the second half of the year following the adoption campaign: as a result, the relating market shares for 2024 are unavailable at this time. For the same reasons, revenue achieved in the first three months typically represents less than 5% of the annual figure.

In the first quarter of 2024, the school textbooks business recorded an overall revenue of € 9.2 million, up 8.4% compared to Q1 2023 (€ 8.5 million) with a positive change attributable to the advance on supplies to top accounts, and therefore showing a performance that is not representative of the trend for the entire financial year.

Adjusted EBITDA in the first quarter of 2024 stood at € -13.8 million compared to € -11.7 million in the same period of 2023, as a result of the advanced production of the new textbooks made available to the sales network to support their promotion. Note that this result is not significant as it stems from the aforementioned seasonality of the business, with the costs of the operational structure and development of the textbooks marketed during the adoption campaign completed at the end of the month of May being recorded during the first quarter.

RETAIL AREA

As previously stated, there was a 3.8% decline (in value) in the book market in Italy in the first three months of 2024 compared to the same period of 2023. In this context there was a substantial stability of the physical channel (+0.4%) and a simultaneous negative trend in the online channel (estimated at -9.8%).
The Mondadori Group’s RETAIL area, however, recorded growth of 2.7% in Q1 2024, with a better performance compared to the market. Consequently, Mondadori Retail’s market share in the Book product stands at 12.5% (up 0.8% compared to 31 March 2023), driven by an excellent performance of direct and franchised stores.

In the first three months, revenue amounted to € 43.8 million, a 9% increase compared to the first quarter of 2023, also due to the consolidation of Star Shop’s retail activities. Organic growth amounted to 5.2%, driven by the Book product, sales of which increased by +4.9% (€ +1.6 million).
In the first three months, the RETAIL area presented an Adjusted EBITDA of € 2.3 million, highlighting growth of over 35% compared to the first quarter of 2023 (€ +0.6 million), attributable to the growth in revenues, in particular of the Book product, and the continued development and renewal of the direct store network.

MEDIA AREA

In the first two months of 2024, the advertising market (excluding search, social, classified and OTT) showed an increase of 4% compared to the previous year.
In Q1 2024, the MEDIA area recorded revenues of € 32 million, a slight decrease of 1% due to the effect of the traditional business, mainly resulting from the structural contraction of joint sales. Conversely, the digital business, which accounts for approximately 42% of the area’s revenues, show an overall growth in advertising revenues of 25% resulting in particular from the positive performance of the MarTech segment and the excellent results of the social agency activities launched in early 2023.

The Adjusted EBITDA of the MEDIA area in the first quarter of 2024 stood at € 3.2 million, having grown by approximately 11% compared to the previous year, owing to the performance of the digital business, the constant improvement in operational activities and the reduction in the cost of paper.

OUTLOOK FOR THE YEAR

In light of the results achieved in the first quarter and the reference markets scenario, the Group believes it can confirm the previously communicated guidance for the 2024 financial year.

Income Statement

• low single-digit revenue growth;
• mid single-digit growth in the Adjusted EBITDA, with margins expected to remain stable at around 17%, thanks to targeted pricing policies and the further reduction of paper and printing costs.

Financial data

In the financial year 2024, the Group is expected to confirm the significant cash generation capacity and therefore an Ordinary Cash Flow of around € 70 million.

2024-2026 PERFORMANCE SHARE PLAN: ASSIGNMENT OF RIGHTS

The Board of Directors, having heard the Remuneration Committee, resolved on the assignments to the beneficiaries of the rights relating to the 2024-2026 Performance Share Plan, established by resolution of the Shareholders’ Meeting of 24 April 2024. Information regarding the beneficiaries and the number of rights assigned are shown – by name, for the beneficiaries who are members of the Board of Directors, and in aggregate form for the other beneficiaries – in the table attached, prepared in compliance with Box 1, Schedule no. 7 of Annex 3A of the Issuer Regulation. The terms and conditions of the Plan are set out in the Directors’ Explanatory Report to the Shareholders’ Meeting of 24 April 2024 and in the Information Document prepared pursuant to Article 84-bis, paragraph 1 of the Issuers’ Regulation, available on the website www.gruppomondadori.it Governance section and on the storage mechanism www.1info.it to the contents of which reference should be made.

PUBLICATION OF THE MINUTES OF THE SHAREHOLDERS’ MEETING

Arnoldo Mondadori Editore S.p.A. informs that the minutes of the Ordinary and Extraordinary Shareholders’ Meeting held on 24 April 2024 are available on the authorised storage mechanism 1Info (www.1info.it), in the Governance section of the Company website www.mondadorigroup.com and at the Company’s registered office.

The Interim Management Statement at 31 March 2024 is made available by today through the authorised storage mechanism 1Info (www.1Info.it), on www.mondadorigroup.com (Investors section) and at the registered office.

The presentation of the results at 31 March 2024, approved today by the Board of Directors, is available on www.1info.it and on www.mondadorigroup.com (Investors section). A Q&A session will be held in conference call mode at 4.00 pm for the financial community, attended by the CEO of the Mondadori Group, Antonio Porro, and the CFO, Alessandro Franzosi. Journalists will be able to follow the meeting in listening mode only, by connecting to the following phone number +39.02.8020927 or via web at: https://hditalia.choruscall.com/?calltype=2&info=company.

The Financial Reporting Manager – Alessandro Franzosi – hereby declares, pursuant to Article 154 bis, paragraph 2, of the Consolidated Finance Law, that the accounting information contained herein corresponds to the Company’s records, books and accounting entries.

Annexes (in the complete pdf):

1. Consolidated Statements of Financial Position
2. Consolidated Income Statement
3. Group cash flow
4. Glossary of terms and alternative performance measures used
5. Information pursuant to Schedule 7 of Annex 3a to CONSOB Regulation no. 11971/1999

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the draft Parent Company and Group consolidated financial statements at 31 December 2023 presented by CEO Antonio Porro.

“In the financial year just ended, the Mondadori Group continued to develop its core business, focused on strengthening its presence in book publishing as well as on promotion and distribution for third-party publishers. The Group achieved excellent consolidated earnings, significantly higher than the previous year. The Group’s current configuration, also in light of the economic and financial results achieved in 2023, allows us to predict further improvement for 2024 of results even with the same consolidation scope”, underlined Antonio Porro, CEO of the Mondadori Group.

PERFORMANCE AT 31 DECEMBER 2023

Consolidated revenues for 2023 amounted to € 904.7 million, a slight increase (+0.2%) on the € 903 million recorded in 2022. Net of the changes in consolidation scope between the two financial years, the organic growth in revenues rose to 1.1%.

The Adjusted EBITDA for 2023 of € 152.1 million (compared to € 136.3 million in 2022) shows an increase of almost € 16 million (+11.5% and consistent with the guidance, which estimated a high single/low double-digit increase) to which all business areas contribute.

Netting the results for the two periods in question of the reliefs and contributions respectively paid, the growth recorded by Group’s Adjusted EBITDA would exceed € 19 million (+14.2%). Two thirds of this result is derived from the operating performance of the original consolidation scope (thanks, in particular, to the Education and Retail Books areas) and the remaining part is mainly attributable to the consolidation of the new companies acquired in the Trade Books area.

Overall, profitability stood at 16.8%, up by almost 2 percentage points from around 15% in the 2022 financial year and in the upper part of the target range previously communicated to the market.

The Group EBITDA for the 2023 financial year was € 148.9 million, compared to € 130.7 million in 2022, highlighting an € 18.2 million improvement (+13.9%) attributable to the favourable trend in some operating components and the recognition in the 2023 financial year, in the Media area, of the net capital gain resulting from the sale of the Grazia and Icon magazines (and the related international network).

The 2023 EBIT was positive in the amount of € 84.2 million, showing an improvement of € 11.5 million compared to 2022 (+15.8%). Neutralising the extraordinary items and the impacts of the PPA and impairment processes, the Adjusted EBIT would stand at € 102 million, up by approximately € 12 million (+13.1%) compared to the previous year.

Financial charges recorded an overall increase of over € 2 million, with approximately € 0.5 million resulting from the higher cost of debt – despite a reduction in average exposure – and the remaining € 1.6 million resulting from higher costs arising from the accounting effects of IFRS 16 which, in the 2022 financial year, had allowed non-recurring income (approximately € 1.4 million) linked to the early closure of the old rental contract for the Segrate headquarters to be recognised.

Consolidated result before tax were positive at € 80.5 million, up by about € 14 million (+20.4%) from € 66.9 million in 2022. Also contributing to this performance was an improvement of over € 4 million in the earnings of associates, resulting in particular from: the updated fair value measurement of the investments in A.L.I. and Adgage for a total of approximately € 2 million; the recognition of a capital gain – net of the negative result for the first four months – of € 0.4 million relating to the sale in April 2023 of the residual investment in SEE, the publishing company of Il Giornale, which reported a loss of approximately € 1.8 million in the previous year; the absence of the write-down of the equity investment in Attica, which had a € 1.7 million impact on the 2022 financial year.

The Mondadori Group’s net profit for the year to 31 December 2023, after minority interests, amounted to € 62.4 million, a significant improvement of about 20%, in line with expectations and despite the impairment, equivalent to € 10.3 million, compared to € 52.1 million in 2022. The net profit for 2023 triples the value of the 2019 financial year.

Tax costs in the period totalled € 17.9 million versus € 15.3 million in 2022 due to the higher pre-tax result.

Adjusted net profit for the 2023 financial year, neutralising all non-recurring items previously mentioned, would amount to about € 71 million, up by around 11% on the previous year (€ 63.9 million).

The Net Financial Position excluding IFRS 16 as of 31 December 2023 was € -86.1 million (net debt), an improvement of € 20 million compared to € -106 million in 2022, due to significant cash generation by the business and despite the dividend distribution cash-out. In the financial year 2023, the Group distributed dividends totalling approximately € 29 million, equivalent to a pay-out of 55% of the 2022 net profit.

The IFRS 16 Net Financial Position as of 31 December 2023 amounted to € -158.6 million (net debt), from € -177.4 million in 2022, due to an IFRS 16 debt component of € -72.5 million. The Adjusted NFP/EBITDA ratio is 1.0x, exactly in line with the target communicated to the market and down from 1.3x at the end of 2022.

At € 68.7 million, cash flow from ordinary activities (after cash-outs due to financial expenses and taxes) for the financial year 2023 is 15.1% higher than the figure for 2022 and is at the high end of the guidance (EUR 65-70 million).

As of 31 December 2023, the extraordinary cash flow was negative by € 15.3 million, mainly due to net cash-outs related to merger & acquisition activities of around € 5 million and restructuring costs of around € 5 million.

Free Cash Flow as of 31 December 2023 was positive at € 53.5 million and confirms the Group’s ability to finance its inorganic growth policy and the distribution of significant dividends to shareholders.

As of 31 December 2023, the Mondadori Group employed 1,945 people, an increase of 2.4% compared to the 1,900 employed at 31 December 2022 (+45 people).

PERFORMANCE OF BUSINESS AREAS

Trade BOOKS AREA

Following the consolidation phase in 2022, in 2023 the book market showed further growth in value of 3.4% and a substantial stability in volume. In the fourth quarter, the value increased by 5.7% thanks to the excellent earnings recorded during the Christmas season.

In this context, the Mondadori Group’s publishing houses grew by 3.7% across 2023, outperforming the market of reference – particularly thanks to the excellent earnings achieved in the first and fourth quarters from the publication of titles such as Spare – Il minore (“Spare”). by Prince Harry, Le armi della luce (“The Weapons of Light”) by Ken Follett, published by Mondadori, and La vita intima by Nicolò Ammaniti, published by Einaudi -, and consolidate their leadership nationally with a market share of 27.6% at the end of 2023.

Revenues for 2023 amounted to € 374.3 million, having grown by around 10.4% compared to the previous year, also due to the consolidation of the recently acquired companies (A.L.I. and Star Comics).

Adjusted EBITDA was € 59.2 million: net of the reliefs relating to Electa’s museum activities, amounting to € 6.4 million, from which the 2022 financial year had benefited, the area recorded an increase in its margin of around 22% (+ € 10.5 million), largely attributable to the contribution of the new companies consolidated from 2023, despite the negative impact of the higher cost of paper compared to the previous period. The profitability achieved by the Trade Books area was 15.8% in 2023, showing improvement on 2022, excluding the contribution of the reliefs (14.4%).

Education BOOKS AREA

The Schools market (primary and secondary schools) in Italy in 2023 is estimated to have grown by around 3.5% on the previous year to approximately € 618 million.

