Arnoldo Mondadori Editore S.p.A. has announced that the half-yearly report for the period to 30 June 2014, as approved by the Board of Directors on 31 July, together with the external auditors’ report, is now available at the company’s headquarters, on the authorised storage resource 1Info (www.1info.it), on www.gruppomondadori.it (in the Investor Relations section) and on www.borsaitaliana.it.
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 half of the year to 30 June 2014, as presented by the chief executive, Ernesto Mauri.
THE MARKET SCENARIO
In the first six months of the year, the markets in which the Group operates continued to decline compared with the same period of the previous year.
In particular in Italy:
– the book sector saw a downturn of 9% in terms of copies and 6.6% in terms of value compared with the first half of 2013 (Source: Nielsen, figures to 14 June);
– the magazine market saw a fall in circulation of 9.6% (internal data to May), a slump of 14.3% in add-on sales (internal data to May) and a fall in advertising sales of 11.6% (Source: Nielsen, figures to May);
Meanwhile in France:
– magazine circulation was down in the newsstand channel by 8.1%;
– advertising sales were down 9.4% on the same period of 2013 (figures to May: internal data for circulation and Kantar Media for advertising).
GROUP PERFORMANCE IN THE PERIOD TO 30 JUNE 2014
In a context characterised by a marked decline, the Mondadori Group recorded a 10.3% fall in consolidated revenues for the period to €549.2 million, compared with €612.3 million in the first half of 2013; on a like-for-like basis, taking account of the contribution, effective from 1 January 2014, of the advertising sales activities to Mediamond S.p.A., a company consolidated on an equity basis, the reduction was 7%.
Consolidated gross operating profit came to €14.9 million, an increase of €20.2 million compared with the loss of €5.3 million in the first six months of 2013, thanks to the impact of actions on the product, cost reduction efforts and a fall in non-recurring charges. The Magazine area made a decisive contribution to this marked improvement given that, after years of continuous decline, it recorded a total gross operating profit (Italy and France) amounted to €26.3 million, an increase of 50.3%.
This particularly positive result, in excess of expectations, is the result of actions on the product and a reduction in operating costs, which were down by around €70 million (-13.1%).
Consolidated gross operating profit net of non-recurring items amounted to €15.4 million, an increase of 8.5% compared with the €14.2 million of the previous year.
Consolidated operating profit came to €3.6 million, a marked improvement on the -€17.7 million of the first half of 2013, with amortisations of tangible and intangible assets of €11.3 million, compared with €12.4 million in 2013.
Pre-tax profit and consolidated net profit, amounting respectively to -€8.7 million (-€28.2 million in the first half of 2013) and -€11 million (-€27.1 million in the first half of 2013), include higher financial charges due, in part, to higher interest rates resulting from the renegotiation of credit lines concluded in November last year, as well as a higher average level of debt.
The Group’s net financial position on 30 June 2014 showed a deficit of -€368.9 million, an improvement on the situation in the first quarter of the year (-€396.5 million) and in line with the same period of 2013 (-€367.3 million) and at 31.12.2013. In addition to the seasonality of some of the Group’s businesses, the net financial position was affected by expenditure for restructuring and a recovery in investments and benefitted from an influx of €31 million from the placement of a total of 29,953,500 ordinary shares completed in the month of June.
RESULTS OF THE BUSINESS AREAS
In the second quarter of the year the trade books segment felt the impact of the negative economic situation that has slowed down the recovery in consumer spending and the buying of books. This resulted in a further fall in the market which (to June) recorded a fall of 9% in terms of copies and 6.6% in terms of value (Source: Nielsen, figures to 14 June); in the second quarter the fall, in value terms, was of -8% (-5.3% in Q1). The downturn was more marked in the large-scale retail channel and independent bookshops that were down, respectively, by 15% and 7.5% (Source: Nielsen, figures to 14 June).
Substantially confirming the company’s market leadership, the share of the Mondadori Group’s publishing houses was 25.5% (excluding large-scale retail sales), a slight fall compared with the same period of last year that was positively affected by the performance of the bestsellers E l’eco rispose by Khaled Hosseini and Inferno by Dan Brown.
First half revenues generated by the Book area amounted to €128.5 million, a 4.1% fall on the €134 million of the previous year.
The fall in revenues and margins was determined by the aforementioned market trend as well as a different publishing schedule which, compared with 2013, will feature an absolutely significant launch of titles for the Christmas period as well as the publication of new works by the well-know authors in the second half, including, Follett, Grisham, Cornwell, Corona, Littizzetto and Camilleri.
