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Arnoldo Mondadori Editore S.p.A. today announced that it has made available, at both the company’s headquarters and Borsa Italiana S.p.A., the minutes of the extraordinary part of the Shareholders’ Meeting held the last 11 November 2010.

The above-mentioned documentation is also available at the website www.gruppomondadori.it (‘Governance’ section).

The Board of Directors of Arnoldo Mondadori S.p.A. met today to examine and approve the interim report for the first nine months of the year to 30th September 2010, as presented by the Group’s Deputy Chairman and Chief Executive, Maurizio Costa.

THE MARKET SCENARIO IN THE THIRD QUARTER

There were no significant changes in the economic trends in the sectors of reference for Mondadori in the third quarter of the year. In particular, both circulation figures and advertising investments remained at lower levels than the previous year. Despite this unfavourable context, the company has been able to achieve in the third quarter a level of gross operating profit 73.2% higher than the same period of last year, bringing the increase for the first nine months of 2010 to 51.2%

A SUMMARY OF BUSINESS PERFORMANCE

The elements that have determined such a conspicuous improvement in profitability, with just a slight increase in revenues (+1.4%), are further confirmation of what was already stated in the report for the first six months, ie:

– a good level of stability in terms of magazine circulation, with a performance clearly ahead of the market average both in Italy and in France;

– a further increase in profitability in the book business, where revenues in the third quarter were also up on 2009;

– a constant improvement of the results from the international network and the ongoing success of Grazia France, both in terms of circulation and advertising sales;

– the increasing contribution of the plan for the reduction of operating costs – which has already realised 85% of the target savings of €170 million over the three-year period 2009-2011 – and which will continue for the whole of next year.

Activities related to digital content have continued with even greater impulse with the stipulation of agreements with operators in production, telecoms and retail; since the beginning of September the digital area has also taken on a locomotive role, both for its own activities and in support for other business sectors, above all magazines and books.

Thanks to the introduction of a new business model and the redefinition of the organisational structure – which will become fully operational from the beginning of next year – will encourage and stimulate the involvement and cooperation of all of the business areas in response to new market opportunities.

GROUP PERFORMANCE IN THE PERIOD TO 30 SEPTEMBER 2010

Il Consolidated revenues came to €1,130.2 million, an improvement of 1.4% on the €1,114.3 million of the first nine months of 2009.

Consolidated gross operating profit amounted to €103.1 million, an increase of 51.2% compared with the €68.2 million of last year, despite higher costs due to increased postal charges of €5.5 million.

This is equal to a figure of 9.1% as a proportion of revenues, compared with 6.1% for the same period of 2009.

Consolidated operating profit reached €85.6 million, a 71.2% increase on the €50 million of 30 September 2009, with amortizations and depreciations of tangible and intangible assets for a total of €17.5 million (€18.2 million in 2009). As a proportion of revenues, an increase from 4.5% in 2009 to 7.6%.

Consolidated profit before taxation amounted to €67.5 million, an increase of 35% on the €50 million of the first nine months of 2009, with net financial charges of €18.1 million. For an appropriate comparison with the previous year, account should be taken of a capital gain of €14.5 million in the third quarter resulting from the closure of a private placement and relative derivatives.

Consolidated net profit came to €30.7 million, a 13.3% increase on the €27.1 million of 30 September 2009: this result was affected by the payment of €8.7 million to clear a pending fiscal suit.

Consolidated adjusted net profit, which takes account of the net impact of the extraordinary elements outlined above (financial capital gains in 2009 and tax charges for previous years paid in 2010), was more than double that of the same period of 2009.

Gross cash flow in the first nine months of 2010 amounted to €48.2 million, compared with €45.3 million in 2009.

The Group’s net financial position went from -€372.9 million on 31 December 2009 to -€369 million. The improvement compared with 30 September 2009 was of €47.9 million and €275.5 million compared with 30 September 2008.

Personnel

On 30 September 2010 staff employed by the companies of the group, on both permanent and temporary contracts, totalled, a tempo 3,717.

On a comparable basis, in other words excluding the impact of the recent consolidation of Mondolibri S.p.A., there was a reduction of 260 (-7%) compared with 31 December 2009. This is mainly attributable to the ongoing restructuring process at the parent company, as well as constant efforts to improve efficiencies at all of the companies in the group.

There was a reduction in staff numbers of 688, which corresponds to 89% of the plan 2008/2011.

The action taken to date has been conducted in full compliance with the approved restructuring plan and has made it possible, in nine months and on a comparable basis, to reduce staff by 8% in Italy and almost 5% in France.

As a consequence, the cost of contract staff, which amounted to €198.2 million (€217,9 million on 30 September 2009) was down by 9%.

Finally, it should be noted that the national contract for printing and publishing employees, which expired in March 2010, has, to date, still not been renewed.

 

RESULTS OF THE BUSINESS AREAS

• BOOKS

Market data for the first nine months of 2010 (source: Nielsen) confirm the leadership of the Mondadori Group in trade books, with an overall market share of 26.7%, with Edizioni Mondadori and Einaudi in the top two places on the list of publishers.

Revenues in the Books area at 30 September 2010 totalled €294.5 million, a fall of 3.8% on the €306 million of the same period of the previous year.

Sales in the third quarter, especially in September, showed signs of a recovery in market share. Of note during the period were the awards of the Premio Strega 2010 to Antonio Pennacchi for Canale Mussolini (Mondadori), the Premio Campiello for the novel Accabadora by Michela Murgia (Einaudi), and the Nobel Prize for Literature to Mario Vargas Llosa, a historic author of Einaudi, as well as the success of the new novel by Ken Follett, and a series of other important new title that augur well for the Christmas season for all of the group’s publishing houses.

To 30 September 2010 Edizioni Mondadori generated revenues of €85.9 million, a 2.8% fall compared with the previous year.

The autumn season was characterised by the simultaneous world publication of the new novel by Ken Follett, La caduta dei giganti, which immediately entered the bestsellers list with an initial print run of 500,000 copies. Among the successful titles in foreign fiction were Sophie Kinsella’s, I love mini shopping, with sales of more than 160,000 copies and first-time author Maria Dueñas with La notte ha cambiato rumore che, that began with sales of 40,000 copies, confirming a great interest among readers for Spanish fiction.

In Italian fiction, Canale Mussolini by Antonio Pennacchi continued to perform well, selling 200,000 copies (making a total of 265,000) and the new novel by Andrea Camilleri, L’intermittenza (already in its fourth printing) has sold more than 150,000 copies.

In non-fiction there was a confirmation of the success of I segreti del Vaticano by Corrado Augias (160,000 copies), while in the unclassified segment the Fabio Volo phenomenon continued (with sales of over 160,000 copies of Il tempo che vorrei two years after it was first published, making a total of 750,000 copies). There were excellent results form the Oscar Mondadori campaign with an increase in sales of around 8% compared with the previous year. The protagonist during the summer months was the Oscar Grandi Bestsellers paperback edition of Paolo Giordano’s La solitudine dei numeri primi, which sold 280,000 copies in just three months, returning to the top of the bestsellers list with the release of the film based on the novel.

In the third quarter of 2010 Einaudi imporved its performance compared with the situation at 30 June 2010, with total net revenues of €33.8 million (-2% compared with the first nine months of 2009).

Among the best performing titles were: Accabadora by Michela Murgia (120,000 copies in 2010); Tre secondi by Roslund-Hellstrom (51,000); Per l’alto mare aperto by Eugenio Scalfari (51,000); Il giovane Holden by J.D. Salinger (77,000) and the recent Mia suocera beve by Diego De Silva with sales of more than 40s000 copies, La vendetta by Anne Holt (35,000). There was confirmed success for La parola contro la camorra by Roberto Saviano and Prima di morire addio by Fred Vargas. It should also be noted that the editorial plan of Einaudi foresees the publication of numerous titles in the last quarter of the year.

In the first nine months of 2010, Sperling & Kupfer recorded revenues of €18.4 million, a fall of 3.7% compared with the first nine months of 2009, mainly due to a fall in revenues from the sale of rights for add-on initiatives. Of particular note was the great success of Sveva Casati Modignani’s Mister Gregory, published at the end of the first half, which has sold almost 190,000 copies.

Cumulative revenues at Piemme to 30 September 2010 amounted to €34.9 million, an increase of 3.6% compared with the same period of last year.

Fiction and non-fiction lines saw an overall fall of 5.1% compared with 2009, mainly due to a different editorial programme for new titles.