In the 2023 financial year, the Mondadori Group’s publishing houses confirmed their leadership at national level, with a 32% share of the set texts market, substantially stable compared to 2022, due to growth in the secondary school segment (middle and high schools) and a decline in primary schools.

Revenues in the area were € 237.5 million (€ 237.3 million in 2022), stable compared to the previous year. In particular, lower and upper secondary school revenues, which account for over 80% of the area’s revenues, grew by around 5%, versus a fall in primary school revenues (-6.5% compared to 2022). In addition to the above, there was a decline of approximately 6% in the distribution and sale of third-party products by Rizzoli Education (dedicated to the teaching of foreign languages) and a contraction in sales of non-set text products.

The area’s Adjusted EBITDA in 2023 was € 67.7 million, a distinct improvement on the € 63.5 million recorded in 2022 (+6.7%), thanks to the contribution of all publishing houses and the full completion of the synergies resulting from the integration of D Scuola.

The 28.5% profitability in 2023 was higher than that recorded in 2022 (26.7%) thanks to the lower incidence of industrial costs – as a result of the lower cost of paper purchases, down by around € 4 million – and promotional costs.

RETAIL AREA

In a context of growth in the Italian market, there was an improvement in the physical channel (+4.3%) and a recovery in the online channel, which saw a gradual recovery in the fourth quarter, closing the year with an increase of 2%.

In 2023, Mondadori Retail grew by 5.6%, outperforming the market of reference for the third consecutive year. Thanks to this result, which was due to the excellent performance of physical shops, Mondadori Retail’s market share grew to 12.8% (+0.3% compared with 31 December 2022) of the total market and was close to 20% of the physical market. The ongoing development and renovation of existing stores and the focus on the core business of books enabled the Mondadori bookshop network to consolidate its role in the market.

The transformation process launched over the past years has made for an improvement in operating and management performance, as shown in the income statement for 2023, which highlights strong growth in revenue and margins of the Retail area.

Revenues amounted to € 199.5 million, up 5.4% (+ € 10.3 million) on the previous year, the highest value recorded since the pre-pandemic year 2019.

An analysis of sales by channel shows further growth in revenues from direct bookshops (+10.3% compared with the previous year), franchised bookshops (+4.5% compared with 2022) and the online channel (+3.1% compared with the previous year).

Books, the Mondadori Group’s core business, provided the greatest revenues (over 80% of the total), having grown overall by 6.1% compared with 2022, driven by the excellent performance of physical stores; the non-book turnover recorded a positive trend (+14.4% compared with 2022), thanks to growth in the impulse sector (stationery and gifts).

The area shows a positive Adjusted EBITDA of € 14 million, up by more than 50% compared to 2022 (+ € 4.9 million), confirming a gradual improvement in performance (in 2019, Adjusted EBITDA was € 5 million).

It is important to note that the area’s 2023 income statement returned to profit after more than a decade, closing with a positive net profit of € 1.5 million, an improvement of € 3 million compared to the loss of € -1.4 million in 2022.

MEDIA AREA

In 2023, the Mondadori Group confirmed its position as Italy’s leading multimedia publisher: in print, with 13 magazines and 9 million readers and a market share (in terms of circulation) of 20.3%, slightly up – on a like-for-like portfolio of titles – compared with December 2022 (19.8%); online, with 12 brands and an average of around 28 million unique users/month; in social media, with more than 110 profiles and a fanbase of around 103 million as of 31 December 2023.

In the financial year 2023, revenues in the Media area amounted to € 141 million, down by 20.6% compared to the previous year. On a like-for-like basis, this contraction was reduced to 2.7% by the positive performance achieved in the fourth quarter of the year (+7% approximately) and highlights different trends in the two components: digital and print.

Digital activities, which account for around 40% of total turnover for the area, recorded an increase in advertising revenues of around 23%, mainly due to the positive performance of the MarTech segment; print activities fell by 14.8%, mainly due to the decline in add-on sales for the entire year caused by the decision to reduce releases in low-margin products such as music and home video.

Adjusted EBITDA amounted to € 16.4 million, about +16% year-on-year, attributable to both business segments. The EBITDA margin recorded an increase of almost 4 percentage points, from 7.9% to 11.7%. Specifically: in the print area, the increase was due to the rationalisation of the portfolio of activities with more stable profitability, the constant attention being paid to the development and rationalisation of costs, as well as the recognition of a tax credit to partially offset the costs incurred by the publisher for magazine distribution activities; in the digital area, adjusted EBITDA increased by approximately € 1 million compared to the previous year, thanks to higher revenues and the contribution of new initiatives, despite the earnings from the digital activities of the magazines sold being removed from the consolidation scope.

OUTLOOK FOR THE YEAR

The Group’s current configuration, economic performance and cash generation capacity, also demonstrated in 2023, point to a further improvement in results for 2024, even on a like-for-like basis.

From a strategic point of view, the Group intends to continue the process of strengthening its core business in the Trade Books area, both in publishing, by emphasising the identity and specialisation of the various publishing houses, and by continuing the process of vertical integration in the various stages of the book chain, particularly in the comics segment, by taking full advantage of the distribution synergies arising from the acquisition of Star Shop.

In the Education Books area, it will continue to focus on the most profitable segments of the textbook market and consolidating its domestic leadership, strengthening and renewing its editorial offer and taking full advantage of the digital convergence process (through the development of a new single digital platform for all three publishing houses).

In the Retail area, the Mondadori Group will continue with the selective development of its network of shops, both direct – by opening around ten new outlets – and franchised, as well as with improving the sales surface area, maximising the efficiency of the network and enriching its range of publications, which is essential both to increase the profitability of the area and to improve its effectiveness in conveying the Group’s editorial offer to the market.

In the Media area, the Mondadori Group will at the same time continue to strengthen its competitive positioning by developing its skills and offer in the digital area, in particular through initiatives in the content creator, Food and MarTech segments.

Income Statement

The following are the Group’s economic and financial targets for the financial year 2024, based on a consolidation scope that includes only completed extraordinary transactions (Star Shop):

• low single-digit revenue growth;
• mid single-digit growth in the Adjusted EBITDA, with margins expected to remain stable at around 17%, thanks to targeted pricing policies and the further reduction of paper and printing costs.

At the end of the next three-year period, i.e. in the financial year 2026, with the consolidation scope described above and therefore with the only organic growth, the Group estimates that it will be able to achieve consolidated revenues in the region of € 1 billion and a proportional growth in margins that will enable it to confirm profitability approximately at 17%.

Cash Flow and Net Financial Position

In the three-year period 2024-2026, the Group is expected to confirm the significant cash generation capacity shown in 2023 and therefore cash flow from ordinary operations of no less than € 70 million.

DIVIDEND POLICY

The Group’s significant cash generation over the next three years will be allocated to maximising the company’s value creation, through an active investment policy in its core and adjacent businesses aimed at seizing opportunities to strengthen its leadership, expand geographically and/or expand its presence within the book value chain. This development strategy will be accompanied by an increasing shareholder remuneration policy, through a more consistent Dividend Policy that provides for, each year of the three-year-period, the distribution of 50% of the Ordinary Cash Flow per share (from the previous 40%) or the Dividend per Share of the previous year increased by 10%, whichever is the greater.

Each year, the Board of Directors, when proposing the distribution to the Shareholders’ Meeting, will take account of the general macroeconomic scenario, as well as the expected cash flows and the Group’s equity and financial structure.

PERFORMANCE OF ARNOLDO MONDADORI EDITORE S.P.A.

The Parent Company’s income statement at 31 December 2023 shows the same profit as in the consolidated financial statements of € 62.4 million (€ 52.1 million in 2022), due to the fact that the Company has chosen to use the equity method to measure its investments in the separate financial statements.

Revenues, which consist of the costs of central structures charged back to the subsidiaries, amounting to € 43.1 million, increased by about 3% compared to the previous year, due to higher charges (related to IT services and occupied space) resulting from the expansion of the Group’s consolidation scope and the respective offices.

Adjusted EBITDA in 2023 was € -5.6 million, essentially stable compared to 2022 (€ -5.7 million in 2022).

Reported EBITDA for 2023 was € -7.5 million, down from 2022 (€ -6.7 million), mainly due to higher allocations related to restructuring costs.

DIVIDEND DISTRIBUTION PROPOSAL OF € 0.12 PER ORDINARY SHARE

Based on the results of the 2023 financial year, the Board of Directors will submit a proposal to the next Shareholders’ Meeting, convened on 24 April 2024, for the distribution of a dividend per share of € 0.12, gross of withholding taxes, for each ordinary share (net of treasury shares) outstanding at the record date.
The total dividend amounted to approximately € 31 million, up by 9% compared to the previous year: this amount corresponds to a pay-out of 50% of the net profit for 2023 and a dividend yield of almost 6% (as of 31 December 2023). The amount will be paid by drawing on the distributable portion of the extraordinary reserve (included in the equity item “Other reserves profit/loss carried forward”).
In compliance with the provisions of the “Regulations for markets organised and managed by Borsa Italiana S.p.A.” and as already announced, the dividend will be paid in two equal tranches:

• unit amount of € 0.06 for each ordinary share (net of treasury shares) outstanding at the record date stated below, from 22 May 2024 (payment date), with ex-dividend date no. 23 on 20 May 2024 (ex date) and with the date of entitlement to payment of the dividend, pursuant to Article 83-terdecies of the TUF (record date), on 21 May 2024;
• unit amount of € 0.06 for each ordinary share (net of treasury shares) outstanding on the record date stated below, from 20 November 2024 (payment date), with ex-dividend date no. 24 on 18 November 2024 (ex date) and with the date of entitlement to payment of the dividend, pursuant to Article 83-terdecies of the TUF (record date), on 19 November 2024.

SIGNIFICANT EVENTS AFTER YEAR-END 2023

On 1 February 2024, through its subsidiary Mondadori Libri S.p.A., the Mondadori Group finalised the acquisition of 51% of the share capital of Star Shop Distribuzione S.r.l., which operates in the comic book and gadget segment and is particularly active in the distribution of third-party publishers in the comic book shop channel and in the management of sales outlets – direct and affiliated – in the same segment. As communicated to the market on 29 June 2023, following authorisation by the Italian Antitrust Authority pursuant to Law 287/1990 – as previously announced on 3 November 2023 -, the transaction is effective from 1 February 2024, as of which Mondadori will also proceed with the line-by-line consolidation of the company.

PROPOSED RENEWAL OF THE AUTHORIZATION TO PURCHASE AND DISPOSE OF TREASURY SHARES

Following expiry of the previous authorization resolved upon by the Shareholders’ Meeting on 27 April 2023, with the approval of the financial statements at 31 December 2023, the Board of Directors will propose to the next Shareholders’ Meeting, called for 24 April 2024, the renewal of the authorization to purchase and dispose of treasury shares with the aim of retaining the applicability of law provisions in the matter of any additional buyback plans and, consequently, of seizing any investment and operational opportunities involving treasury shares.
Below are the main elements of the Board of Directors’ proposal, which are consistent with those of the expired authorization:

• Motivations

The motivations underlying the request for the authorization to purchase and sell treasury shares refer to the opportunity to attribute to the Board of Directors the power to:

• use the Treasury Shares purchased or already in the Company portfolio as compensation for the acquisition of interests within the framework of the Company’s investments;
• use the treasury shares purchased or already held in portfolio against the exercise of option rights, including conversion rights, deriving from financial instruments issued by the Company, its subsidiaries or third parties and to use the treasury shares for lending, exchange or transfer transactions or to support extraordinary transactions on the Company’s capital or financing transactions that imply the transfer or sale of treasury shares;
• undertake any investments, directly or through intermediaries, including for the purpose of containing abnormal movements in share prices, stabilizing share trading and prices, supporting the liquidity of the share on the market, in order to foster the regular conduct of trading beyond normal fluctuations related to market performance, without prejudice in any case to compliance with applicable statutory provisions;
• rely on investment or divestment opportunities, if considered strategic by the Board of Directors, also in relation to available liquidity;
• dispose of treasury shares to service share-based incentive plans set up pursuant to Article 114-bis of the TUF, and plans for the free allocation of shares to employees or members of the governing bodies of the Company or to Shareholders.

• Duration

The authorization to purchase treasury shares runs from the date of any resolution approving the proposal by the Shareholders’ Meeting, until the Shareholders’ Meeting called to approve the financial statements at 31 December 2024 and, in any case, for a period no more than 18 months after that date. The authorization to dispose of treasury shares is requested for an unlimited period, given the absence of time limits pursuant to current regulations and the opportunity to allow the Board of Directors to make use of the maximum flexibility, also in terms of time, to carry out any disposal of shares.