Regarding to e-books, revenues were up by almost 13% compared with the first half of 2013 thanks to a catalogue that is continuously expanding and that currently includes over 7,000 titles.
The fall in revenues had an impact on gross operating profit compared with the first half of 2013. However, targeted actions aimed at cutting costs in different areas, in particular production and logistics, made it possible to mitigate the impact (from €9.8 million in the first half of 2013 to €5.4 million on 30 June 2014).
In a generally uncertain climate, the second quarter saw a continuation of the downturn, albeit at a less marked level than the previous year.
In this context the Magazines Italy area – faced with an overall fall in revenues of 9.9% (-8.3% on a like-for-like basis, considering titles that were closed or sold) that amounted to €160.3 million, compared with €177.9 million in the first half of 2013 – recorded a significant increase in gross operating profit, which rose from €3.6 million to €11 million in the first half of 2014 due to the focus on the segments in which the Group is leader (fashion, well-being, cooking), the launch of new titles (Il mio Papa), the redesign of Panorama and actions aimed at the structural reduction of industrial, editorial and photographic costs, as well as labour costs.
Revenues from Mondadori titles were particularly hit by the negative trends in the markets of reference, but the Mondadori Group nevertheless managed to increase its market share in terms of value to 33.2%, compared with 32.6% in the first half of last year.
In particular:
– circulation revenues fell by 5.9% on a like-for-like basis, in a market that was down by 9.6%;
– gross advertising revenues were down by 8.5% on a like-for-like basis, in a market that was down by 11.6%;
– advertising sales for the web sites of the magazine brands recorded growth of 12.8% on a like-for-like basis compared with the same period of 2013, bucking the trend of a market that was down by 2.1% (Source: Nielsen, to May). Particularly positive results for the web sites Donnamoderna.com (+8.4%) and Grazia.it (+55.9%);
– in a market that in the first five months saw a fall of 14.3% in terms of value (internal source: Press-Di), add-on sales were down by 19.8%, following the decision to select and rationalise initiatives but, by comparison, affected also by the excellent performance achieved in 2013.
International activities
In the first half of 2014 Mondadori International Business recorded a 10% growth in revenues compared with the previous year. The increase was mainly attributable to the Grazia network which now has 23 editions around the world, the launch, last November, of the first international edition under licence of Icon and advertising sales in Italy since last October on behalf of El Pais, Spain’s leading daily newspaper.
In May, as part of the development of the digital activities of the Grazia International Network, it is worth underlining the acquisition of the marketplace London-Boutiques.com, an operation that is part of a more extensive project to launch, in the second half of the year, a global e-commerce platform using the Grazia brand.
With regard to holdings, Attica Publications, leader in the Greek magazine and radio broadcasting markets, after a positive first quarter, saw a fall in advertising revenues; Mondadori Seec Advertising Co. Ltd, the exclusive advertising sales company for the edition of Grazia published in China, saw an increase in revenues of 14% compared with the first half of 2013 and from April, the frequency of publication increased from monthly to weekly; Mondadori Independent Media LLC, the publisher of Grazia in Russia, closed the first half of the year with a fall in advertising revenues of 4%.
In the first half of 2014 the markets of reference in France saw a further decline, both in terms of newsstand sales (-8.1%; internal data to May) and advertising (-9.4%; internal figures based on Kantar Media data, to May).
Mondadori France performed decidedly better than the market keeping the fall to 2% in a market that was down by 8.1% and reporting growth of 50.6% in internet activities.
First half consolidated revenues generated by Mondadori France amounted to €169.9 million, -4% on the €176.9 million in the first half of 2013; on a like-for-like basis, considering the sale of Le Film Français finalised at the end of 2013 and the different number of issues of some titles, the fall was of 3.7%.
There was a marked difference in the performance of advertising revenues on print and for online: while the former saw a fall of 13.5% (-11% on a like-for-like basis), the latter were up by 49.3%, (51.1% on a like-for-like basis), as a result of which, digital sales now account for 10% of the total.
The advertising sales company remained among the main players in the market with a 10.5% share in terms of volume (Source: Kantar Media), making it the second player in the market.
Circulation revenues, that account for over 70% of total revenues, were down by 1.5% (-1,1% on a like-for-like basis):
– newsstand sales were down by 2%; some of the main titles, including Closer, Pleine Vie and Top Santé, saw growth of more than 10%;
– subscriptions remained stable thanks to the strong performance of Télé-Star, Pleine Vie and Top Santé.