The Junior sector continued its positive trend, in the Stilton line the most significant new titles were Sesto viaggio nel Regno della Fantasia (126,000 copies) and Viaggio nel tempo 3 (79,000 copies). Also of significance during the period was the publication of a celebrative volume to mark the tenth anniversary of Stilton, Caccia al libro d’oro (45,000 copies).

Total revenues by Mondadori Electa were down by 17.6% on the same period of 2009, this was due to the effects of a slowdown in all of the segments in which the company operates. The fall of revenues in the bookshop channel (-29.7%) and the substantial disappearance of add-on sales were not, unlike other years, compensated by revenues on the Cultural Heritage area (-12% compared with 2009) mainly due to the loss of certain museum bookstore concessions (Brera and Cenacolo in Milan, and the Musei Civici in Venice) and Sponsorship sales (-16%). There was, however, a recovery in co-editions (sales of foreign rights), penalised by the strength of the euro against the dollar and the pound.

During the first nine months 2010 Mondadori Education generated revenues of €66.8 million, a fall of 1.8% on the same period of the previous year, essentially confirming its share of the textbook adoptions market. The primary school segment confirmed the results of the previous year, thanks to the five-year rule on adoptions. The first level secondary segment saw an overall fall, despite good results for new titles and new editions.

The second level secondary segment saw a slight fall but confirmed excellent results in the subjects in which Mondadori Education is the market leader. There were good results in the scientific subjects affected by the reforms in high schools. Note should also be made of trend for price reductions in both secondary levels.

• MAGAZINES ITALY

Magazine sales during the summer months, traditionally positive for the magazine market, were positive and resulted in a recovery in terms of circulation.

In this context Mondadori performed better than the market, both in terms of advertising sales and single copy sales through the different channels.

The revenues of Magazines Italy in the first nine months of the year came to €362 million, a slight fall (-1.2%) on the €366.5 million of the same period of the previous year.

Even more significant with respect to the market of reference was the increase in profitability, despite the impact of the cancellation of postal subsidies.

This encouraging performance was based on the following factors:

– a 2.9% fall in circulation revenues, markedly better than the performance of the competitors in a market that lost around 5% (around 9% in terms of copies);

– essential stability in revenues from add-on sales (+1.4%), in absolute contrast to a market that slumped by 22%;

– a moderate re-balancing in advertising revenues (-2.4%), even more contained on a like-for-like basis.

Among the most significant factors during the period were:

– the re-launch at the end of July of Tu Style, supported throughout August by a big advertising campaign and promotional initiatives: to date the weekly has achieved notable results (with sales of over 200.000 copies);

– strong support for weeklies, that made it possible in the summer season to grow newsstand revenues close to the levels of 2009;

– the launch of an intensive campaign of launches of add-on sales, some of which are achieving much better than expected results;

– the ongoing programme of reorganisation in editorial and management structures;

– the reinforcement of the activities of Press-Di, the wholly-owned Mondadori subsidiary operating in distribution and subscription management for the group’s titles and third-party publishers. In addition to the numerous contracts for the distribution of newspapers and magazines acquired in recent years, since 1 October the company will also distribute the products of Sergio Bonelli Editore, leader in comic books;

– the conclusion, at the end of July, of the negotiation between Fieg and the Italian postal for an agreement on postal charges, following the cancellation from 1 April of subsidies which for many years compensated publishers for the inefficiencies of the service. The agreement will make it possible to reduce by around 50%, from 1 September, the charges resulting from the application of the new conditions for the delivery of subscription products.

Circulation

As already mentioned, the market saw an overall drop in newsstand circulation of 9% in terms of copies and around 5% in terms of value, compared with the above indicated -2.9% by Mondadori.

Among the group’s weekly titles, there was a marked improvement in the performance of Tu Style; TV guides held up well, as did Chi, Grazia and Donna Moderna. For monthlies, there was an increase in circulation revenues for the titles in the interiors and cooking segments.

Add-on sales

The add-on sales market, which saw a big slump (-22%), was characterised during the period by some particular phenomena, including an increase in the number of initiatives, the maintenance of relatively high prices and a strong downturn in average sales.

In this context Mondadori confirmed also in the third quarter a performance in marked contrast to the market that is expected to continue for the rest of the year.

The various initiatives in the home video segment and collectables were markedly up on 2009; those in music and editorial products, while less brilliant, were nevertheless satisfactory. In a portfolio of articulated activities, the operations linked to the major titles, including TV Sorrisi e Canzoni and Panorama, remain fundamental

International activities

The international activities of Mondadori Magazines generated excellent result to 30 September 2010, with licensing revenues up by 46%, following the good performance of Grazia UK, Grazia Olanda and the contribution of Grazia Germania and Grazia Francia launched during the period.

Revenues for the sale of advertising in Italy for the international network more than doubled, both on account of new editions and for growth in revenues for existing titles (Grazia UK +10%, Grazia Russia +67%).

The performance of 50-50 joint ventures in Russia and China was decidedly better than last year and markedly better than the budget, particularly in terms of advertising sales.

The Attica subsidiary has felt the effects of the financial crisis in Greece and the Balkans with a fall in advertising revenues of around 22% (-20% on a like-for-like basis). A strong cost reduction programme is already being implemented in order to at least partially compensate for the fall in revenues by the end of the year.

Digital

The online advertising market grew significantly, with, in particular, an increase in display advertising of 17.7% compared with the same period of the previous year (source: Nielsen in terms of value, August 2010).

Advertising sales for Mondadori sites, managed by Mediamond, in the first nine months of 2010 saw an increase of 36%, thanks to a significant push by DonnaModerna.com, the positive results of which confirm the validity of the group’s decision to focus on the women’s market.

• MAGAZINES FRANCE

Mondadori France ended the first nine months of the year with total revenues of €252.6 million (-0.9% on the €254.8 million of the same period of last year). Excluding the operations that have affected the consolidation area (the sale of titles to the joint venture Editions Mondadori Axel Springer S.n.c., the launch of Grazia and the restructuring of the magazine portfolio), revenues would be up by 6.7% compared with 2009.

Circulation

Circulation revenues totalled €175.8 million, a 2.1% fall (+4,5% on a like-for-like basis, compared with the same period of last year, thanks mainly to the launch of Grazia and a significant increase in subscriptions). Being less exposed to economic cycles, the subscription channel, which makes up around 33% of circulation revenues, is an important asset for the group.

This positive performance demonstrates the appropriateness of the strategy of repositioning the portfolio of titles towards the “grand public” market that the group has been pursuing since 2007 and has been accompanies by a constant improvement in the editorial quality of the titles. These results are even more remarkable given the current situation in the magazine sector and have been recognised by the market which has, over the last two years, awarded ten prizes for editorial excellence to our products.

In terms of copies Mondadori France recorded an increase of 3% in circulation, while the market as a whole saw a fall of 1.8%. In addition to the effect of Grazia, the excellent performance of other titles in the portfolio should be underlined, in particular Modes et Travaux (+6.2%), Science et Vie Découverte (+5.7%), Biba (+5.1%), Science et Vie Junior (+4.8%), L’Ami des Jardins et de la Maison (+2.5%), Science et Vie (+2.4%) and Closer (+1.7%).

Advertising

Advertising sales were up 5.5% on the previous year, an improvement that was even more significant on a like-for-like basis (+19.1%).

This excellent performance is above all explained by the growth in advertising sales for the up market (haut de gamme) women’s titles (the weekly Grazia and the monthly Biba) that now account for 26% of total advertising revenues.

The magazine advertising market to the end of September recorded an increase of 8.8% in page numbers (source: Kantar Media). In the same period Mondadori France recorded a very positive performance with an increase of 25.8% in pages and a 1.2 percentage point increase in market share.

Activities during the period

The strategic decisions taken in 2009, the launch of Grazia, the concentration in the joint venture with Axel Springer of the auto sector titles and the closure of marginal titles, have had a positive impact of the accounts in 2010.

Despite strong competition from two new titles (Be and Envy, which, however, interrupted publication at the end of September) the positive performance of Grazia continued with an average of 30 advertising pages in 2010 and newsstand circulation of 177,000 copies.

The activities of the joint venture Editions Mondadori Axel Sprinter, following the concentration of the auto sector titles, continued to show positive results, increasing newsstand sales; the editorial structure is evaluating new formulas for Sport Auto and Auto Plus and working on the development of digital activities.

The policy of cost reduction, began in recent years, continued, with particular attention on industrial costs and general expenses.