• Maximum number of purchasable treasury shares

The authorisation would allow the purchase, on one or more occasions and in one or more tranches, of a maximum number of ordinary shares with a nominal unitary value of € 0.26, which – considering the treasury shares already held by the Company and the shares that may possibly be acquired by subsidiaries – shall not exceed a total of 10% of the share capital.
Pursuant to article 2357(1) of the Italian Civil Code, the purchase transactions will be carried out within the limits of the distributable profits and available reserves resulting from the last regularly approved financial statements at the time of each potential purchase transaction. The authorisation would include the right to subsequently dispose of the treasury shares acquired, in whole or in part, on one or more occasions and even before having exhausted the maximum number of purchasable shares.

• Criteria for purchasing treasury shares and indication of the minimum and maximum purchasing cap

Purchases would be made in accordance with articles 132 of the TUF, 144-bis(1)(b) and d-ter) of the Issuers’ Regulation, and thus:
(i) on regulated markets or multilateral trading systems, according to the operating criteria established in the organisation and management regulations of the same markets, which do not allow the direct matching of purchase trading proposals with predetermined sales trading proposals, as well as in compliance with any other legislation in force, including European ones.
(ii) by the methods established by the market practices permitted by Consob, pursuant to the combined provisions of article 180(1)(c) of the TUF and article 13 of Regulation (EU) no. 596 of 16 April 2014 (“Permitted Market Practices”).
Additionally, share purchase transactions may also be carried out in the manner envisaged in Article 3 of EU Delegated Regulation no. 2016/1052 in order to benefit, if the conditions are met, from the exemption under Article 5, paragraph 1, of EU Regulation no. 596/2014 on market abuse with regard to inside information and market manipulation.
The disposal of treasury shares may be made, on one or more occasions and even before having terminated the maximum number of purchasable treasury shares, either by selling them on regulated markets or according to other trading methods in compliance with the law, including EU law, in force and with the Admitted Market Practices, if applicable. The authorisation proposal provides that purchases are made at a unit price, compliant with any regulatory requirements, including European ones, or permitted market practices in force at the time, where applicable, without prejudice to the fact that the minimum and maximum purchase price will be set at a unit price no lower than the official stock market price of the Mondadori stock on the day prior to the day on which the purchase transaction is carried out, decreased by 20%, and no higher than the official stock market price on the day before the day on which the purchase transaction will be carried out, increased by 10%. In any event – except for any different price and volume determinations resulting from the application of the conditions set forth in the Admitted Market Practices – such price shall be identified in accordance with the trading conditions set forth in Delegated Regulation (EU) no. 1052 of 8 March 2016 and, specifically:

• no shares may be purchased at a price higher than the higher between the price of the last independent trade and the price of the highest current independent bid on the trading venue where the purchase is carried out; and
• in terms of volumes, daily purchase amounts will not exceed 25% of the daily average volume of Mondadori shares traded as recorded in the 20 trading days before the dates of purchase or in the month prior to the month of the disclosure required by Art. 2, paragraph 1, of Regulation (EU) no. 1052/2016.
• In terms of consideration, sales transactions or other acts of disposition of treasury shares shall be carried out:
• if executed in cash, at a price no lower than 10% of the reference price recorded on the MTA – Euronext Milan – organized and managed by Borsa Italiana S.p.A. in the trading session prior to each single transaction;
• if executed as part of any extraordinary transactions in accordance with financial terms to be determined by the Board of Directors on the basis of the nature and characteristics of the transaction, also taking account of the market performance of Mondadori shares;
• if executed to service the Performance Share Plans in compliance with the terms and conditions set out in the resolutions of the Shareholders’ Meeting that establish the Plans and the related regulations.

To date, Arnoldo Mondadori Editore S.p.A. holds a total of no. 1,277,802 treasury shares, equal to 0.488% of the share capital.

For further information on the proposed authorization for the purchase and disposal of treasury shares, reference should be made to the Directors’ Explanatory Report, which will be published within the time limits and in the manner prescribed by applicable regulations.

GRANTING OF SHARES UNDER THE 2021-2023 PERFORMANCE SHARE PLAN: INFORMATION PURSUANT TO ART. 84-BIS, PARAGRAPH 5 CONSOB REGULATION NO. 11971/1999

The Board of Directors, based on the final assessment of the achievement of the Performance Targets underlying the Plan, and having heard the Remuneration and Appointments Committee, resolved to allocate a total of no. 729,331 Arnoldo Mondadori Editore S.p.A. shares to a total of 13 beneficiaries, implementing the provisions of the “2021-2023 Performance Share Plan” adopted by the Shareholders’ Meeting on 27 April 2021 (the “2021-2023 Plan”).

Mention should be made that the 2021-2023 Plan takes the form of a share granting plan and grants its beneficiaries the right to receive, free of charge, shares in the Company held as treasury shares provided that, at the end of a reference period of three financial years, the performance targets set in the same Plan have been achieved.

The beneficiaries of the 2021-2023 Plan are the Chief Executive Officer, the CFO and 11 managers identified by name by the Chief Executive Officer, as delegated by the Board of Directors.

The characteristics of the Plan are explained in detail in the Directors’ Report to the Shareholders’ Meeting of 27 April 2021 and in the information document drawn up pursuant to article 84-bis of CONSOB Regulation no. 11971/1999 available at www.gruppomondadori.it, Governance section, to which reference should be made.

Attached is the information required by Schedule 7 of Annex 3A to CONSOB Regulation no. 11971/1999 to account for the allocation of shares in the context of the 2021-2023 Performance Plan.

PROPOSED ADOPTION OF A PERFORMANCE SHARE PLAN COVERING THE THREE-YEAR PERIOD 2024-2026

The Board resolved, on a proposal from the Remuneration and Appointments Committee, and continuing to apply the performance share instrument for the medium-long term remuneration of executive directors and strategic executives, as per Legislative Decree 58 of 24 February 1998, art. 114-bis, to submit for approval by the Shareholders’ Meeting, convened for 24 April 2024, the establishment of a Performance Share Plan for the three-year period 2024-2026, reserved for the Chief Executive Officer, the CFO – Executive Director and a number of Company Managers who have an employment and/or directorship relationship with the Company or with its subsidiaries on the granting date of the shares.
With the adoption of the Plan, the Company aims to encourage Management to improve medium to long-term performance, in terms of both industrial performance and growth in the value of the Company.
The Plan envisages the assignment to the beneficiaries of rights to the free allocation of company shares, subject to the achievement of specific performance targets set and measured at the end of the three-year performance period.
These targets are structured to include both shareholder remuneration indicators and management indicators functional to raising the share value, ensuring maximum alignment of Management remuneration and the creation of value for the Company, as well as indicators of a non-operating/financial nature linked to ESG issues.
For details on the proposed adoption of the 2024-2026 Performance Share Plan, the beneficiaries and the characteristics of said Plan, reference should be made to the Information Document approved by the Board of Directors, pursuant to Article 84-bis and annex 3A of the Issuer Regulation, and to the Explanatory Report, which will be published within the time limits and in the manner prescribed by applicable regulations.

PROPOSAL TO THE SHAREHOLDERS’ MEETING TO ADOPT A SHORT-TERM INCENTIVE PLAN (MBO) 2024

On a proposal from the Remuneration and Appointments Committee, the Board resolved to submit the adoption of a Short Term Incentive Plan (MBO) for the year 2024 to the Ordinary Shareholders’ Meeting for approval, pursuant to Article 114-bis of Legislative Decree no. 58 of 24 February 1998. The Plan, which is reserved for the same beneficiaries as the 2024-2026 Performance Share Plan, governs the determination, subject to the achievement of specific individual and Group performance objectives, of the annual Variable Remuneration (MBO) for the year 2024. In particular, the Plan envisages a voluntary mechanism for the conversion into Mondadori shares of a percentage component equal to 15% or 30% of the Variable Remuneration itself, as well as the disbursement of an additional “bonus” component in shares, equal to the number of shares resulting from the conversion.

Any allocation of the total component in shares would take place at the end of a 24-month deferral period with respect to the MBO vesting date.

For details on the proposed adoption of the 2024 Short-term Incentive Plan (MBO), the beneficiaries and the characteristics of said Plan, reference should be made to the Information Document approved by the Board of Directors, pursuant to Article 84-bis and annex 3A of the Issuer Regulation, and to the Explanatory Report, which will be published within the time limits and in the manner prescribed by applicable regulations.

PROPOSAL TO RENEW THE POWERS OF THE BOARD OF DIRECTORS PURSUANT TO ARTICLES 2443 AND 2420-TER OF THE ITALIAN CIVIL CODE

The Board of Directors will propose the Shareholders’ Meeting, called on 24 April 2024, also in extraordinary session, to adopt the resolutions referred to in articles 2443 and 2420 ter of the Italian Civil Code, relating to the renewal of the Board’s powers to increase the share capital and issue convertible bonds.
Specifically, the Board will propose to the Shareholders’ Meeting:

– the renewal of the proxies already granted to the Board of Directors by the Extraordinary Shareholders’ Meeting of 17 April 2019 and terminating due to expiry of the related five-year term, which, pursuant to Articles 2443 and 2420-ter of the Italian Civil Code, grant the Board of Directors the power to increase the share capital, reserved as an option to those entitled thereto, by a maximum nominal amount of € 75,000,000 and to issue convertible bonds for a maximum nominal amount of € 250,000,000.

– the renewal of the proxy already granted to the Board of Directors by the Extraordinary Shareholders’ Meeting of 17 April 2019 and also terminating, granting the Board of Directors, for the same period of five years, the power to increase the share capital within the limit of 10% of the pre-existing share capital and in any case within the limit of a nominal amount of € 20,000,000, with the exclusion of option rights pursuant to Articles 2443 and 2441(4) of the Italian Civil Code.

The renewals are proposed under the same conditions of the terminating proxies unused by the Board and for a further period of five years corresponding to the maximum term allowed by the law.

The proposals for the renewal of proxies are motivated by the advisability of maintaining the general power of the Board of Directors to implement any capital transactions through faster and more streamlined procedures than the resolutions adopted by the Extraordinary Shareholders’ Meeting.

CONSOLIDATED NON-FINANCIAL STATEMENT PURSUANT TO LEGISLATIVE DECREE 254/2016

Under Legislative Decree 254/2016, the Board of Directors’ 2023 Report on Operations of the Mondadori Group is also composed of the Consolidated Non-Financial Statement (NFS), a qualitative-quantitative description of the non-financial performance of the Company, associated with environmental, social, and staff-related issues, as well as those regarding respect for human rights, and the fight against corruption and bribery, which are relevant given the activities and characteristics of the Company.

The NFS was prepared in accordance with GRI Standards: In accordance option, and includes benchmark KPIs related to GRI G4 “Media Sector Disclosure”.
With regard to 2023, the Mondadori Group has updated its materiality analysis, consistent with the principles set out by the GRI Sustainability Reporting Standards (GRI Standards) and the reporting scopes laid down by Legislative Decree 254/2016.
In 2023, stakeholder engagement was pursued through the involvement of employees, teachers, bookshop customers, suppliers and financial analysts and investors, with more than 4,500 responses to the engagement questionnaire.

The document also includes the references required by Regulation (EU) 2020/852 related to the introduction of the European Taxonomy.

SUSTAINABILITY PLAN

Actions and initiatives in the ESG area are highlighted as part of the reporting activity. In 2023, constant monitoring of the goals set in the Sustainability Plan was carried out, which made it possible to provide a timely image of the degree to which they were achieved and to identify new future actions for the 2024-2026 Plan.
Below are the objectives achieved and reported for 2023.

Social

1. Preparation of the documentation for the Gender Equality Certification (UNI PDR 125/2022), with Audit scheduled for 2024.
2. Development and implementation of a training plan specifically for D&I with half-yearly seminars for all Mondadori Group people.
3. Launch of the “Care” project for all Group employees and families, with particular focus on the “Parenthood” project to promote more inclusive models of access to maternity/paternity leave, eliminate existing biases and facilitate the return to work, enhancing acquired skills.
4. Review of internal procedures governing selection with the introduction of blind CVs.
5. Review of the internal procedures governing recruitment and career development, with particular attention to D&I matters.
6. Extension of training in digitalisation/new forms of work to all Group employees.
7. Implementation of a training plan accessible to all Group personnel regarding sustainability issues.
8. Establishment of a new Group Charter of Values.
9. Extension to 100% of the school offer of contents/insights relating to Sustainability, the 2030 Agenda for Sustainable Development, diversity, equity and inclusion and civic education.
10. Expansion of ESG training activities for the Group’s school publications departments and for teachers.
11. A growing number of initiatives/services to promote reading.