During the first half Mondadori France launched a number of new products, such as Le Journal de Lucky Luke, Slam, Histoire & Jeux and Fort Boyard, and completed the redesign of L’Auto-journal Évasion, Diapason, Modes & Travaux, Science & Vie, Top Santé, Grazia and Closer, placing more focus on editorial quality.
The many activities carried out in recent quarters, and still ongoing, have made it possible, as indicated above, to launch new titles and realise significant reductions in editorial, industrial and general costs and thereby widely compensating for the fall in revenues.
Gross operating profit was up by 10.1% to €15.3 million from €13.9 million in the first half of 2013.
With regard to digital activities, since January 2014 advertising sales have been exclusively managed internally, cross-tile editorial teams have been created and some of the main properties have been updated and further enhanced with new functions for tablets and smartphones.
These efforts have had a positive impact on the audience which, in April, the latest Nielsen figures available, had reached 6.5 million unique users (+26% on 2013), with a peak of 7.8 million in January; while on mobile, the increase in unique users was 67% compared with 2013 (Source: Nielsen, to April).
Activities are also continuing aimed at creating new efficiencies, in particular, a plan has been introduced for the reduction of the structure along with a project for the rationalisation of the locations.
The figures for the area are not comparable given that, as already mentioned, from January 2014, the advertising sale activities of Mondadori Pubblicità S.p.A., a subsidiary of Arnoldo Mondadori Editore S.p.A., were contributed to Mediamond S.p.A., a 50-50 joint-venture set up in 2009 by Mondadori Pubblicità S.p.A. and Publitalia ’80 S.p.A..
Revenues generated by the current Mondadori Pubblicità came to €5.8 million, a fall on the revenues generated by comparable activities in the first half of 2013 for the reasons outlined above.
Gross operating profit, that also includes the pro-quota results of Mediamond, consolidated on an equity basis, saw an improvement compared with the first half of 2013 (up from -€3.5 million to -€1.9 million), highlighting the first positive effects of the operation.
The revenues of Mediamond S.p.A. saw an overall increase of 1.8%.
The Mondadori brands (magazines and web) recorded a like-for-like reduction of 6.7% compared with 2013. In particular:
– the fall in advertising revenues for magazine titles amounted 8.5%, in a market of reference that was down by -11.6% (Source: Nielsen, to May);
– advertising revenues for the web sites was up by 12.8% in a segment that was down by 2.1% (Source: Nielsen, to May).
Also in the first half of the year the retail market continued to show signs of weakness in consumer spending. With regard to the products sold, the book segment saw a fall of 6.6%, in terms of value, during the period, a situation that worsened in the second quarter also as the result of a lack of bestsellers. The channel that was best able to contain the downturn in revenues was the bookshop chains channel, compared with independent bookshops and large-scale retail outlets.
In the non-book area, there was growth only in gift-boxes, mobile phones and e-readers, while consumer electronics showed a general slowdown.
The 2013 figures have been reclassified to take account of the configuration introduced in the Retail area from September 2013, when Cemit Interactive Media S.p.A. was included under Other businesses and Corporate.
In the first half of 2014 the Retail area recorded revenues of €92.6 million, an 8.9% fall compared with the €101.7 million of the same period of 2013.
A breakdown of revenues by category shows that books – the most important, accounting for 74% of the total – had the best performance (+3.5%) compared with the market of reference, while consumer electronics continued to record a fall greater than the general trend in the sector.
The negative trend in the club channel continued with a fall in revenues of 20% and, finally, also online sales through inMondadori.it were also down (by around -4%).
The impact on gross operating profit (-€5.5 million from the -€6.1 million to 30 June 2014) of the reduction in revenues from the clubs and the consumer electronics segment was more than compensated by the positive performance of books and the effects of cost reductions.
To contrast the generally recessive economic environment actions, already underway in the first quarter and aimed at recovering profitability, continued. In particular:
– a progressive review of the network with actions to rationalise the sales outlets (the opening of a directly-owned and run bookstore in a new shopping mall, the Nave de Vero, near Marghera, and the closure of a number of franchise outlets), and formats for the development of a new concept for the bookshop of the future;
– the rebranding of the entire network; a new offer, above all in consumer electronics; co-marketing activities with important partners in the banking and telecoms sectors;
– the maintenance of promotional, communication and advertising initiatives to support sales and gain market share for books;
– the continuation of reorganisation efforts with the application of a solidarity procedure (20% compared with 10% in 2013) at the offices in Milan and Rimini.