• ADVERTISING

Advertising investments in the first nine months of 2010 continued the generally positive trend noted in the first half of the year (+4.8% to August, source: Nielsen) showing, on the one hand, a progressive recovery in “healthy” media, including internet, radio and television, while on the other, ongoing difficulties for print media, within which newspapers (with the exception of the free press) and national commercial advertising remained essentially stable.

Magazine advertising, meanwhile, saw a fall of 8.4%, with the positive changes recorded in certain sectors, FMCGs, fashion, cosmetics and lately even furniture, only partially compensating the downturn in other segments. Despite positive August sales, a general uncertainty continues to hang over the medium in the latter part of the year characterised by different client behaviour on different titles, some of which have bucked the general trend in the market.

Mondadori Pubblicità ended the first nine months of the year with total revenues of €170.2 million, essentially in line, on a comparable basis, with 30 September 2009 (€181.6 million).

Marked changes in the revenue breakdown, such as the termination in November 2008 of the contract with Società Europea di Edizioni S.p.A. and the shift of online advertising sales, from January, to Mediamond, have had a negative impact on 2010 of around 7 percentage points.

After a third quarter in slight decline, the Mondadori titles have remained essentially in line with the first nine months of 2009 (-1.2%): on a like-for-like basis -2.4%.

Weeklies have held up well (+1.2%), thanks mostly to the performance of women’s titles, particularly Donna Moderna, Chi and Tu Style, that was supported by a targeted sales campaign that resulted in a total increase in sales of 35%, coinciding with the re-launch in July (+50% in the third quarter alone). The monthlies remained below the levels of 2009.

In concert with the publisher, activities have continued in the development of digital projects, including the launch of iPad versions of Panorama and Grazia, and the realisation of new events with innovative promotional formats. These include “Fashion & Design 2.0”, organised by Grazia and Interni during the Milan Fashion Week and “Milano Design Weekend”, an event dedicated to the interiors sector that took place in October.

In radio, the positive trend of R101 continued, up 6.2% in the first nine months of the year, and progressively recovering compared with the trend in the market in recent months. The figure is even more significant when account is taken of the comparison with an excellent first quarter in 2009, 7 percentage points ahead of the market. Sales were also good for Radio KissKiss, which began in March of last year.

• DIRECT and RETAIL

The Direct and Retail area generated revenues in the first nine months of 2010 of €181.2 million, a 29.2% increase on the €140.2 million of the same period of 2009.

It should be pointed out that the figures for last year did not include Mondolibri S.p.A., which has only been consolidated since April 2010; on a comparable basis, the increase was of around 7%.

Direct

Cemit saw a 25% increase in revenues, in a market that grew by just 2%.

Since May 2010, Cemit has been joined by Mondolibri, which with its seven thematic book clubs operates in mail-order sales with around 800,000 members.

The revenues of the book clubs were down by 6% compared with 2009; though this was compensated by growth in the e-commerce channel through the Bol.it web site (+34%).

Retail

Retail sales which, from May also include sales from the Mondolibri book shops, grew by 12.1% (5% on a like-for-like basis) compared with the same period of last year.

This increase in turnover was largely due to the expansion of the network, which now totals 570 book shops and multicenters, including both directly owned and franchised stores and Edicolè outlets

• RADIO

Advertising for R101 generated total net revenues in the period of €10.2 million (+5.2% on the €9.7 million in the first nine months of 2009). These are essentially the company’s share of the gross advertising revenues of around €14.7 million, up by 6.2% on the same period of last year.

In particular, in September, R101 recorded growth in advertising sales of 5.3% compared with 2009, in a market of reference that was down (-0.5%; +11.2% cumulative to the end of September: source FCP Assoradio).

The figure, overall lower than the market average, is however positive when account is taken of the fact that in the period display advertising on R101 (which makes up 91% of the radio station’s advertising) grew by 10% on 2009. The fall is therefore entirely attributable to a lower number of special initiatives compared with the first nine months of last year.

R101 is currently examining new projects to be introduced in the early part of next year aimed at further improving the station’s positioning in its targets, revamping the schedule and continuing to build the audience.

EXPECTATIONS FOR THE FULL YEAR

The third quarter saw a confirmation of the indications outlined in the half yearly report: all of the businesses achieved better revenue performance than the market benchmarks and, at the same time, continued to pursue the development of new activities.

Reorganisation objectives were also achieved, both in terms of simplifying processes and reducing operating costs.

These have resulted in a substantial recovery of profitability, which, failing any particular changes in market trends, we expect to continue during the last months of the year, allowing the company to significantly increase its operating profit for 2010, despite higher costs resulting from increased postal charges.

Also the estimate for net profit for the year, the improved operating performance should compensate for the impact of extraordinary items (positive in 2009 and negative in 2010) making it possible to post a significantly better final result than last year.

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SHAREHOLDERS MEETING: APPROVAL OF THE APPOINTMENT OF THREE NEW DIRECTORS

A Shareholders’ Meeting, held prior to the board of directors meeting, approved the enlargement of the board from 11 to 14 members, appointing as directors Roberto Briglia, as an executive director given his role as Group Editorial Director, and Angelo Renoldi, professor of economics and business administration at the University of Bergamo and Carlo Sangalli, chairman of Confcommercio (the Italian association of retailers) as independent non-executive directors.

The board of directors verified the requisites of independence, foreseen by the Code of Conduct for listed companies, of both Renoldi and Sangalli. The other independent non-executive directors already in office are Martina Mondadori, Marco Spadacini, Mario Resca and Umberto Veronesi.

The appointments, approved by the Shareholders, therefore will result in the enlargement of the independent component of the board, in line with the progressive reinforcement of the role of the same, as defined, in particular, by soon to be introduced Consob regulations regarding operations with related parties. These appointments will also further consolidate and support respect for the functions and activities of the board of directors’ internal committees.

The board of directors itself has consequently redefined the composition of the Internal Control Committee and the Remuneration Committee. In particular, the Internal Control Committee is entirely made up of independent non-executive directors, Marco Spadacini, Angelo Renoldi and Mario Resca; and the Remuneration Committee by the independent directors Marco Spadacini and Carlo Sangalli and the non-executive director Bruno Ermolli.

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The executive responsible for the preparation of the company’s accounts, Carlo Maria Vismara, declares that, as per art. 2, 154 bis of the Single Finance Text, the accounting information contained in this release corresponds to that contained in the company’s formal accounts.

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The report for the period to 30 September 2010 is made available, as per current legislation, at the company’s corporate headquarters, Borsa Italiana S.p.A. and on the web site www.gruppomondadori.it

Arnoldo Mondadori Editore S.p.A. today announced that it has made available, at both the company’s headquarters and Borsa Italiana S.p.A., the illustrative reports of the directors for the following items on the agenda of the Shareholders’ Meeting called for 11November 2010 (12 November on second calling).

Ordinary part:

• the appointment of directors, prior to the increase in the number of the members of the board of directors; consequent deliberations.

Extraordinary part:

• changes to articles 9, 11, 12, 14, 16, 17, 27 and 28 of the company statute, also in line with the provisions of legislative decree n. 27 of 27 January 2010 (in compliance with EU Directive 2007/36/CE regarding the exercise of certain shareholders’ rights for listed companies) legislative decree n. 39 of 27 January 2010 (in compliance with EU Directive 2006/43/CE regarding the mandatory annual auditing of accounts and consolidated accounts); consequent deliberations and relevant mandates.

The above-mentioned documentation is also available at: http://www.mondadorigroup.com/Governance/Shareholders-meeting.

The board of directors of Arnoldo Mondadori Editore S.p.A. will present a proposal to the Shareholders’ Meeting called for 11 November 2010 (12 November 2010 on second calling) for the appointment following an increase in the number of the members of the board.

Specifically, the Shareholders will be asked to approve the appointment of two non-executive independent directors and one executive director.

The proposed independent non-executive directors will be Carlo Sangalli, the current President of Confcommercio (the Italian retailers’ association), and Angelo Renoldi, professor of economics and business administration at the University of Bergamo.

This increase in the number of non-executive directors is consistent with the ongoing reinforcement of the role and function of independent directors indicated, in particular, by soon to be introduced Consob regulations concerning operations with related parties.

The nominations put forward would also further consolidate and provide additional support for the functions and activities of internal committees (specifically, the Internal Control Committee and the Remuneration Committee) established by the board of directors of Arnoldo Mondadori Editore S.p.A. as part of the company’s system of corporate governance.

The proposed new executive director is Roberto Briglia, who will bring to the board, as the Group’s Editorial Director, a contribution based on his vast experience in the publishing sector.