Governance

1. Setting and measurement of quantitative and measurable ESG-related LTI objectives for top management (Impact Inclusion Index in the 2023-2025 Performance Share Plan).
2. Strengthening of the set of procedures and coverage of the areas of Privacy, Information Management and Cyber Security.
3. Strengthening of the programmes aiming to protect intellectual property/copyright.
4. Strengthening of stakeholder engagement activities through the gradual expansion of engagement initiatives.

Environment

1. Extension of the electricity supply from renewable sources to sites (Segrate) and stores (Mondadori Duomo and Turin).
2. Energy efficiency actions through improved management of electrical and mechanical systems at the Segrate site.
3. Energy efficiency actions as part of direct book store renovation/opening initiatives and obtaining LEED certification (gold) for Mondadori Duomo.
4. Finalisation of the “Book environmental footprint” project study: Life-Cycle Assessment (LCA) study for measuring environmental impacts and establishing data-based objectives for reducing atmospheric emissions and achieving continuous improvement along the entire value chain.
5. Maintenance of the commitment to purchase ≈100% of paper from certified PEFC/FSC sources for Mondadori Group products with extension to newly acquired companies.
6. Extension to 100% of the School proposition of insights and fact sheets dedicated to environmental culture of the entire school offer and promotion of such content in the Trade proposition.

No legal action was initiated or concluded against the Group or its employees for cases of corruption during the year, nor were any reports made within the whistleblowing system.

The results for the year ended 31 December 2023, approved on today’s date by the Board of Directors, will be presented by the Mondadori Group Management to the financial community at a presentation scheduled for 3:30 p.m. today in person and via webcast. The corresponding documentation will be available on 1Info (www.1info.it), at www.borsaitaliana.it and at www.gruppomondadori.it (Investors section). Journalists will be able to follow the proceedings of the presentation via webcast, by dialling +39 02 802 09 27 and via web https://www.c-meeting.com/web3/join/MKRA9NDNUBPJNA.

The Financial Reporting Manager – Alessandro Franzosi – hereby declares, pursuant to Article 154 bis, paragraph 2, of the Consolidated Finance Law, that the accounting information contained herein corresponds to the Company’s records, books and accounting entries.

Annexes (in the complete pdf):

1. Consolidated Statements of Financial Position
2. Consolidated Income Statement
3. Consolidated income statement – fourth quarter
4. Group cash flow
5. Arnoldo Mondadori Editore S.p.A. Statements of financial position
6. Arnoldo Mondadori Editore S.p.A. income statement
7. Arnoldo Mondadori Editore S.p.A. statement of cash flows
8. Glossary of terms and alternative performance measures used
9. Information pursuant to Schedule 7 of Annex 3a to CONSOB Regulation no. 11971/1999.

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the Interim Management Statement at 30 September 2023 presented by Chief Executive Officer Antonio Porro.

“The Mondadori Group has recorded excellent results and a sharp increase in profitability in the first nine months of 2023, attributable to the pursuit of a meticulous management of operations, the contribution of recent acquisitions and the synergy arising from their integration, which allowed for an improvement in the performance of all business areas and a capital strengthening of the Group. We can therefore confirm what was announced on 29 June in terms of expected results for the ongoing year, namely an economic and financial improvement”, said Antonio Porro, CEO of the Mondadori Group.

Performance at 30 September 2023

Consolidated revenue for the first nine months of 2023 amounted to € 679.9 million versus € 678.2 million in the first nine months of 2022, growing by 0.3%. Like-for-like, organic revenue growth came to 1.1%.

Adjusted EBITDA for the first nine months of 2023 was € 129.3 million, an increase of around € 14 million on the € 115.5 million recorded for the same period in 2022.

Netting the results for the respective periods in question of the reliefs and contributions respectively paid, the growth recorded by Group’s EBITDA would exceed € 17 million.

All business areas contributed to the result, especially the Trade BOOKS Area, due in particular to the effect of the consolidation of the results of the recently acquired companies, the Education BOOKS Area and the RETAIL Area.

Group EBITDA for the first nine months of the current year amounted to € 131.5 million, compared to € 114.5 million at 30 September 2022, an improvement of approximately € 17 million attributable to the operating dynamics and the recognition in the current year, in the MEDIA Area, of the net capital gain resulting from the sale of the titles Grazia and Icon (and the related international network).

Thanks to the positive performance of all business areas, the Mondadori Group’s EBIT for the first nine months of 2023, positive for € 90.5 million, showed an improvement of € 12.5 million compared to 2022. The result was achieved despite the booking of approximately € 4 million in higher depreciation/amortisation resulting from the greater investments made in the last 12 months, the consolidation of new companies (€ +1.0 million) and the accounting effects of the PPA (Purchase Price Allocation) process (€ +1.2 million compared to the first nine months of 2022).

Neutralising extraordinary items and the impact of the PPA process related to the companies acquired in the last 24 months, Adjusted EBIT would amount to € 92.1 million, up by more than € 10 million (+12.9%) compared to the same period of the previous year.

Financial expense grew by over € 3 million, of which around € 2 million as a result of the higher cost of debt.

The consolidated result before tax was positive at € 87.1 million, an improvement of about € 11 million compared to € 75.8 million in the first nine months of 2022. The over € 2 million improvement in the profits of associates, in addition to the information already noted, contributed to this performance, particularly as a result of the update in the fair value measurement of the investment in the company A.L.I. and the recognition of a capital gain of € 0.4 million from the sale of the residual investment in SEE, the publishing company of Il Giornale.

The Group’s net profit at 30 September 2023, after minority interests, was positive for € 66.3 million and showed a significant improvement of € 8 million (around 14%) versus € 58.3 million recorded in first nine months of 2022.

Tax costs in the period totalled € 20.5 million versus € 17.6 million at 30 September 2022 due to the higher pre-tax result.

The Group’s capital structure grew stronger still: the Net Financial Position excluding IFRS 16 at 30 September 2023 amounted to € -152.3 million (net debt), an improvement of over € 20 million versus € -173.4 million at 30 September 2022, as a result of the relevant cash generation of the business and despite the cash-out relating to acquisitions made during the last 12 months and the distribution of dividends in May 2023 for around € 29 million.

The IFRS 16 Net Financial Position came to € -223.9 million, from € -235.7 million recorded at 30 September 2022, including an IFRS 16 component of € -71.6 million.

At 30 September 2023, cash flow from ordinary operations in the last 12 months came to € 64.6 million, while cash flow from extraordinary operations was negative for € 13.2 million.

Consequently, LTM Free Cash Flow at 30 September 2023 was positive for € 51.4 million, confirming the Group’s capacity to finance its growth policy by external lines.

Performance of Business Areas

Trade Books Area

Following the consolidation phase of 2022, 2023 showed further growth in the book market for 2.3% (in terms of value) and a substantial stability in terms of volume compared to 2022. The third quarter in particular showed a 1.6% increase in terms of value (source: GFK, September 2023).

In this context, the Mondadori Group’s publishers recorded growth of 2.2% in the first nine months, which is in line with the reference market, despite the third quarter of 2022 having benefited from a strong publishing plan. Thanks to this performance, Mondadori has consolidated its national leadership position, with a market share which, in September 2023, remained stable at 27.3%.

Revenue in the first nine months of 2023 in the Trade BOOKS Area stood at € 268 million, increasing by 14% compared to the same period in 2022.

Adjusted EBITDA in the first nine months of 2023 amounted to € 41 million: net of reliefs relating to Electa’s museum activities (€ 6.4 million), which had benefited in 2022, the area recorded growth of 23% (€ 7.6 million), largely attributable to the contribution of the newly acquired companies in the current year.

The profitability at 30 September 2023 achieved by the Trade BOOKS Area was approximately 15%, showing improvement on the same period in 2022, excluding the contribution of the reliefs (14%).

Education Books Area

The Mondadori Group’s publishing houses in the context of school textbooks achieved a market share (adoption) of 32%, substantially stable compared to the figure reported in the previous year, with growth in the secondary school segment (upper and lower secondary schools) and a decrease in primary, characterised by higher volatility and lower profitability.

In the first nine months of 2023, the school textbooks business reported overall revenue of € 215.5 million (€ 213.7 million in the corresponding period of 2022), increasing by 0.8% despite a partial delay in the distribution activities.

In particular, an analysis of the trend by school level shows how revenue from first- and second-level secondary school – accounting for 80% of the area’s revenue – has grown by around 3%, with a trend offset by the decrease recorded by primary school (-7.9% compared to the same period in 2022), in line with the adoption trend reported. As expected, the sales of third-party publishers distributed by Rizzoli Education fell by 7%.

Adjusted EBITDA of the Education BOOKS Area in the first nine months of the year stood at € 73.9 million, a clear improvement compared to € 68.1 million in the corresponding period of financial year 2022 (+8.5%), mainly due to a different and more favourable mix of revenue and a lower percentage of product cost and promotional costs.

Retail Area

As already mentioned, the book market in Italy in the first nine months reported a 2.3% growth compared to the same period in 2022; in this context, the physical channel grew by +4.8% while the online channel declined (estimated at -1.6%), even if gradually recovering in the third quarter of 2023 compared to the figure from the corresponding period of 2022.

In the first nine months of 2023, Mondadori Retail recorded a 5.7% increase in book sell-out in stores; thanks to this overperformance, driven by excellent performance reported by physical stores, Mondadori Retail’s market share stood at 13% of the total market, +0.4% on 30 September 2022, and almost came to 20% of the physical market.

In the first nine months of the year, the RETAIL Area reported revenue of € 133.4 million, up by € 7.4 million (+5.9%) versus the same period of the prior year. The ongoing development and renovation of existing stores and the focus on the core business of books have enabled the Mondadori Store network to consolidate its role in the market, as demonstrated by the solid growth in revenue from the book product.

An analysis of sales by channel shows a further increase in revenue from directly-managed bookstores (+12.8% compared to the same period in the previous year) and franchisee bookstores (+4.0% compared to 30 September 2022) and, at the same time, a decline in the Online and Bookclub channels.

As far as the product categories are concerned:

• the book area was the main component of revenue (more than 80% of the total), up comprehensively by +6.6% compared to 2022, driven by the excellent performance of physical stores;
• Extra-Book sales were on a positive trend (+14.7% versus the first nine months of 2022) confirming the excellent signs arising in the last year, due to the growth in the stationery, games, gifts and music.

The RETAIL Area had a positive Adjusted EBITDA of € 8.3 million, a value that has doubled compared to the figure for the first nine months of 2022 (€ +4.2 million).

Media Area

In the first nine months of 2023, the MEDIA Area recorded revenue of € 101.5 million, a reduction of approximately 25% on the same period of the previous year. On a like-for-like basis (thus excluding the effect of the deconsolidation of the titles sold at the beginning of 2023 and of Press-di’s distribution activities), this reduction is smaller by around 6% thanks to the performance of near stability achieved in the third quarter of the year and shows different trends in the two digital and print components.

The Digital Area, which accounts for over 37% of the area’s overall revenue, showed an increase in advertising revenue of around 20%, deriving in particular from the positive performance of MarTech; the Print Area fell by around 16%, mainly due to the significant drop in add-on sales in the period.

In the first nine months of 2023, the Mondadori Group retained its position as Italy’s top multimedia publisher: in print with 13 titles and 9 million readers; on the web with 12 brands and approximately 27.7 million average unique users per month; on social media with 100 profiles and a fanbase of around 100 million.

In the magazine segment, the Group’s market share (in terms of circulation) stood at 20.3%, up slightly – with a like-for-like portfolio of titles – versus the figure in the same period of 2022 (19.8%), due to improved performance on that of the reference market.

Adjusted EBITDA in the MEDIA Area amounted to € 10.3 million, up by around 10% compared to the first nine months of 2022, mainly attributable to the traditional activities – which benefited from a contribution to offset the costs incurred by the publisher for the distribution of periodicals (€ 2.8 million) – which more than offset the decrease in the margin on sales of collateral items; in the Digital Area, Adjusted EBITDA is essentially stable on the same period in 2022 thanks to higher advertising revenue, despite the higher costs incurred for launching new initiatives tied to the influencer marketing segment and the deconsolidation of the result related to the digital activities of the titles sold.

Performance in Third Quarter 2023

Consolidated revenue for the third quarter of 2023 amounted to € 317.6 million (versus € 323.1 million the prior year), showing a slight decline compared with the same period of 2022 (-1.7%). Like-for-like, organic revenue performance recorded -1.2%.

Adjusted EBITDA for the third quarter of 2023 was € 91.1 million, an increase of almost € 3 million on the € 87.9 million recorded for the third quarter of 2022.

In the third quarter of 2023, EBIT closed with a positive € 76.5 million, showing an improvement of € 1.8 million.

Neutralising extraordinary items and the impact of the PPA process, Adjusted EBIT would stand at € 77.8 million, up by around € 2 million from € 75.9 million in the third quarter of 2022.

Outlook for the year

The forecasts previously communicated to the market on 29 June 2023 are confirmed, and reported in full below.

Income Statement

• single-digit revenue growth;
• high single-digit/low double-digit growth in Adjusted EBITDA, with margins expected to range between 16% and 17%;
• approximately 20% growth in net profit.

Cash Flow and Net Financial Position

• ordinary cash flow is expected to range between € 65 and 70 million, showing an increase of up to 15% compared to the figure from 2022;
• the Group’s net financial debt (IFRS 16) is confirmed to come in, at end FY 2023, as 1.0x adjusted EBITDA, down from 1.3x at end 2022.

The presentation of the results at 30 September 2023, approved today by the Board of Directors, is available on 1Info (www.1info.it), on www.borsaitaliana.it and on www.gruppomondadori.it (Investors section). A Q&A session will be held in conference call mode at 4.00 pm for the financial community, attended by the CEO of the Mondadori Group, Antonio Porro, and the CFO, Alessandro Franzosi. Journalists will be able to follow the meeting in listening mode only, by connecting to the following phone number +39.02.8020927 or via web at: https://hditalia.choruscall.com/?calltype=2&info=company.
The Financial Reporting Manager – Alessandro Franzosi – hereby declares, pursuant to Article 154 bis, paragraph 2, of the Consolidated Finance Law, that the accounting information contained herein corresponds to the Company’s records, books and accounting entries.

Annexes in the complete pdf:

1. Consolidated Statements of Financial Position
2. Consolidated Income Statement
3. Consolidated income statement – III quarter
4. Group cash flow
5. Glossary of terms and alternative performance measures used

Arnoldo Mondadori Editore S.p.A. hereby informs that the Half-Year Financial Report at 30 June 2023, comprising the Independent Auditors’ report, is now available at the Company’s registered office, at the authorized storage mechanism 1info (www.1info.it) and on the website www.gruppomondadori.it (Investors section).

Arnoldo Mondadori Editore S.p.A. announces receipt of the following statement:
“Further to the reading of Silvio Berlusconi’s last will and testament, Marina Berlusconi, chairman of the board, and Pier Silvio Berlusconi, director, inform that no shareholder will exercise overall individual indirect control of Fininvest S.p.A., previously exercised by their father himself.

The notary who read out the will is implementing the related legal requirements in the coming hours.”

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the Interim Management Statement at 31 March 2023 presented by CEO Antonio Porro.

1ST QUARTER 2023 HIGHLIGHTS

The first quarter of the current year was characterised by a positive trend in the book market which, following a consolidation phase experienced in 2022, recorded renewed growth with an increase in both value (+3%) and volume (+0.8%)[1].

“During this first quarter of 2023, the Mondadori Group recorded a significant improvement in profitability-  taking into account the seasonal nature of the schoolbook business – thanks to the positive performance of revenues and an increasingly careful approach to operative management. The excellent start to the year for the book market, the slight fall in the prices of raw materials and services, and the company’s performance allow us to confirm our estimates for the year, with revenues and Adjusted EBITDA growing by a single-digit and margins expected to be around 15%,” emphasised Antonio Porro, Chief Executive Officer of the Mondadori Group.

PERFORMANCE AT 31 MARCH 2023

Consolidated revenue in the first quarter of 2023 amounted to € 160 million, up by approximately 4.5% compared to € 153.1 million in the previous year. Net of changes in scope occurring between the two periods, the organic change in growth amounted to +3.6%.

Adjusted EBITDA came to € 4.4 million, showing a significant increase on the € -1.1 million of the first quarter 2022: both the growth in revenues, in particular of the Trade Books and Retail areas, and the consolidation of the results of the companies only recently acquired, contributed to the Group’s positive results.

The Group’s EBITDA came to € 4.7 million compared to € -0.7 million in the first quarter of 2022, an improvement of almost € 5.5 million, traceable to the favourable dynamics of the above management components.

EBIT is negative for € 8.2 million, showing an improvement of € 4 million on 2022, thanks to the positive operating performance of the businesses, despite the booking of € 1 million for greater amortisation/depreciation deriving from investments, from the consolidation of newly-acquired companies and the accounting effects of the Purchase Price Allocation process (PPA).

Excluding the extraordinary components and the impacts deriving from the PPA process relative to the companies acquired in the last 2 years (€ 1.2 million), Adjusted EBIT came to € -7.2 million, up € 4.5 million on the same quarter of the previous year.

The consolidated result before tax is negative for € 8.8 million, an improvement of approximately € 5.6 million on the € -14.4 million in first quarter 2022, thanks to:

• a reduction in finance expenses (€ 1.2 million as at 31 March 2022) despite a higher average cost of debt, thanks to the reduced expenses deriving from the application of IFRS 16, as a result of the new rental contract for the Segrate head office;
• an improvement in the result of the subsidiaries for € 1.4 million, deriving in particular from the update of the fair value measurement of the equity investment in the company A.L.I..

It is recalled that after the end of the first quarter, the 18.45% equity investment held in the share capital of Società Europea di Edizioni, publisher of Il Giornale, was sold.

At 31 March 2023, the Group’s net loss, after minority interests, came to € 5.2 million, showing a sharp increase of approximately € 6 million versus the € -11.4 million recorded in Q1 2022.
Mention should be made that in the first quarter of the year, a net loss is recorded at a consolidated level, due to the seasonal nature of the school textbooks business.

The IFRS 16 Net Financial Position came to € -220.8 million, essentially stable on the € -217.4 million recorded at 31 March 2022, including an IFRS 16 component of € -70.1 million.
The Pre-IFRS 16 Net Financial Position came to approximately € -150.7 million, slightly up on the € -135.8 million of 31 March 2022 due to the cash-out relative to acquisitions made during the last twelve months and the distribution of dividends.

Cash flow from ordinary operations (after outlays for financial expense and tax) in the last 12 months, amounted to € 63 million and allows the Group to continue to strengthen its financial structure. Note that ordinary cash generation was impacted as follows:

• the improvement in the business income management, partly temporarily offset by the dynamics of working capital;
• the lower tax payments for approximately € 3 million, mainly deriving from realignments and tax redemption applied during previous years.

At 31 March 2023, cash flow from extraordinary operations of the previous 12 months came to a negative € 61.5 million, mostly due to cash out for restructuring costs of € 7.2 million and for the net balance of acquisitions and disposals of approximately € 47 million.
Consequently, the LTM Free Cash Flow as at 31.03.2023 was positive by € 1.5 million, demonstrating the Group’s ability to finance its inorganic growth policy and to remunerate its shareholders.

Group employees at 31 March 2023 amounted to 1,911 units, up by approximately 1.5% versus 1,883 resources at 31 March 2022 (+28). Neutralising the effects of all the changes in scope applied, namely the acquisitions of De Agostini Libri, Star Comics and A.L.I. and the disposals of newspapers and business in the Media area, the Group’s workforce would show an increase of 0.9%.

OUTLOOK FOR THE YEAR

In light of the results achieved during the first quarter and a more favourable scenario in respect of the outlook for raw materials and service prices, with reference to the current scope, the Group believes it can now confirm the forecasts released previously for FY 2023.

Income Statement:

• Single-digit growth in revenues and adjusted EBITDA with margins expected to be in the region of 15%;
• approximately 10% growth in the net result, despite the greater amortisation/depreciation deriving from both the increasing investment policy implemented by the Group and the effects of the Purchase Price Allocation process relative to the recently-acquired companies.

Cash Flow and Net Financial Position:

• Ordinary Cash Flow is expected to fall within a range of € 60 to 65 million, showing growth of up to 10% on the 2022 figure (which had come to approximately € 60 million net of the one-off impact of derivative instruments related to rate risk hedging).
• the Group’s net financial debt (IFRS 16) is expected to come in, at end FY 2023, as 0xAdjusted EBITDA, down from 1.3x at end 2022.

The solid financial and equity position that characterises the Group allows it to continue to pursue the virtuous development path started some years ago, characterised by the progressive use of M&As whereby the Group seeks to continue to the make the most of inorganic growth opportunities, mainly in the book and digital businesses.

PERFORMANCE OF BUSINESS AREAS

• TRADE BOOKS

The first quarter of the current year was characterised by a positive trend seen on the book market that, following a consolidation experienced in 2022, recorded renewed growth with an increase in both value (+3%) and volume (+0.8%)[2].

In this context, the publishing houses in the Trade area recorded double-digit sell-out growth (+12.3%), of which 6.7% due to an increase in the volume component, thanks in particular to the performance in January and February by the new titles published at the start of the year.
Thanks to these results, the Mondadori Group has consolidated its national leadership position, with a market share which rose to 27.4% in March 2023, compared to 25.2% in March 2022.

This year, as witness to the quality of the Group’s publishing plan, two titles from the Group’s publishing houses ranked in the top two places of the ten best-selling books by value[3]: Prince Harry’s biography ‘Spare. Il minore‘, published by Mondadori, and ‘La vita intima’ by Niccolò Ammaniti, published by Einaudi.

Q1 2023 revenues came to € 88.3 million, showing growth of 29.5% on last year, structured as follows:

• +25% in the publishing houses, also due to the companies acquired, which contributed approximately € 8 million in the period; net of discontinuities, the improvement comes to 10% thanks to the concentration, in the quarter’s publishing plan, also of particularly successful titles;
• significant recovery of the museum business of Electa (+27%) and the positive international sales performance of Rizzoli International Publications (+12.5%);
• marked growth in third-party publishers distribution and services activities, which benefited from the contribution made by the consolidation of A.L.I. (whose revenues are booked as a fee[4]) and Libromania.

Adjusted EBITDA of the Trade Books area comes to € 13.2 million, up € 3.5 million, of which approximately one third comes from the positive trend of like-for-like revenues and two thirds from the contribution made by newly-acquired companies. ​
The profitability achieved by the Trade Books area is approximately 15% in the first quarter of 2023, showing improvement on the same period of 2022.

• EDUCATION BOOKS

School textbooks experience a typical seasonal performance that sees sales concentrated in the second half of the year following the adoption campaign: revenues from the first three months of the year typically account for less than 5% of the annual figure.

In this context, in the first quarter of 2023, the Group’s Education area recorded total revenues of € 8.5 million (€ 9 million in the same period of 2022) with a negative change that does not represent actual performance insofar as the result of different timing, compared to 2022, in the supply and invoicing of certain supplies.

Adjusted EBITDA comes to € -11.7 million, in line with FY 2022, due to the specified seasonality, which sees the booking during the first quarter of the operational structure costs and the costs for developing the text books marketed during the adoption campaign, which then draws to a close at the end of May.

• RETAIL

As already mentioned, at the end of March, Italy’s book market had grown by 3% compared to 2022, with +10.6% increase in the physical channel and a decline (estimated at -6%) in e-commerce.

In this context, the revenues of Mondadori Retail in the first quarter of 2023 amounted to € 41.6 million, an improvement of around 12% compared to the same period of the previous year: this was the result, in particular, of sustained growth in revenues from books (+€ 3.7 million, up by 12.8% compared to the first quarter of 2022).
Thanks to this overperformance, deriving from the excellent performance of physical shops, Mondadori Retail’s market share came to 11.7% (+0.9% compared to 31 March 2022).

An analysis of sales in the physical channel shows a further increase in revenues from directly-managed bookstores (+21.1% compared to the same period in the previous year) and franchisee bookstores (+9.5% compared to the first quarter of the previous year);

Adjusted EBITDA in the Retail area was positive, amounting to € 1.7 million, and showed a significant increase (+€ 1.4 million compared to the first three months of 2022), thanks to the continuous development and renovation work on existing shops and focus on the core business of books.

• MEDIA

In Q1 2023, the Media area recorded revenue of approximately € 32.3 million, dropping by approximately 31% versus the same period of the prior year, which reduced to approximately 8.5% on a like-for-like basis (excluding the effect of the deconsolidation of the titles sold at the start of 2023 and the distribution activities of Press-di).

In particular, the two area components showed different trends. On a like-for-like basis:

• digital activities, which account for more than a third of the area’s total revenue, showed growth in advertising revenue of 7%;
• traditional print activities were down by approximately 15%.