The current board of directors, which will remain in office until the AGM for the approval of the Annual Report for the year 2011, is made up by Marina Berlusconi (chairman), Maurizio Costa (deputy chairman and chief executive), Pier Silvio Berlusconi, Pasquale Cannatelli, Bruno Ermolli, Martina Mondadori, Roberto Poli, Mario Resca, Marco Spadacini, Umberto Veronesi and Carlo Maria Vismara.

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The Extraordinary Shareholders’ Meeting of 11 (12) November 2010 will also receive proposals concerning a series of statutory changes concerning compliance with the EU Directive 2007/36/CE relating to the exercise of certain rights by shareholders of listed companies.

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Illustrative reports concerning the items on the agenda of the Shareholders’ Meeting, including professional profiles of the proposed new directors, will be available to the public at the company’s headquarters, Borsa Italiana S.p.A. and on the web site www.gruppomondadori.it (Governance sector) in line with current rulings.

Arnoldo Mondadori Editore S.p.A. has announced that the report for the period to 30 June 2010 is available, together with the independent auditor’s report, at the company’s corporate offices and Borsa Italiana S.p.A. The documents are also available on the Mondadori web site www.gruppomondadori.it (in the “Investor Relations” section).

The Board of Directors of Arnoldo Mondadori S.p.A. met today, under the chairmanship of Marina Berlusconi, to examine and approve the interim report for the first six months of the year to 30 June 2010, as presented by the Group’s deputy chairman and chief executive, Maurizio Costa.

THE MARKET SCENARIO

In the current economic climate signals of a recovery in investments and industrial production have yet to be matched by a turnaround in consumer spending. Figures for the sectors in which Mondadori operates do, however, show that the slight recovery, which began in the first quarter, is continuing.

A BRIEF OVERVIEW OF THE PERFORMANCE OF THE MONDADORI GROUP

Mondadori’s results at the end of the first half of the year show consolidated revenues in line with the first six months of 2009. The figures also show that the company outperformed the market in almost all sectors of reference and generated a marked improvement in profitability.

These results have been achieved thanks to a series of factors that reflect the Group’s business approach:

• the sharp focus on the product and on readers’ needs that has always been a distinctive characteristic of Mondadori.
  Magazine circulation figures, once again better than the market, underline the importance of Mondadori’s constant commitment to a portfolio of titles that are points of reference in their respective sectors, both in Italy and in France;

• a capacity to maintain, at the highest international benchmark levels, the profitability of the Book Division.
  Despite a fall in revenues, due to a publishing schedule more focused on the second half of the year, the Division remains a pillar of the Group’s business portfolio;

• determination in the development of the Group’s leading brands, through its international network.
  Since first hitting the newsstands, almost one year ago, the success of Grazia in France is a demonstration of how the market can respond to products that stand out in terms of quality and content;

• a commitment to the pursuit of simplification in processes and structures aimed at ensuring a recovery of profitability from existing businesses and freeing up resources for new projects.
  In line with the declared objectives, the restructuring plan and various cost containment actions have generated significant results.

The technological changes currently affecting the media sector, with the explosion of different platforms for the distribution of and access to digital content, are changing consumer expectations, needs and models. Publishers consequently need to provide a concrete response to such changes, both in qualitative terms and with sustainable business models.

This is why, in the first half of the year, Mondadori has been engaged in intensive efforts:

• in books, to create the basis for agreements with different operators in order to make a vast selection of the books published by the Group, both new and backlist titles, available in digital formats;
• in magazines, to develop digital versions of the titles which make the most of the characteristics and potential of the new electronic devices and to provide a fresh impulse for the sale of advertising in the digital sector.

GROUP PERFORMANCE IN THE PERIOD TO 30 JUNE 2010

The highlights of the Group’s business results for the first half of the year are provided without reclassification, even if the figures for 2010 have been impacted by higher levels of development costs (mainly for Grazia France) and increased postal charges, imposed at the beginning of April.

Consolidated revenues to 30 June 2010 came to €726.8 million, essentially in line (-0.5%) with the €730.7 million recorded for the first half of 2009.

Consolidated gross operating profit to 30 June 2010 amounted to €54.6 million, an increase of 35.8% on €40.2 million in the previous year, despite taking account of, as indicated above, increased development costs and higher postal charges.

As a proportion of revenues this corresponds to 7.5%, compared with 5.5% for the same period of 2009.

Consolidated operating profit to 30 June 2010 totalled €42.8 million, an increase of 53.4% on €27.9 million in the first six months of 2009, with amortizations and depreciations of tangible and intangible assets for a total of €11.8 million (€12.3 million in 2009).

As a proportion of revenues, a rise from 3.8% in 2009 to 5.9%.

Consolidated pre-tax profit came to €30.8 million (+75% on €17.6 million in 2009), with increased financial charges of €1.7 million.

Consolidated net profit to 30 June 2010 amounted to €15.1 million, more than double the figure of €7.3 million for the same period of last year.

Gross cash flow in the first six months of 2010 totalled €26.9 million, compared with €19.6 million in 2009.

The net financial position went from -€372.9 million at the end of 2009 to -€393 million at 30 June 2010; compared with the same period of the previous year, this represents an improvement of €80.9 million.

Information regarding personnel

As of 30 June 2010 the number of people employed by companies of the Group (both on temporary and permanent contracts) totalled 3,757. On a like-for-like basis, the figure would be 3,525, excluding the staff of Mondolibri, consolidated since May (with a headcount of 232).

Compared with 31 December 2009 (3,750) there is clear evidence of the effects of the Restructuring Plan, above all in Magazines, with a reduction, on a comparable basis, of 225 people (55 of whom are journalists in Italy or France).

The implementation of the Plan will continue for the whole of 2010 and will be completed in the second half of 2011.

Finally, it should be noted that the CCNL labour contract for employees of printing and publishing companies has expired and has not yet been renewed.

RESULTS OF THE BUSINESS AREAS

• BOOKS

The Book Division recorded revenues for the first half of 2010 of €168 million, a fall of 8% on the €186.2 million of the same period of the previous year.

This was principally the result of changes to the publishing schedule for the most important titles, including the new novel by Ken Follett, La caduta dei giganti, which should be published in September.

Nielsen figures for the first six months of 2010 confirm the Group’s leadership in trade books, with a 26.3% share. The single publishing houses in the Division also confirmed their positions among the top ten in Italy: with Mondadori at the top of the list, with a market share of 13%; Einaudi with 5.4%, Piemme with 4.2% and Sperling&Kupfer with 2.2%.

During the first half of 2010 Edizioni Mondadori generated revenues of €55.5 million (-14.9%). Successful new titles published in the period included: Canale Mussolini by Antonio Pennacchi, which was published in March and went on to win the prestigious Strega prize; Il palazzo della mezzanotte by Carlos Ruiz Zafón (with sales of over 250,000 copies), consolidating his position among our key authors in the foreign fiction area; Il fattore Scarpetta by Patricia Cornwell, which sold more than 130,000 copies; La compagna di scuola (80,000 copies) by Madeleine Wickham, better known by her pseudonym Sophie Kinsella.

Of particular note were the results achieved by first-time author Alessandro D’Avenia with Bianca come il latte, rossa come il sangue which, in nine editions, has sold more than 100,000 copies, and La Malapianta by Nicola Gratteri and Antonio Nicaso, which has reached almost 100,000 copies. Also of note was the launch of the new Strade Blu Dark series, with the first two volumes of La Trilogia di Stoccolma by Jens Lapidus.

Mention should also be made, in general books, of the enormous success of the novel by Fabio Volo Il tempo che vorrei (which sold over 120,000 copies in 2010 alone, bringing total sales to 710,000 copies), and the Oscar editions of Gomorra by Roberto Saviano and La solitudine dei numeri primi by Paolo Giordano, both already among the bestselling paperbacks. In Children’s books there was a very positive response to the launch of the new Oscar Junior series, with sales of more than 300,000 copies for the first 35 titles.

Einaudi generated revenues of €23.8 million, a fall of 2.9% compared with the first half of 2009. This was the result of promotional initiatives carried out in 2009, but not repeated this year, that particularly benefited Stile Libero, in the bookshop channel, and the Meridiani and Valla series, in the instalments channel.

Stand out new titles in the first half of 2010 included La parola contro la camorra by Roberto Saviano (with sales of 105,000 copies) and Prima di morire addio by Fred Vargas (78,000).