Adjusted EBITDA for the Media area came to € 2.9 million, showing growth of approximately 42% compared with the previous year, mainly due to traditional businesses. Specifically:

• in the print area, the increase stems from the booking of a tax credit by way of relief on costs incurred by the publisher for the distribution of magazines (€ 2.8 million), which more than offset the higher input costs for the period and the lower margin from the sales of collateral items;
• in the digital area, adjusted EBITDA is essentially stable on the same quarter of the previous year, thanks to higher advertising revenue and despite the higher costs incurred for launching new initiatives tied to the influencer marketing segment.

START OF SHARE BUYBACK PROGRAM TO SERVICE THE 2022-2024, 2021-2023 AND 2020-2022 SHARE PERFORMANCE PLANS

The Board of Directors of Arnoldo Mondadori Editore S.p.A. approved the start of a share buyback program, under Article 5 of Regulation (EU) no. 596/2014, to be executed in accordance with the terms and conditions, already disclosed to the public, resolved by the Ordinary Shareholders’ Meeting of 27 April 2023 which, among other things, authorized:

• the purchase and disposal of treasury shares for a maximum amount of up to 0.357% of the share capital, which is intended to provide the Company with the no. 933,548 shares required over the three-year period to meet the obligations under the 2023-2025 Performance Share Plan established by the same Shareholders’ Meeting, pursuant to Article 114-bis of the TUF;
• the continuation of the buyback program to service the 2021-2023 Performance Share Plan and the 2022-2024 Performance Share Plan in the manners and within the limits set out in the relevant Regulations.

Pursuant to Delegated Regulation (EU) 2016/1052, details of the buyback program are shown below:

• Purpose of the plan
  The sole purpose of the program is the buyback of Arnoldo Mondadori Editore S.p.A. treasury shares to service the 2023-2025 Performance Share Plan, the 2022-2024 Performance Share Plan and the 2021-2023 Performance Share Plan.
• Maximum amount in cash allocated to the program
  Buybacks will be made at a minimum unit price not lower than the official Stock Exchange price on the day before the purchase transaction, reduced by 20%, and at a maximum unit price not higher than the official Stock Exchange price on the day before the purchase transaction, increased by 10%. The volumes and unit purchase prices will, however, be defined in accordance with the conditions governed by Article 3 of EU Delegated Regulation 2016/1052. Specifically, no shares may be purchased at a price higher than the higher between the price of the last independent trade and the price of the highest current independent bid on the trading venue where the purchase is carried out. In terms of volumes, daily purchase amounts will not exceed 25% of the daily average volume of Mondadori shares traded over the 20 trading days before the dates of purchase.
• Maximum number of shares to purchase
  Purchases will regard a maximum of no. 591,000 ordinary shares (equal to 0.22%) of the share capital, taking account of the treasury shares already held in the Company’s portfolio, to service the 2023-2025 Performance Share Plan, the 2022-2024 Performance Share Plan and the 2021-2023 Performance Share Plan, in the manners and within the limits set out in the relevant Regulations.
  The maximum total amount of shares under the program is therefore within the limits of 10% of the share capital indicated by the Shareholders’ Meeting of 28 April 2022, taking account also of the no. 1,147,991 treasury shares, equal to 0.440% of the share capital, already held by the Company to date.
• Duration of the program
  The buyback program may start on 5 June 2023. The conclusion of the program, in any case by the Shareholders’ Meeting convened to approve the financial statements at 31 December 2023, the date on which authorisation to purchase treasury shares resolved by the Shareholders’ Meeting of 27 April 2023, expires, will be disclosed to the market.
  The buyback program may be renewed upon further authorization by the shareholders.
• Buyback procedures
  The buyback program will be coordinated and executed by an authorized intermediary, who will make the purchases independently, with no influence from Arnoldo Mondadori Editore S.p.A. as regards the timing of the purchases.
  Buybacks will be made pursuant to the combined provisions of Article 132 of Legislative Decree no. 58/1998 and of Article 5 of Regulation (EU) 596/2014, Article 144-bis of the Issuer Regulation, and the EU and national legislation on market abuse (including Delegated Regulation (EU) 2016/1052), in accordance with the resolutions of the above Shareholders’ Meeting of 28 April 2022.
  Any subsequent changes to the buyback program will be promptly disclosed by the Company. The transactions made will be disclosed to the market in the manners and within the time limits of applicable law.
  For information on the above Performance Share Plans, reference should be made to the information documents prepared pursuant to Article 114-bis of Legislative Decree no. 58/1998 and to Article 84-bis of CONSOB Regulation no. 1197/1999 and available on the website www.mondadorigroup.com ( Governance section) and at the authorized storage mechanism 1Info (www.1Info.it).

2023-2025 PERFORMANCE SHARE PLAN: ASSIGNMENT OF RIGHTS

The Board of Directors, having heard the Remuneration Committee, resolved on the assignments to the beneficiaries of the rights relating to the 2023-2025 Performance Share Plan, established by resolution of the Shareholders’ Meeting of 27 April 2023.
Information regarding the beneficiaries and the number of rights assigned are shown – by name, for the beneficiaries who are members of the Board of Directors, and in aggregate form for the other beneficiaries – in the table attached, prepared in compliance with Box 1, Schedule no. 7 of Annex 3A of the Issuer Regulation. The terms and conditions of the Plan are set out in the Directors’ Explanatory Report to the Shareholders’ Meeting of 27 April 2023 and in the Information Document prepared pursuant to Article 84-bis, paragraph 1 of the Issuer Regulation, available on the website www.mondadorigroup.com Governance section and on the storage mechanism www.1info.it to the contents of which reference should be made.

PUBLICATION OF THE MINUTES OF THE SHAREHOLDERS’ MEETING

Arnoldo Mondadori Editore S.p.A. informs that the minutes of the Ordinary Shareholders’ Meeting held on 27 April 2023 are available on the authorised storage mechanism 1Info (www.1info.it), in the Governance section of the Company website www.mondadorigroup.com and at the Company’s registered office.

The Interim Management Statement at 31 March 2023 is made available by today through the authorised storage mechanism 1Info (www.1Info.it), on www.mondadorigroup.com (Investors section) and at the registered office.

The presentation of the results at 31 March 2023, approved today by the Board of Directors, is available on 1Info ( www.1info.it), on www.borsaitaliana.it and on www.mondadorigroup.com (Investors section). A Q&A session will be held in conference call mode at 4.00 pm for the financial community, attended by the CEO of the Mondadori Group, Antonio Porro, and the CFO, Alessandro Franzosi. Journalists will be able to follow the meeting in listening mode, by connecting to the following phone number +39.02.8020927 or via web at:  https://hditalia.choruscall.com/?calltype=2&info=company.

The Financial Reporting Manager – Alessandro Franzosi – hereby declares, pursuant to Article 154 bis, paragraph 2, of the Consolidated Finance Law, that the accounting information contained herein corresponds to the Company’s records, books and accounting entries.

[1]Source: GFK, March 2023 (Week 13)

[2] GFK, March 2023 (Week 13)

[3] GFK, March 2023 (ranking in terms of cover value)

[4] In accordance with IFRS15

Annexes (in the complete pdf):

1. Consolidated balance sheet;
2. Consolidated income statement;
3. Group cash flow;
4. Glossary of terms and alternative performance measures used.

Information pursuant to Schedule 7 of Annex 3a to CONSOB Regulation no. 11971/199

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the draft Parent Company and Group consolidated financial statements at 31 December 2021 presented by CEO Antonio Porro.

2021 HIGHLIGHTS
In 2021, the Group was able to open a new chapter in its growth path, while achieving a stronger operating and financial standing.
As proof of its ability to pursue development opportunities, in 2021 Mondadori completed the acquisition of D Scuola – together with Rizzoli Libri the biggest investment in the last 15 years -, which has enabled the Group to gain a leadership position also in the school textbook publishing market and to give substance to its strategy of increasing focus on the core business of books.
This strategic approach also includes further transactions announced during the year: the acquisition of 50% of A.L.I. – Agenzia Libraria International – and DeA Planeta Libri, as well as a further reduction in the exposure to print magazines.

“In 2021 the soundness of our choices rewarded the Mondadori Group with consolidated results above guidance, even though already revised upwards during the year”, pointed out Antonio Porro, Chief Executive Officer of the Mondadori Group. “The buoyant trend of the relevant markets has in fact allowed us to seize an important growth opportunity and, together with greater operating efficiency, has led to a strong increase in both profitability and cash generation. This has brought us the best net result of the last 10 years and a net financial position that has returned to positive again after more than 15 years. The favourable economic backdrop and the financial strength of our Group have therefore paved the way for a return, after 10 years, to a shareholder remuneration policy”, concludes Porro.

PERFORMANCE AT 31 DECEMBER 2021
In 2021, consolidated revenue amounted to € 807.3 million, up by 8.5% versus € 744 million in the prior year, driven by the positive trend that permeated all areas of business, the Books and Retail areas specifically, which benefited in particular from the buoyancy of the Books market.

Adjusted EBITDA in 2021 came to € 105.7 million, up by € 7.7 million versus 2020 (€ 98.1 million); this performance reflects, on the one hand, the positive trend in revenue recorded by all business areas and, on the other, the ongoing efforts to curb operating and structural costs implemented by Management.
The reduction versus 2020 in the ratio of fixed costs (overheads and payrolls) on consolidated revenue enabled the Group to confirm its margins to over 13%: net of the relief received to aid museum activities in both years, the Group’s margin would have increased to 12.7% from 12.1%.

EBITDA, amounting to € 91.1 million versus € 84.6 million in 2020, improved by € 6.5 million, despite higher non-recurring expense of € 1.1 million, attributable mainly to restructuring costs recognized in the Media and Corporate & Shared Services areas.

In 2021, EBIT amounted to € 45.2 million, improving strongly – by over € 30 million – versus 2020, thanks to the mentioned operating dynamics, but mostly to the presence in the result at 31 December 2020, of higher write-downs for a total of approximately € 22 million.

Consolidated profit before tax came to € 38.6 million versus € 1.6 million in 2020.
On top of that, the following items also contributed to the significant improvement of approximately € 37 million:

• the reduction of approximately € 1.6 million in financial expense, due mainly to lower average debt and a lower average interest rate as a result of the renegotiation of the lines of credit completed in May 2021, as well as the recognition of certain impairments of receivables at 31 December 2020;
• the strong improvement in the results of associates (consolidated at equity).

The Group’s net profit, after minority interests, came to € 44.2 million, a sharp increase of approximately € 40 million versus € 4.5 million recorded in 2020.

Despite the sharp increase in taxable income, tax components for the year close at a positive € 5.6 million: this is attributable to net non-recurring tax income – deriving from the process of realigning the tax amounts of trademarks and goodwill to their respective statutory amounts – of approximately € 19 million.

The Mondadori Group’s net financial position (before IFRS 16) at 31 December 2021, before outlays for the acquisition of D Scuola, after more than 15 years has returned to positive territory and is equal to € 37.4 million, a strong improvement – by over € 50 million – versus € -14.8 million at 31 December 2020.

Considering the effects of the extraordinary transaction – completed on 16 December 2021 – and the equity and financial consolidation of the acquiree, the Group’s net financial position (before IFRS 16) stood at € -94.8 million, beating expectations that had estimated net financial debt at year end at approximately € 100 million.
IFRS 16 NFP stood at € -179.1 million (IFRS16 impact € -84.3 million) versus € -97.6 million at 31 December 2020.

At 31 December 2021, the cash flow from operations for the last twelve months came to a positive € 79.3 million; the cash flow from ordinary operations (after outlays for financial expense and tax), equal to € 68.2 million (+33.3% versus 2020), allows the Group to continue on the path of strengthening its financial structure, confirming the business’s continued and growing ability to generate cash.
The total free cash flow generated by the Mondadori Group in 2021 exceeded € 52 million, up by 28% versus € 40.7 million in 2020.

At 31 December 2021, Group employees^[1] amounted to 1,810 units, down by approximately -2% versus 1,847 units at December 2020, despite the increase in the workforce following the acquisition of Hej! (net of which the reduction would be -2.5%); this decrease is the result of continued efforts to increase the efficiency of the individual business areas.

BUSINESS OUTLOOK
The positive results, the good business outlook and the further improvement in operating performance and cash generation capacity, paint a picture of a very solid Group, allowing it to look forward with greater confidence to the results achievable in the new year, despite the recent challenges posed by the increase in energy prices and the purchase of raw materials, paper first and foremost.

From a strategic point of view, the Company will continue to strengthen its core business and therefore its leadership in the Books area, increasing its relevance and impact on the overall business.

This path will see the Mondadori Group both expand horizontally through entry into new segments of book publishing, including contiguous areas, and continue and consolidate the process of vertical integration launched through the recent acquisitions in the field of book promotion and distribution.

The Group will concurrently continue to develop its digital skills and range of products, and to rationalize its non-strategic activities.

From an operating point of view, the Group’s business-financial targets that follow refer to a scope that includes the transactions concluded in 2021, therefore the consolidation of D Scuola^[2] and the deconsolidation of the activities referring to the titles sold; these forecasts, instead, do not include any negative impact from the current context of geo-political instability, and are based on the absence of significant changes in the developments of the health emergency and resulting further discontinuities and slowdowns in economic activities and consumption at a global level.

Income Statement
Against this backdrop, reasonable estimates point to a mid-single digit increase in revenue in 2022
and adjusted EBITDA up by more than 20%.
On a like-for-like basis, these estimates would translate into a top-line and low single-digit margin growth, confirming the ongoing cost containment actions aimed also at offsetting in 2022 the negative impact of the increase in costs relating to raw materials and energy consumption.

Net profit in 2022 is expected to grow double-digit, despite the absence of the significant tax component^[3], amounting to approximately € 19 million, which had benefited net profit in 2021, thanks also to non-recurring expense much lower than the figure recorded in 2021.

Cash Flow and Net Financial Position
In 2022, the Group is expected to confirm the significant cash generation capacity shown in recent years:

• Cash Flow from ordinary operations is reasonably expected to be basically in line with the 2021 figure due, on the one hand, to the positive contribution of D Scuola, and, on the other, to a “one-off” increase in the Group’s capital expenditure deriving:
  – in the school segment, from a stronger and richer product range and publishing catalogue;
  – in the Retail area, from the project on the renovation of the flagship store in Piazza Duomo, Milan, which will see the light in the second half of the year;
• this points to an estimate of a Free Cash Flow for 2022 – before payout of the dividend but net of the forecasts on cash outflows from the extraordinary transactions announced – in the region of € 40/45 million and a Group net debt (IFRS16) of less than 1.1x Adjusted EBITDA (0.6x before IFRS16).

The financial solidity reached allows the Group to continue its path of virtuous development, especially in the book business, also through M&As: therefore, the Group will continue, also in the current year, to pursue further growth opportunities through acquisitions, in a resolute and active way.

After more than 10 years, the Group has seen a return to solid conditions for a renewed shareholder remuneration policy with the intent – for the next three years – of distributing 40% of Cash Flow from Ordinary Operations per year, maintaining a minimum floor equal to the Dividend Per Share of 2021. During this period, the Board of Directors, when proposing the distribution to the Shareholders’ Meeting, will in any case take account of the general macroeconomic scenario, any business plans and investment requirements, as well as the expected cash flows that will affect the Group’s equity and financial structure.

PERFORMANCE OF BUSINESS AREAS

• BOOKS

2021 showed a book market growth of 14.7%^[4] versus 2020 and 18.5% versus 2019, a year still unscathed by the distorting effects of the pandemic.

The Group was able to benefit from this market buoyancy: the Trade Books area saw an increase in sell-out in terms of value of approximately 10% versus 2020, and was once again able to retain its leadership at national level, with a market share of 23.7%^[5], also confirmed by the presence of 5 titles in the list of the 10 bestselling books of the year.

In the school textbooks segment, the Group achieved a steady adoption market share (22.1%^[6]), proof of the excellent results achieved and the quality of the editorial offering of the Mondadori Education and Rizzoli Education publishing houses. Including the acquisition of D Scuola, the pro forma 2021 market share would stand at 32.9%, giving the Group a leadership position also in the school textbooks publishing market.

In 2021, revenue from the Books area amounted to € 465 million, up by approximately 10% versus € 422.9 million in the prior year, broken down as follows:

• +10.6% in the Trade area, which published 2,495 titles in the period (versus 2,193 in 2020), returning production to pre-pandemic levels.
• +9.4% in the Educational segment, which benefited from increased revenue from both the school textbooks segment (+4.2%) and Rizzoli International Publications (+24.1%).
• +5.2% in the distribution of third-party publishers.

Adjusted EBITDA in the Books area came to € 92.6 million in 2021, improving by approximately € 5 million versus € 87.5 million in 2020, thanks to the strong revenue growth that more than offset the lower relief paid to Electa (approximately € 5 million) in the museum segment versus the prior year.
Profitability achieved by the Books area in 2021 was approximately 20%.

• RETAIL

As mentioned earlier, the books market grew by 14.7%^[7] in 2021 versus 2020, driven mainly by the physical channel. Against this backdrop, Mondadori Retail’s market share stood at 11.4%, propelled by the outstanding performance of the physical network of directly-managed stores and franchises.

The 2021 income statement figures show a strong growth in revenue and margins in the area, thanks to the renewal and development process launched in recent years, which improved operating and management performance.

Revenue amounted to € 173.9 million, up by € 20.2 million (+13.1%) versus € 153.7 million in the prior year, as a result of the positive performance of the book product (+16.7%), which now accounts for more than 80% of revenue^[8] in the area. Specifically:

• directly-managed stores saw a strong recovery in revenue (+20.2% versus the prior year), thanks to the strategy of focusing on the core business of books and the abovementioned network development and maintenance activities;
• the franchised channel, composed mainly of proximity stores located in small towns, continued its progression, increasing by +9% versus the prior year;
• revenue from the Bookclub returned to growth (+5.3%), while revenue from the online channel settled at € 15.6 million, down versus the prior year but improving by approximately 12% versus 2019.

In 2021, the area recorded significant growth in adjusted EBITDA, which stood at € 5.1 million (€ +3.9 million versus 2020 and up also versus 2019).

This improvement is attributable to the strong ongoing renewal and development of the network of physical stores, to careful cost management and a thorough review of the organization and processes, as well as the constant work on product innovation and enrichment of the editorial offer, accompanied by new services and communication formats for customers and partners.
The structural actions adopted over the past few years have brought a strong turnaround in the company’s operating and financial performance, with results that are on the rise also versus 2019.

• MEDIA

The Media area reported revenue of € 206.6 million in 2021, up by 4.5% versus € 197.6 million in the prior year.
Specifically:

• circulation revenue was down by 7.1%, showing a performance in line with the relevant market, with a market share of 1%, steady versus 2020 (approximately 20% net of the two titles sold at end 2021) ²¹;
• revenue from add-on products was down by 15.8% versus 2020, hit by the negative impact of the lower availability of DVD titles due to the absence of significant film releases caused by the ongoing pandemic;
• advertising revenue grew by approximately 27% overall (+15% excluding the contribution of the acquisition of Hej!):
  – digital activities grew by 40%, thanks also to the contribution of AdKaora and the consolidation of Hej! (+18% excluding this acquisition);
  – advertising sales on print magazines rose by approximately 10%, thanks also to the rebound in advertising investments.
  Mention should be made that the percentage of digital revenue on total advertising revenue is over 62% (from 57% in 2020), confirming Mondadori Media’s leadership position in digital and social media and the decreasing dependence of the business unit’s revenue on print advertising sales.
• Other revenue, which includes revenue deriving from distribution activities, posted a 10% increase versus the prior year, reflecting growth in the distribution activities of third-party publishers in the newsstand channel.

Adjusted EBITDA in the Media area amounted to € 12.4 million, up by more than 50% versus 2020 (€ 7.9 million), and also higher than the € 11.3 million recorded in 2019, driven by the development of digital activities and, in the print area, the recovery of advertising sales and the continued measures to contain operating costs, which brought an increase in profitability: in fact, the overall EBITDA margin improved by two percentage points, rising from 4% in 2020 to approximately 6%.
Specifically, digital activities, including Hej!, contributed approximately € 10 million to the overall result, also as a result of a percentage margin of over 20%.

PERFORMANCE OF ARNOLDO MONDADORI EDITORE S.P.A.
The Parent Company’s income statement for the year ended 31 December 2021 shows the same profit as the consolidated financial statements, amounting to € 44.2 million (€ 4.5 million in 2020), due to the adoption of the equity method to measure the Company’s investments in the separate financial statements.

Revenue, amounting to € 41.1 million, was down by approximately € 4 million versus the prior year, due primarily to a changed scope of the costs of the central units charged back to subsidiaries.

Adjusted EBITDA deteriorated from € -0.9 million to € -5.4 million, attributable mainly to the abovementioned reduction in chargebacks to subsidiaries.
2021 includes negative non-ordinary items totaling € 6 million, attributable mainly to provisions for restructuring costs.
Amortization and depreciation in 2021, amounting to € 9.5 million, was basically steady versus 2020 (€ 9.9 million).
2021 includes lower net financial expense for a total of € 0.7 million.

The positive contribution from the equity measurement of investments amounted to € 65.3 million, a sharp increase versus € 13.2 million in the prior year, due mainly to the write-back of the subsidiaries Mondadori Libri S.p.A. and Mondadori Media S.p.A..

The Parent Company’s net profit, amounting to € 44.2 million (versus € 4.5 million in 2020), benefited from the tax income of € 3.2 million recognized in 2021 (€ 8.6 million in 2020 following recognition of the “Patent box” relief for € 5.2 million).

DIVIDEND DISTRIBUTION PROPOSAL OF € 0.085 PER ORDINARY SHARE
As repeatedly mentioned, the favourable economic backdrop and the financial solidity achieved by the Group have paved the way for a return to a shareholder remuneration policy: based on the results of 2021, the Board of Directors has proposed to the next Shareholders’ Meeting, convened on 28 April 2022, the distribution of a unit dividend of € 0.085 for each ordinary share (net of treasury shares) outstanding at the record date, for a total of approximately € 22.1 million^[9], equal to a pay-out of 50% of the consolidated net profit and a dividend yield of 4.2% (at 31 December 2021).
The dividend will be paid, in accordance with the provisions of the “Regulation of the markets organized and managed by Borsa Italiana S.p.A.”, from 25 May 2022 (payment date), with ex-coupon (no. 21) date on 23 May 2022 (ex date) and with the date of entitlement to payment of the dividend, pursuant to Article 83-terdecies of the TUF (record date), on 24 May 2022.

SIGNIFICANT EVENTS AFTER YEAR-END 2021
On 25 February 2022, the Mondadori Group announced that it had received notice from the Antitrust Authority of the authorization to acquire from De Agostini Editore S.p.A. a 50% stake in the share capital of DeA Planeta Libri S.r.l..
The Authority’s go-ahead triggered the fulfilment of the suspensive condition of the agreement on the sale of the stake; the sale will therefore be fully implemented on the closing date, scheduled by March, as from which the company will be known as De Agostini Libri S.r.l..
On 7 March 2022, the Mondadori Group announced that it had received notice from the Antitrust Authority of the authorization to acquire a 50% stake in A.L.I. S.r.l. – Agenzia Libraria International, specialized in the distribution of books.
Following authorization from the above Authority, the transaction will be fully implemented on the closing date, which is scheduled to take place by April.

PROPOSED RENEWAL OF THE AUTHORIZATION TO PURCHASE AND DISPOSE OF TREASURY SHARES
Following expiry of the previous authorization resolved upon by the Shareholders’ Meeting on 27 April 2021, with the approval of the financial statements at 31 December 2021, the Board of Directors will propose to the next Shareholders’ Meeting the renewal of the authorization to purchase and dispose of treasury shares with the aim of retaining the applicability of law provisions in the matter of any additional buyback plans and, consequently, of seizing any investment and operational opportunities involving treasury shares.
Below are the key elements of the Board of Directors’ proposal:

• Motivations
  The motivations underlying the request for the authorization to purchase and sell treasury shares refer to the opportunity to attribute to the Board of Directors the power to:
  – use the Treasury Shares purchased or already in the Company portfolio as compensation for the acquisition of interests within the framework of the Company’s investments;
  – use the treasury shares purchased or already held in portfolio against the exercise of option rights, including conversion rights, deriving from financial instruments issued by the Company, its subsidiaries or third parties and to use the treasury shares for lending, exchange or transfer transactions or to support extraordinary transactions on the Company’s capital or financing transactions that imply the transfer or sale of treasury shares;
  – undertake any investments, directly or through intermediaries, including for the purpose of containing abnormal movements in share prices, stabilizing share trading and prices, supporting the liquidity of the share on the market, in order to foster the regular conduct of trading beyond normal fluctuations related to market performance, without prejudice in any case to compliance with applicable statutory provisions;
  – rely on investment or divestment opportunities, if considered strategic by the Board of Directors, also in relation to available liquidity;
  – dispose of treasury shares to service share-based incentive plans set up pursuant to Article 114-bis of the TUF, and plans for the free allocation of shares to employees or members of the governing bodies of the Company or to Shareholders.
• Duration
  The authorization to purchase treasury shares runs from the date of any resolution approving the proposal by the Shareholders’ Meeting, until the Shareholders’ Meeting called to approve the financial statements at 31 December 2022 and, in any case, for a period no more than 18 months.
  The authorization to dispose of treasury shares is requested for an unlimited period, given the absence of time limits pursuant to current regulations and the opportunity to allow the Board of Directors to make use of the maximum flexibility, also in terms of time, to carry out any disposal of shares.