Mondadori Electa generated revenues during the period of €16.3 million, down 11.9% on the same period of last year. There was a marked fall in book sales (-21%), which, net of the impact of add-on sales, translates as essentially in line with the first half of 2009. In general, given the ongoing difficulties facing illustrated books and art publishing, production levels continued to be strongly contained, with another sharp fall in the number of copies distributed.

There was also a fall in revenues in the Cultural Assets sector (-9%) due to lower sales from museum bookshops resulting from the termination of concessions at the Brera Museum and the Cenacolo in Milan and the Musei Civici in Venice.

However, during the period, two important acquisitions were made: the new Museum of the Twentieth Century in Milan (due to open in November 2010) and the Maxxi Museum in Rome, which opened to the public in May. Thanks also to an increase in the number of tourists visiting the country’s principal museums and monuments, in the organisation of exhibitions area in which the company is active, Mondadori Electa saw an increase in revenues compared with June 2009.

Sperling & Kupfer recorded revenues for the period of €13.9 million (-7.3%). This fall was mainly due to a reduction in the sale of rights for add-on sales initiatives. A total of 164 new titles were published during the period, compared with 187 in 2009, in line with the ongoing focus on the selection of titles for publication. Of particular note was the publication at the end of June of the new book by Sveva Casati Modignani, Mister Gregory, which immediately entered the Italian fiction bestsellers list and the first novels by two interesting new authors, Anne Fortier and Kate Morton.

Mondadori Education generated revenues during the period of €14.3 million (+0.7%). In the primary school area almost all of the adopted texts of last year have been confirmed, integrated with digital content for teachers, and there has been an increase in the range of extra-curricular materials, from which the company expects positive results. Catalogue sales continued to suffer in the first level secondary segment, while new titles achieved reassuring results, which augurs well for the future. Finally, the company confirmed its strong positioning in a series of subjects in the humanities in the second level secondary segment.

Edizioni Piemme ended the first half of 2010 with revenues of €24.2 million, an increase of 8.5% on 2009, thanks to the success of a series of commercial initiatives in the various sales channels and across all product lines.

In the fiction and non-fiction area new titles included Il sussurro della montagna proibita by Siba Shakib (47,000 copies sold). There was a slight fall in fiction sales compared with 2009, due to a reduction in supplies of titles by Khaled Hosseini, now available in paperback; while in Religion there was an excellent performance by A un passo dal baratro by Paolo Brosio (with sales of 60,000 copies since the beginning of 2010).

The Junior area saw an increase in sales compared with 2009 with varying trends: the brand Il Battello a Vapore saw revenues in line with last year, thanks to a range of well-established series, while the Stilton line saw a rise in revenues thanks to the publication of successful new titles.

• MAGAZINES ITALY

In the first half of the year the Italian magazine market was once again conditioned by the tail end of the crisis that affected both national and international publishers in the two-year period 2008 – 2009.

The impact was felt on the advertising front – with magazines struggling more than other media to turnaround a negative trend that has now lasted for almost two years – as well as circulation – where ongoing difficulties persisted in the first half of the year – and, finally, in add-on sales – where there was a further marked downturn.

All of which makes Mondadori’s performance in the first six months quite significant, both in terms of business performance (despite the negative impact of unexpected costs resulting from the cancellation of postal subsidies for subscriptions), and revenues.

The revenues generated by the Magazine Division in Italy in the first half of 2010 amounted to €250 million (-1% on €252.4 million in the same period of the previous year).

These results, after the sharp downturn recorded in 2009, were generated by Mondadori titles thanks to a series of factors:

• circulation revenues (-4%) that clearly outperformed the market, with a strengthening of the Division’s market share;
• an increase in revenues from add-on sales (+2.8%), in marked contrast to the market trend, where there was a fall of more than 30% (in terms of value to May). Underpinning this higher level of stability compared with the competition was the organisation of the business across different product types, the strength of certain brands and a careful selection of the initiatives;
• there was also a further moderate stabilisation in advertising revenues, decidedly more resistant (-1.7%) than the most qualified competitors, in a market that was down by 9.3%;
• revenues – particularly positive in the second quarter, almost in line with 2009 – benefited from a good performance by the weekly titles, while monthlies were decidedly weaker, with the exception of those titles currently being re-launched, including Grazia Casa, Interni, Casa Facile, Cucina Moderna and Panorama Travel.

The action taken by Mondadori in response to a still difficult market was organised along two main lines: the first aimed at reaping the benefits of the restructuring plan, and the second focused on sustaining the development of the product portfolio.

In terms of circulation, in a market which saw a downturn of 9.3% (in terms of volume to May), Mondadori confirmed and strengthened its leadership, with a market share of 35.8% at the newsstands; there was a slight upturn for Tu Style, with a stable circulation of around 200,000 copies, making it one of the best-selling women’s weeklies; both Chi and Donna Moderna performed well in their markets of reference; there was significant growth for Grazia; the new editorial formulas of Casa Facile and Interni; and satisfactory results for the monthlies Salute!, Oroscopo and Giochi, all of which are supplements to TV Sorrisi e Canzoni.

International activities

Thanks to the positive performance of the UK, Dutch and German editions of Grazia, licensing revenues increased in the first half of 2010 by 42%, while advertising sales in Italy for the network doubled, both thanks to the inclusion of new editions and an increase in revenues for existing titles, in particular in Russia, China and Great Britain.

The Attica subsidiary was affected by the financial crisis in Greece and the Balkans and saw a fall in advertising revenues of around 18% (-11% on a like-for-like basis). Energetic action is currently underway on the cost side, the results of which will be seen from the second half, with a positive effect on the company’s results.

• DIGITAL

There was a marked increase in online advertising and, in particular, display advertising was up by 11.6% compared with the same period of the previous year (source: Nielsen in terms of value, to May 2010).

Mondadori has created a new sales company, Mediamond, with a sales force dedicated to online advertising in order to improve the effectiveness of the offer. The decision to focus on the women’s market has already generated encouraging results and the new site of GraziaMagazine.it and the positive performance of DonnaModerna.com have given a new impulse to the sale of advertising on Mondadori sites.

• MAGAZINES FRANCE

The strategic decisions taken in France in 2009 – the launch of Grazia, the extension of the Editions Mondadori Axel Springer joint venture, and the review of the portfolio of titles – have had a favourable impact on the first half of 2010.

Mondadori France generated revenues of €168.4 million, a slight fall (-1.2%) on €170.5 million in the same period of 2009; excluding the titles sold and the contribution of Grazia France revenues were up by 6.6%.

Circulation revenues, which account for 70% of the total, were up by 2% on a like-for-like basis. The change is due to, on the one hand, a slight fall in newsstand sales, in a market that was down by 3% in May (internal figures, in terms of volume), and, on the other, to an increase in subscriptions, which make up an increasingly significant part of circulation revenues, which are less exposed to economic cycles. These results were obtained thanks to careful portfolio management, along with an ongoing focus on product quality.

The contribution of Grazia was of particular importance, raising the rate of growth, net of titles sold or transferred, to +5.3%

There was a marked improvement in advertising sales in the first half of the year compared with 2009. Mondadori France saw advertising sales increase by 21.2%, excluding the titles no longer consolidated, and by a total of 5.8%, thanks to the contribution of Grazia.

In a market that grew by 3.1% (Source: Kantar Media, in terms of volume, to May), thanks to the contribution of important new launches in the women’s weekly segment, Mondadori recorded growth of 22.7%, with a significant increase in the company’s market share, taking it close to the level of its direct competitor.

These results are even more positive if we remember that growth was generated in the high-margin upmarket segment, which now accounts for 22.4% of the advertising revenues of Mondadori France (6.5% in 2009).

The policy of cost reductions carried out over recent years continues also this year and, in addition to the restructuring, the project for the transfer of the company’s offices to new premises has taken on increasing importance. The move, to Montrouge, in the Paris metropolitan area, will take place in January 2011 and will have a positive impact in terms of costs, organisation and efficiency.

The extension of the Editions Mondadori Axel Springer joint venture, with the contribution of all of the company’s titles in the car sector, is already producing positive results, above all with the new formula of L’Auto-Journal, which, in the first five months saw 21.4% increase in circulation and interesting further developments are in the pipeline, particularly for the digital versions of the car titles.

The results of Grazia continue to be excellent – even after the launch of two competing titles (Envy and Be) – with an average of 29.5 advertising pages per issue and newsstand sales of 177,000 copies from the launch to the present.