• Maximum number of purchasable treasury shares
  The authorization would allow the purchase, including in more than one tranche, of ordinary shares of Arnoldo Mondadori Editore S.p.A., with a par value of € 0.26 each, in one or more tranches in an amount freely determinable by the Board of Directors – up to a maximum number of shares – also taking into account of the ordinary shares held, directly and indirectly, in the portfolio from time to time – of no more than 10% overall of the share capital, in accordance with Article 2357, paragraph 3, of the Italian Civil Code.

• Criteria for purchasing treasury shares and indication of the minimum and maximum purchasing cap
  Purchases shall be made in compliance with Article 132 of the TUF, 144-bis, paragraph 1 letter b) of the Issuer Regulation, and on regulated markets or multilateral trading systems, according to the operating criteria established in the organization and management regulations of the same markets, which do not allow the direct matching of buy orders against predetermined sell orders, and also in compliance with any other applicable law, including EU law. Additionally, share purchase transactions may also be carried out in the manner envisaged in Article 3 of EU Delegated Regulation no. 2016/1052 in order to benefit, if the conditions are met, from the exemption under Article 5, paragraph 1, of EU Regulation no. 596/2014 on market abuse with regard to inside information and market manipulation.
  Regarding the disposal of treasury shares, disposals may be made, on one or more occasions and even before having terminated the maximum number of purchasable treasury shares, either by selling them on regulated markets or according to other trading methods in compliance with the law, including EU law, in force and with the Admitted Market Practices, if applicable.

  Under the proposed authorization, the minimum and maximum purchase price shall be determined at a unit price not lower than the official Stock Exchange price of Mondadori shares on the day preceding the purchase transaction, reduced by 20%, and not higher than the official Stock Exchange price on the day preceding the purchase transaction, increased by 10%.
  In any event – except for any different price and volume determinations resulting from the application of the conditions set forth in the Admitted Market Practices – such price shall be identified in accordance with the trading conditions set forth in Delegated Regulation (EU) no. 1052 of 8 March 2016.

  In terms of consideration, sales transactions or other acts of disposition of treasury shares shall be carried out:
  – if executed in cash, at a price no lower than 10% of the reference price recorded on the MTA – Euronext Milan – organized and managed by Borsa Italiana S.p.A. in the trading session prior to each single transaction;
  – if executed as part of any extraordinary transactions in accordance with financial terms to be determined by the Board of Directors on the basis of the nature and characteristics of the transaction, also taking account of the market performance of Mondadori shares;
  – if executed to service the Performance Share Plans adopted by the Company in compliance with the terms and conditions set out in the resolutions of the Shareholders’ Meeting that establish the Plans and the related regulations.

To date, Arnoldo Mondadori Editore S.p.A. holds a total of no. 1,049,838 treasury shares, equal to 0.402% of the share capital.

For further information on the proposed authorization for the purchase and disposal of treasury shares, reference should be made to the Directors’ Explanatory Report, which will be published within the time limits and in the manner prescribed by applicable regulations.

GRANTING OF SHARES UNDER THE 2019-2021 PERFORMANCE SHARE PLAN: INFORMATION PURSUANT TO ART. 84-BIS, PARAGRAPH 5 CONSOB REGULATION NO. 11971/1999
The Board of Directors, based on the final assessment of the Performance Targets underlying the Plan, and having heard the Remuneration and Appointments Committee, resolved to allocate a total of no. 311,848 Arnoldo Mondadori Editore S.p.A. shares to 8 beneficiaries, in implementation of the provisions contained in the “2019-2021 Performance Share Plan” established by the Board of Directors on 14 March 2019 and subsequently adopted by the Shareholders’ Meeting on 17 April 2019 (the “2019-2021 Plan”).
Mention should be made that the 2019-2021 Plan takes the form of a share granting plan and grants its beneficiaries the right to receive, free of charge, shares in the Company provided that, at the end of a reference period of three financial years, the performance targets set in the same Plan have been achieved.
The 8 beneficiaries of the 2019-2021 Plan are the Chief Executive Officer and 7 managers identified by name by the Chief Executive Officer, as delegated by the Board of Directors.
The characteristics of the 2019-2021 Plan are explained in detail in the Directors’ Report to the Shareholders’ Meeting of 17 April 2019 and in the information document contained therein, available on www.gruppomondadori.it, Governance section, to which reference should be made.
Attached is the information required by Schedule 7 of Annex 3A to CONSOB Regulation no. 11971/1999 to account for the granting of shares in the context of the 2019-2021 Performance Plan.

PROPOSED ADOPTION OF A 2022-2024 PERFORMANCE SHARE PLAN
The Board resolved, on a proposal from the Remuneration and Appointments Committee, and in keeping with the introduction of the performance share approved last year for the medium/long-term remuneration of executive directors and key management personnel, to submit to the approval of the Ordinary Shareholders’ Meeting, the adoption of a 2022-2024 Performance Share Plan, in accordance with Article 114-bis of Legislative Decree no. 58 of 24 February 1998, intended for the Chief Executive Officer, the CFO – Executive Director and a number of Company managers who have an employment and/or directorship relationship with the Company or with its subsidiaries on the granting date of the shares.

With the adoption of the Plan, the Company aims to encourage Management to improve medium to long-term performance, in terms of both industrial performance and growth in the value of the Company.
The Plan envisages the assignment to the beneficiaries of rights to the free allocation of company shares, subject to the achievement of specific performance targets set and measured at the end of the three-year performance period.
These targets are structured to include both shareholder remuneration indicators and management indicators functional to raising the share value, ensuring maximum alignment of Management remuneration and the creation of value for the Company, as well as indicators of a non-operating/financial nature.
For details on the proposed adoption of the 2022-2024 Performance Share Plan, the beneficiaries and the main characteristics of the Regulations of the Plan, reference should be made to the Information Document drawn up by the governing body, pursuant to Article 84-bis and annex 3A of the Issuer Regulation, and to the Explanatory Report, which will be published within the time limits and in the manner prescribed by applicable regulations.

CONSOLIDATED NON-FINANCIAL STATEMENT PURSUANT TO LEGISLATIVE DECREE 254/2016
Under Legislative Decree 254/2016, the Board of Directors’ 2021 Report on Operations of the Mondadori Group is also composed of the Consolidated Non-Financial Statement (NFS), a qualitative-quantitative description of the non-financial performance of the Company, associated with environmental, social, and staff-related issues, as well as those regarding respect for human rights, and the fight against corruption and bribery, which are relevant given the activities and characteristics of the Company. The NFS was prepared in accordance with GRI Standards: Core option, and includes benchmark KPIs related to GRI G4 “Media Sector Disclosure”.
With regard to 2021, the Mondadori Group has updated its materiality analysis, consistent with the principles set out by the GRI Sustainability Reporting Standards (GRI Standards) and the reporting scopes laid down by Legislative Decree 254/2016.
With a view to continuous improvement of the process, in 2021 the stakeholder engagement activity was expanded by involving employees and teachers, who were given a specific online questionnaire on sustainability issues.
The document also contains relevant information in line with ESMA’s recommendations for the 2021 reporting year, and includes references required by Regulation (EU) 2020/852 related to the recent introduction of the EU Taxonomy.

The findings from the reporting include a number of tangible actions regarding social, governance and environmental issues. These include: the creation of the position of Chief Diversity Officer for the implementation of strategies and projects aimed at promoting diversity, equity and inclusion; in keeping with the measures adopted to combat the spread of COVID-19, the possibility offered to employees and associates to carry out and repeat diagnostic screenings free of charge; access, as part of the New Competencies Fund (NCF), to a training and professional development path intended as a strategic lever to encourage and strengthen internal skills and competencies and the attraction of young talents.
During the year no cases of corruption or bribery involving the Company or its employees were reported, and no legal action was initiated or concluded against the Group or its employees for cases of corruption or reports made within the whistleblowing system.
In 2021, the Mondadori Group once again paid special attention to environmental issues and the specific impacts associated with the life cycle of paper products, energy efficiency measures and the reduction of climate-changing emissions: an approach that guides the Company in the implementation of its business activities, from the purchase of certified paper to the efficient management of points of sale. As for the sourcing of raw materials for the printing of publishing products, the Group opts for the use of paper certified under the two main schemes applied worldwide, PEFC and FSC, whose percentage reached 99.9% of the total during the year.

SUSTAINABILITY PLAN GUIDELINES
The Mondadori Group has launched its first-ever Sustainability Plan, which identifies short, medium and long-term targets and actions to improve performance in social, governance and environmental terms.
The reflection process led to the identification of the areas and strategic lines of sustainability on which the Group intends to work in the future through the achievement of targets set on an annual basis and periodically updated.
The 3 relevant macro areas – defined below – and the respective guidelines identified for 2022, reflect the Group’s identity, its mission and its role as a publisher:

Social: enhancing people, content and places for education and culture

• To become a role model in the field of diversity, equity and inclusion, enhancing and contributing to the well-being of our people, through welfare tools and skills development.
• To promote culture and quality, equitable, and inclusive education that fosters pathways to lifelong learning.
• To create, conceive and develop valuable content and affordable, ESG-friendly products.
• To support cultural outposts for social development through the enhancement of bookstores, schools, museums, social channels, events and partnerships.

Governance: promoting sustainable business success

• To pursue sustainable business success by promoting the integration of ESG issues in governance, business plans and the operating model, also by strengthening the mechanisms for listening to stakeholders to develop paths of ongoing improvement.
• To maintain the highest standards for protecting and managing risks and opportunities along the value chain.

Environment: disseminating environmental culture and mitigating impacts on ecosystems

• To spread environmental culture, also through education aimed at an increasingly sustainable development and lifestyle.
• To mitigate environmental impacts throughout the product life cycle, by fostering the protection of biodiversity and reducing climate-changing emissions.

The results for the year ended 31 December 2021, approved on today’s date by the Board of Directors, will be presented by the Mondadori Group Management to the financial community in a webcast presentation scheduled today at 3:30 PM.

The corresponding documentation will be available on 1Info (www.1info.it), www.borsaitaliana.it and www.gruppomondadori.it (Investors). Journalists will be able to follow the presentation in listening mode only, by connecting to the following telephone number +39028020911 and via web https://www.c-meeting.com/web3/join/M37DCPDPQUB3KL. At the end of the meeting, a dedicated session is scheduled where questions may be submitted to management.

The Financial Reporting Manager – Alessandro Franzosi – hereby declares, pursuant to Article 154 bis, paragraph 2, of the Consolidated Finance Law, that the accounting information contained herein corresponds to the Company’s records, books and accounting entries.

Annexes (in the complete pdf):

1. Consolidated balance sheet;
2. Consolidated income statement;
3. Consolidated income statement – fourth quarter;
4. Group cash flow;
5. Arnoldo Mondadori Editore S.p.A. balance sheet;
6. Arnoldo Mondadori Editore S.p.A. income statement;
7. Arnoldo Mondadori Editore S.p.A. statement of cash flows;
8. Glossary of terms and alternative performance measures used;
9. Information pursuant to Schedule 7 of Annex 3a to CONSOB Regulation no. 11971/1999

[1] The workforce at 31 December 2021 does not include D Scuola’s headcount, but does include employees from the two titles, the sale of which became effective on 1 January 2022.

[2] Excluded are the transactions that were under Antitrust scrutiny at 31 December 2021 (acquisition of 50% of A.L.I. and 50% of DeA Planeta, sale of 51% of Press-di).

[3] Derived from the tax realignment of intangible assets.

[4] GfK, December 2021 (figures in terms of market value; 52-week survey in 2021 vs. 53 weeks in 2020)

[5] GfK, December 2021 (figures in terms of market value)

[6] ESAIE, 2021 (number of adopted sections)

^[7] GFK (in terms of value)

^[8] Product revenue excluding Club revenue

[9] Rough estimate based on the number of shares outstanding at the date of this Report.