• ADVERTISING

Advertising investments in Italy in the first five months of 2010 (Source: Nielsen – in terms of value) were up (+3.8%), but continued to show a varied capacity to react, both in terms of the speed and scale of recovery, by the different media as they emerge from different levels of crisis during 2009.

After the second quarter, the improved state of health of online and radio advertising was underlined, there was a progressive recovery in television, while in print media, magazines continued to suffer significantly (-9.3%) while newspapers remained essentially stable. There were however cautious signals of an improvement in investments in FMCGs and cosmetics, and, to a lesser extent in fashion and interiors.

Mondadori Pubblicità ended the first half with total revenues of €119.9 million, in line with 2009 on a like-for-like basis in terms of media (i.e. excluding online and newspapers, no longer in the portfolio in 2010). The marked changes in the breakdown of revenues, including the termination of the contract with Società Europea di Edizione S.p.A. in November, and the switch of online advertising sales from January to the new sales company, Mediamond, have had a negative impact in 2010 of around 5 percentage points.

During the first six months of 2010 sales for Mondadori magazines – characterised by an intense and focused policy of re-launches and an innovative range of technologically enriching activities – recorded a marked advantage compared with the main competitors, thanks to improved sales in the second quarter, with a slight fall compared with the first half of 2009 (-1.6%).

After a clear upturn (over 4.5%) in the second quarter, Mondadori weeklies recorded growth of 2.7%. There was a convincing and progressive consolidation in the women’s segment (particularly with Donna Moderna, Chi and Tu Style); a big success in terms of advertising for the re-launch of Panorama; and a performance that was below that of 2009 for monthly titles, in a market that remained somewhat “unconvinced” by this type of product.

In the radio segment, it should be underlined that R101 closed the first six months of 2010 with growth of 8.6%, compared with the same period of last year, thanks to a second quarter that was up by more than 12%. Meanwhile, sales for Radio Kiss Kiss, which began in March 2009, continued with constant success.

• DIRECT and RETAIL

Mondadori’s Direct & Retail Division generated total first half revenues in 2010 of €111.3 million, an increase of 18.9% on the €93.6 million on the first half of 2009.

It is worth remembering that the figures for last year did not include Mondolibri. Consequently, on a like-for-like basis, growth during the period was around 4%.

Investments in direct marketing in Italy were up by 5.8% in the first five months of the year (Source: Nielsen, in terms of value). In this context Cemit grew in line with the market, developing new opportunities in all of the sectors in which it has operated for years in the role of integrating processes for direct marketing and by expanding its market through a process of internationalisation.

In May 2010 Cemit was joined in the direct sales business by Mondolibri, which, with its six thematic book clubs, has around 800,000 members. Revenues from this business were down by around 6% compared with the first half of 2009, a period when the business was not consolidated.

Mondolibri is also one of the leading national operators in e-book sales, conducted through the web site Bol.it, where revenues were up by 43%, well above the trend in the market as a whole.

The revenues of the Retail Division, which since May include those generated by the outlets of Mondolibri S.p.A., were up by 6.4% (4.1% on a like-for-like basis) compared with the same period of the previous year. This increase was, however, substantially attributable to the development of the network, which now has a total of 564 outlets.

Mondadori Retail (33 own stores, bookstores and Multicenters) towards the end of the first half placed a special emphasis on redefining the offer of the Multicenter formula, making changes to the product mix and reviewing the lay out of the stores in order to make them more accessible.

Sales (+2.5% compared with the first half of 2009) grew sharply in stationery (+19.3%), performed very well for editorial products (+6.4%) and were stable for digital goods (-0.3%). Despite the opening of three new stores in Palermo, Rome and Turin, in the second half of 2009, there was an increase in staff of just 12, in line with the rationalisation policy implemented last year.

Mondadori Franchising generated revenues in the first half of €33.1 million, an increase of 6.8%, thanks to the expansion of the number of affiliates in the chain of book shops and the Edicolè formula (250 and 206 respectively).

Mondolibri, which operates 23 book shops directly and has 52 in franchising, generated May and June revenues (the period of consolidation) of €1.9 million.

• RADIO

In the first five months of the year the radio market grew by 14.6% compared with 2009, highlighting a trend of continuous growth and distinguishing itself as one of the best-performing media (Source: Nielsen, in terms of value).

Advertising sales for R101 during the first half of 2010 came to €7.6 million (+8.6%), with fewer special initiatives than in the same period of the previous year.

In terms of ratings, the new Audiradio survey rewarded R101, which in the first quarter of 2010 had a daily average of some 2.5 million listeners and 7 million over 21 days, an important breakthrough that confirms the Mondadori Group’s radio station as one of the leading national networks.

EXPECTATIONS FOR THE FULL YEAR

In the first six months of the year the volume of the Mondadori Group’s business was in line with that of the previous year, while, at the same time, there was a significant improvement in profitability, despite ongoing investments for the development of both the products in the international network and digital content, in the book and magazine sectors.

In addition to the positive revenue performance by the businesses, the company’s was also able to count on the increasingly effective containment of operating and structural costs. The only negative impact came from higher postal charges, after exceptional increases, from the beginning of April, resulting from the cancellation of state subsidies on the cost of postage for subscriptions.

It is therefore reasonable to suppose that, net of unforeseen circumstances and with ongoing stability in the trends in the company’s markets of reference, Mondadori will be able, for the full year, to further improve the already positive levels of operating profitability recorded in the first half.

§

The executive responsible for the preparation of the company’s accounts, Carlo Maria Vismara, declares that, as per art. 2, 154 bis of the Single Finance Text, the accounting information contained in this release corresponds to that contained in the company’s formal accounts.

Comlpete text (PDF) with enclosures

The Board of Directors of Arnoldo Mondadori Editore S.p.A. passed a resolution today at the proposal of the Remuneration Committee to assign for the year 2010 the options related to the Stock Option Plan set up by the Shareholders’ Meeting on 29 April 2009, with a duration covering the three years 2009/2010/2011.

In particular, the Board decided on allocation of a total of 1,800,000 options relating to 19 total beneficiaries, with a relevant reduction compared to the 47 beneficiaries identified for assignments 2009.

The Plan is set up on annually assigning to beneficiaries personal and non-transferrable options for purchase of ordinary Mondadori shares held by the company as treasury shares – in the ratio of one share (regular dividend rights) for every option exercised – at an Exercise price corresponding to the arithmetic average of the reference prices of the Mondadori share recorded during the period starting from the assignment date of the options back to the same day of the previous calendar month. Exercise of the options is allowed exclusively all together and at once, in the strike periods subsequent to the start date of the thirty-six month vesting periods.

With specific reference to the option assignments resolved today by the Board of Directors for the year 2010, below is the information required under Article 84 bis, paragraph 5 of the CONSOB Regulation no. 11971/1999 and subsequent amendments (the “Issuers Regulation”).

The information is also be available at the Italian Stock Exchange, the headquarters of the company and on the site: www.gruppomondadori.it, under the section Investor Relations.

The information is provided, where applicable, according to outline 7 of Attachment 3 A of the Issuers Regulation.

Complete text (PDF) with enclosures

The Board of Directors of Arnoldo Mondadori S.p.A. met today, under the chairmanship of Marina Berlusconi, to examine and approve the interim report for the first three months of the year to 31st March 2010, as presented by the Group’s Deputy Chairman and Chief Executive, Maurizio Costa.

The market scenario

After a protracted period of decline, in the first quarter there were still no clear signals of a turnaround. In many sectors, however, there was a slowdown in the fall in consumer spending and, in some cases, some encouraging indications of a recovery.

A brief overview of the performance of the Mondadori Group

In this context, in terms of profitability, Mondadori’s operating results continued the improvement that was recorded towards the end of 2009.

A significant part of the Group’s operating profit derived from cost reduction efforts – to which there is an ongoing commitment – making it possible to defend and, in some areas, improve the level of profitability of the businesses.

There was a slight downturn in revenues, but much less marked than in the previous year.

In terms of advertising spending, there was a sharp slowdown in the rate of decline and in some sectors there were important signs of recovery.

GROUP PERFORMANCE IN THE PERIOD TO 31 MARCH 2010

Consolidated revenues in the first quarter of 2010 amounted to €344.7 million, a fall of 2.8% on the €354.5 million of the first three months of 2009.

Consolidated gross operating profit came to €21.2 million, an increase of 49.3% on the €14.2 million of the previous year, despite increased investments for development.

Consolidated operating profit amounted to €15.7 million, up by 96.2% on the €8 million of the first quarter of 2009, with amortizations and depreciations of tangible and intangible assets for a total of €5.5 million (€6.2 million in 2009).

Consolidated profit before taxation amounted to €8.6 million, more than three times the €2.6 million of 2009 despite an increase of €1.7 million in financial charges deriving from the debt restructuring.

Consolidated net profit came to €2.4 million, compared with the loss of €1.8 million recorded in the first three months of last year.

Gross cash flow in the first three months amounted to €7.9 million, compared with €4.4 million in 2009.

In the art books segment Mondadori Electa recorded total revenues of €7.6 million, an 8.4% fall on the first three months of 2009; on a like-for-like basis, in other words net of revenues for the sale of rights for add-on sales operations, there would have been a slight increase (+0.4%) in total revenues.

There was a further improvement in the Group’s net financial position which went from -€372.9 million at the end of 2009 to -€357.2 million at the end of the first quarter of 2010. A positive balance, compared with the first quarter of last year, of €97 million.

Information regarding personnel

As of 31st March 2010, the personnel employed by companies of the Group (both on temporary and permanent contracts) amounted to 3,618 (3,750 in December 2009): a fall of 132 people, 70% of which resulting from the Restructuring and Early Retirement Plan, which is currently underway at the parent company and at Mondadori Pubblicità, and the remainder to the ongoing block on turnover and cost containment.

Compared with the first quarter of 2009 there was a reduction of 308 in the headcount.

RESULTS OF THE BUSINESS AREAS

• Books

The Book Division recorded revenues for the first quarter of 2010 of €80.1 million, a 10% fall on the €89 million of the same period of the previous year.

This shortfall was largely due to changes in the publishing schedule which, compared with 2009, foresees the publication of important titles after the end of the first quarter. These include the new book by Carlos Ruiz Zafón Il palazzo della mezzanotte, which was published in April and has already met with a good response.

During the first quarter of 2010, the Trade Books department announced a programme for the publication of more than 1,000 e-books for Christmas 2010.

Concerning the individual publishing houses, Edizioni Mondadori generated first quarter revenues of €28.7 million (-22.4%): a figure that was affected by a change in the publishing schedule which, compared with the previous year, is more concentrated in the second half.

Of note among the particularly successful titles was the new novel by Fabio Volo Il tempo che vorrei, published last year, which continued to sell extremely well in the first quarter, reaching total sales of 690,000 copies. New titles included: John Grisham’s Ritorno a Ford County (100,000 copies), Madeleine Wickham (alias Sophie Kinsella) with La compagna di scuola (75,000 copies) and the first novel by Alessandro D’Avenia, Bianca come il latte e rossa come il sangue (over 70,000 copies).

During the period the net revenues generated by Einaudi saw an increase of 7.4% compared with the previous year, reaching €13 million, despite a fall of almost 15% in the instalments channel.

Sperling & Kupfer generated revenues of €6.8 million, a fall of 17.1% compared with the first three months of 2009 which benefited from the good sales of Il gioco delle verità by Sveva Casati Modignani.

In the first three months of 2010 the revenues of Piemme amounted to €12.5 million, an increase of 4.2% compared with last year.

Mondadori Education generated in the first quarter 2010 revenues of €2.5 million, a slight improvement on the €2.3 million of the same period of the previous year, in a period of the year, which as usual has a minimal impact o annual revenues.

• Magazines Italy

In the first quarter of 2010, the Italian and international publishing world, while still conditioned by the crisis seen in 2009, began to show some pale signs of stabilising. This was mostly evident in the advertising area overall, while on the circulation front the first months of the year continued to be characterised by persistent weakness, heightened by a further marked downturn in add-on sales.

In terms of advertising sales, consumer magazines appears to be the segment that is finding it most difficult to regain growth: This was particularly true in January and February, while March and April have provided more encouraging signals.

In this context, the Magazine Division in Italy generated revenues of €123.4 million essentially in line (-0.7%) with the €124.3 million of the first three months of last year.

Performance during the period was determined by the following:

• a fall in circulation revenues (-4.3%) in a market that was down by 10.6% (in terms of copies);

• growth in revenues from add-on sales (+3.7%), in marked contrast to the market of reference (in terms of value, -32.5%);

• a limited fall (-4.1%) in advertising revenues, held up by sustained efforts by the sales staff that has added new clients to the portfolio and a range of innovative initiatives that have driven planning across integrated communication platforms including print, web and others (QR Code, Video In Print, Augmented Reality).

Of particular note during the period:

• the re-launch of Interni, Casa Facile, Panorama Travel and Grazia Casa, monthlies that have seen a positive reaction, above all on the circulation side;

• promotional support activities for a number of weeklies that contributed to stabilising circulation and advertising revenues;

• editorial revisions conceived for the re-launch of some core titles (Panorama, Tu Style and Chi), planned for the coming months.

It should be noted that at the end of March the government suspended the long-standing practice – common also in many other European countries – of allowing publishers to take advantage of reduced postal rates for subscriptions. If new measures, that all publishers are pressing for, are not introduced in the short term, this will lead to a 100% increase in postal tariffs , putting additional pressure on the subscription channel.

International activities

In the first three months of the year licensing revenues were up by 24%, thanks to the good performance of the UK and Dutch editions of Grazia and the launch of the magazine in Germany. During the period there was also a doubling of advertising revenues, thanks to new international editions and due to the very negative first quarter of 2009.

With regard to the joint ventures, the activities in Russia and China performed decidedly better than last year, particularly in terms of advertising sales.

The subsidiary Attica began to feel the effects of the financial crisis in Greece with a fall in advertising revenues of around 9% (-2.5% on a like-for-like basis); and the performance in the Balkans continued to be very negative, compared with the first quarter of 2009 in which the negative impact of the crisis had still not been felt.

Digital

In the first quarter of the year, the online advertising market expanded by 3% (in terms of value, source Nielsen). In this context, the organisation of a dedicated sales force with the new sales company Mediamond, and the launch of Graziamagazine.it have given a particular push to online ad sales (+30%); the Group’s web sites for women are also outperforming the market, in particular Donnamoderna.com and Cosmopolitan.it.

Efforts to concentrate resources specialised in digital ad sales have led to an increase in the share attributable to the sales company. This reduces net advertising revenues attributable to the publisher to +13%.

• Magazines France

Mondadori France generated first quarter 2010 revenues of €81.1 million, a 3% fall on the same period of the previous year. A correct evaluation needs to take account of changes in the business in France due to the closure and sale of some titles (some contributed to the EMAS joint venture) and the launch of Grazia, at the end of August 2009. On a like-for-like basis (excluding the titles sold or closed and the launch of Grazia France) revenues would be essentially in line with last year.

Circulation revenues, which account for around 75% of the total, were up by 1.2% (+4.5% on a like-for-like basis), thanks to good results by the magazines, including Biba, Modes&Travaux, Sciences&Vie. In addition to stable newsstand sales there was also a positive result from subscriptions, an increasingly important component of circulation revenues, which is also less exposed to economic volatility.

Revenue growth was the result of the strategic decision by the company to concentrate the portfolio on core titles, as well as a policy of continuous improvement of editorial quality. Of particular importance was the contribution of Grazia, which would up the increase, net of the titles no longer part of the portfolio, to +7.8%.

During the first quarter there was a marked upturn in advertising sales for Mondadori France titles compared with 2009: revenues were up by +4.2%, net of the titles no longer in the consolidation area and with the contribution of Grazia, also thanks to growth in the up-scale segment, which now accounts for 21% of total advertising sales (7% in 2009); total revenues were down by 9.3%.

Compared with the market of reference, which recorded growth of 3% in the first quarter, Mondadori France saw an increase in volumes of 6% (source: reclassified data from Kantar Media).

The cost reduction policy introduced by Mondadori France in recent years, continues also in the current year and, in addition to reorganisation, further savings will accrue from other actions. Among these is an important project for the transfer of all the company’s headquarters to Montrouge in the Paris metropolitan area at the beginning of 2011. This will not only lead to cost savings, but also to other organisational and operational efficiencies.

The expansion of the joint venture with Axel Springer, to which all of the titles in the auto sector have been contributed, has already brought positive results, above all for the new formula of L’Auto-Journal which, from the first issues, has seen a rise in circulation. Further interesting developments are planned in the short term, particularly for the online versions of car magazines

The results of Grazia, even after the launch of two competing titles (Envy and Be), continue to be excellent, with an average over the quarter of 27 advertising pages and newsstand sales of 175,000 copies.

• Advertising

During the first quarter of 2010, felt the weight of significant changes, including the loss, from November 2009, of the titles published by Società Europea di Edizioni (Il Giornale and its supplements) and the transfer, in January 2010, of online sales to the new joint venture Mediamond.

In this context, the revenues of the company in the first three months of 2010 amounted to €49.4 million, a fall of 4.4% on the €51.7 million of the same period of the previous year.

In the context of magazines, sales for Mondadori titles alone were down by 2.9% on the first quarter of 2009, with the weeklies proving stable thanks to the positive performance of the women’s titles.

In radio, ad sales for R101 were slightly up on those of the first quarter of 2009 and activities on behalf of Radio Kiss Kiss, begun in the first months of 2009, continued successfully.

• Direct Marketing

During the first quarter of 2010 Cemit generated revenues of €5.1 million, an increase of 6.3% on the €4.8 million of the same period of 2009, despite a market for direct mail investments that is continuing to decline. During the period the company continued its development and diversification activities for direct communication projects, also with an opening up of foreign activities, and improvements in the quality of processes.

• Retail

Total revenues from the Retail Division amounted to €44.4 million, a 6.2% increase on the €41.8 million of the first quarter of 2009, thanks to a stable performance by the network and partly due to new openings. During the period action continue to contain management costs in order to minimise the impact of a prolonged crisis in consumer spending that shows no sign of coming to an end.

The 32 stores directly managed by Mondadori Retail recorded sales in the first quarter of €27.1 million (+1.1% on the first three months of 2009).

Mondadori Franchising generated revenues of €17.3 million, a 15.3% increase on 31st March 2009, thanks to the development of the bookstore and Edicolè chain, which in the period rose to 456 outlets.

• Radio

R101 generated first quarter 2010 net revenues of €3.1 million, an increase of 3.3% on the €3 million of the same period of the previous year. In the first two months, advertising sales were up by 11.2%, in line with the market; the downturn in March was entirely due to the absence, of a significant special initiative that was a feature of 2009.

EXPECTATIONS FOR THE FULL YEAR

The situation in the markets of reference for the Mondadori Group in the first quarter of the year appear better compared with the end of 2009. In particular, advertising investments have seen improvement in the negative trend and, in some sectors, there has even been a turnaround.

Nevertheless, short-term visibility remains unclear, making it impossible to predict when a solid recovery will get underway. In any case the company is continuing with its organisational restructuring and qualitative investments on products, aimed at improving profitability and defending volumes, maintaining levels that are above the benchmarks.

As regards forecasts for the full year, in the light of the results of the first months, it is possible to restate that, provided there are no unforeseen circumstances, the company expects that the confidence already expressed during the presentation of the 2009 Annual Report, concerning the ability of Mondadori to improve its level of profitability compared with last year, to continue.

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The executive responsible for the preparation of the company’s accounts, Carlo Maria Vismara, declares that, as per art. 2, 154 bis of the Single Finance Text, the accounting information contained in this release corresponds to that contained in the company’s formal accounts.

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The report for the first quarter of 2010 will be available, as per current legislation, at the company’s corporate headquarters, Borsa Italiana S.p.A. and on the web site www.gruppomondadori.it from today

Arnoldo Mondadori Editore S.p.A. today announced that, in line with the preliminary contract stipulated on 8 February, and already communicated to the market, it had completed the acquisition from Società Holding Industriale di Grafica S.p.A. (Bertelsmann Group) of 50% of the share capital of Mondolibri S.p.A..

With this operation – which has been formalised after obtaining the authorisation from the relevant competition and media authorities – Mondadori has increased its interest in Mondolibri S.p.A., to 100%, giving it exclusive control.

The Annual General Meeting of the Shareholders of Arnoldo Mondadori Editore S.p.A., which met today under the Chairmanship of Marina Berlusconi, approved the company’s Annual Report for the year ended 31 December 2009 and deliberated, in line with a proposal resolved by the board of directors on 23rd March and previously communicated to the market, to allocate the entire net profit for the year, amounting to €53,179,772.38 to the company’s extraordinary reserve, with a view to completing the ongoing restructuring process, pursue investments in growth areas and digital and take advantage of eventual development opportunities.

In his report to the shareholders, the Deputy Chairman and Chief Executive Maurizio Costa outlined the highlights of the group’s performance during 2009, already announced on 23 March.

The Shareholders also passed resolution on the following:

RENEWAL OF AUTHORISATION FOR THE BUY-BACK AND UTILISATION OF COMPANY SHARES

Following the expiry of the term fixed for the authorisation issued at the Annual General Meeting of 29 April 2009, the shareholders renewed authorisation to effect share buy-backs, up to the 15% of the share capital. The shareholders also authorised, as per Art. 2357 of the Civil Code, the use of shares involved in such buy back operations or already in the company’s portfolio.

On the basis of the authorisation that has now expired, Mondadori bought on the market a total of 2,270,000 of its own shares, at an average price of €2.69 per share, for a total of €6,127,428.

By taking account of the shares previously in the portfolio, the total number of shares comprising treasury stock is now 22,367,587 (8,62% of the share capital), of which. 17,850,101 are held directly in the Arnoldo Mondadori Editore S.p.A. portfolio and 4,517,486 are held by the subsidiary Mondadori International S.A..

In line with the provisions of art. 144 bis of Consob regulation 11971/1999, what follows is an outline of the buy-back programme authorised by the Shareholders:

1. Aims and underlying motivation

– use company shares for the exercise of options for the purchase of shares assigned to participants in the stock option plans put in place by the shareholders;

– use company shares, either bought or in the portfolio, for the exercise of rights, including conversion rights, deriving from financial instruments issued by the company, its subsidiaries or third parties;

– use company shares, either bought or in the portfolio, as part or whole payment in any eventual acquisitions or equity investments that fall within the company’s stated investment policy;

– take advantage, where and when considered strategic for the company, of investment opportunities, also in relation to available liquidity.

2. Cap on the number of shares that may be bought

The authorisation requested applies to a limit of 15% of the company’s share capital, corresponding to 38,914,474 shares.

Given that the company currently, either directly or indirectly, holds a total of 22,367,587 shares or 8.62% of the share capital – the new authorisation gives to the board the faculty to buy a back a further 16,546,887 ordinary shares, corresponding to 6.38% of the share capital.

3. Method of acquisition and the price range

Buy backs would be effected on regulated markets as per art. 132 of the legislative decree of 24 February 1998 n. 58 and art. 144 bis, para. 1, B of Consob regulation 11971/99 according to operating procedures established by the regulations for the organisation and management of the markets themselves, which, does not permit the direct combination of offers to buy with predetermined offers to sell.

The corresponding minimum and maximum price of sale will therefore be determined at the same conditions that applied to previous authorisations agreed by the Shareholders, i.e. at a unit price not less than the official market price on the day prior to any operation, less 20%, and not more than the official market price on the day prior to any operation, plus 10%.

In terms of price and daily volumes, acquisition operations will in any case be conducted in line with the norms foreseen by the EU regulation 2273/2003, in particular:

– the company will not buy shares at a price greater that the highest price of the last independent operation and the price of the highest current independent offer on the regulated market where the acquisition is made.

– in terms of daily volumes, the company will not purchase a quantity greater than 25% of the average daily volume of Mondadori shares traded on the regulated market and calculated on the basis of the average daily volume of trading of Mondadori shares in the 20 trading days prior to the dates of purchase.

Any operations that are effected will be communicated to the market as per the terms of art. 87 bis, of Consob regulation 11971/1999.

4. Duration

This authorisation will remain valid until the approval of the Annual Report for the year to 31 December 2010, and in any case for a period of not more than 18 months from the date of the shareholders’ approval.

APPOINTMENT OF EXTERNAL AUDITORS

Following the expiry of the non-renewable contract with Reconta Ernst Young S.p.A. for the auditing of the company’s financial statements for the years 2001-2009, the Shareholders’ appointed Deloitte & Touche S.p.A. – on the basis of a proposal from the Statutory Auditors – to conduct an audit of the company’s annual reports and consolidated financial statements, as well as the limited audit of the interim reports for a period of nine years, from 2010 to 2018.

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The company’s Annual Report for the year ending 31 December 2009 approved by the Annual General Meeting of the Shareholders, along with other documentation supplied in conformity with art. 77 of Consob regulation 11971/1999, will be made available from today at the company’s headquarters, at Borsa Italiana S.p.A. and on the web site www.gruppomondadori.it; minutes for the AGM will be available fro 12 May 2010.