After a positive start in the first quarter, the second quarter the radio market saw a phase of turbulence that had an impact on the performance of di R101.
Revenues generated by R101 in the first half amounted to €5.9 million, -13.2% compared with the €6.8 million at 30 June 2013
Gross operating profit (which went from -€1.6 million to -€2.7 million) was affected not only by the negative trend in revenues, but also by higher promotional and communication investments made in the second quarter to support the re-launch of the station.
Such efforts in the first half included, the launch at the end of March of the new R101, confirming greater engagement with sports events and partnerships with music events alongside national and international artists and their summer tours; the redesign of the look and content of the web site www.r101.it and the launch in June of the TV channel, on the digital terrestrial channel 66.
The launch of the TV platform, integrated with the radio station and other digital supports, will make it possible to offer a wide-ranging entertainment system.
The first half of 2014 saw the completion of the first step in strengthening the central control of the Digital Innovation area with the arrival of new and specialised resources. This has made it possible to give a greater impulse to digital projects functional to the different business units.
Total revenues were slightly down due to the fall in sales of marketing services (Cemit), while purely digital activities increased by 9.2% compared with the first half of 2013, as a result of the increase in e-books (+13%), the web sites of magazines in Italy (advertising revenues +12.8%) and France (advertising revenues +51.1%).
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Information regarding personnel
As of 30 June 2014, the personnel employed by companies of the Group (both on temporary and permanent contracts) amounted to 3,213, a reduction of 361 (-10.1%) compared with 12 months previously and 223 (-6.5%) compared with December 2013.
Gross of extraordinary items, personnel costs (mounting to €117.4 million in the first six months) showed a significant fall (-20.7%) compared with the figures for the first half of 2013.
The significant fall in the headcount is attributable to important restructuring actions taken between the end of 2012 and last year, and is also influenced some imbalances in the scope of the company. Net of these extraordinary operations, compared with the situation in June 2013, the number of personnel was in any case down by 324 (-9.2%). The cost of personnel on a like-for-like basis, and net of restructuring charges was down by 10.9%.
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EXPECTATIONS FOR THE FULL YEAR
In a market that still shows no clear signs of improvement, the positive performance in the first half – better than expected and the result of actions taken on the product, reorganisation and the reduction of costs, as well as the excellent performance of Magazines, both in Italy and France – makes it possible to estimate for the full year a level of gross operating profit higher than that of 2012, confirming what was stated during the presentation of the 2013 Annual Report and the Report on QI 2014.
Also the second half of the year will see a continuation of the management initiatives aimed at improving the organic capacity of the Group to generate financial resources and actions aimed at the sale/realisation of non-strategic assets, with a view to reinforcing access to the resources necessary for investment.
The net financial position is expected to be significantly better than the level in 2013.
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The executive responsible for the preparation of the company’s accounts, Oddone Pozzi, 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.
The documentation relating to the presentation of the results for the first half of the year to 30 June 2014, will be made available through the authorised storage mechanism 1Info (www.1info.it), in the Investor Relations section of the company’s website www.gruppomondadori.it, on www.borsaitaliana.it and at the company’s corporate offices.
Following the entire subscription of the capital increase of a nominal €3,900,000 through the issue of 15,000,000 new ordinary shares with a nominal value of €0.26 each, as resolved by the board of directors on 17 June 2014, the share capital of Arnoldo Mondadori Editore S.p.A. is currently €67,979,168.40 and comprises 261,458,340 ordinary shares, with a nominal value of €0.26 each (statement, pursuant to Art. 2444 of the Civil Code, filed today with the Register of Companies in Milan).
The modified Articles of Association indicating the new share capital is available from the company’s website www.gruppomondadori.it (in the Governance section) and at the authorised storage facility 1Info (www.1Info.it).
Enclosed is the “Model for the communication share capital modifications” (Model 1) as per Art. IA.2.3.4. of “Instructions and Regulations for Markets Organised and Managed by Borsa Italiana S.p.A.”.
The minutes of the meeting of the board of directors held on 17 June, concerning the capital increase and pursuant to Articles 2443 and 2441 para. 4, second clause, of the Italian Civil Code, is now available at the company’s headquarters and the authorised storage resource 1Info along with the detailed directors’ report, the report by the external auditors Deloitte & Touche S.p.A. and the updated Articles of Association.
The documentation is also published in the Governance section of the website www.mondadorigroup.com and on www.borsaitaliana.it.
This Press Release is not for publication, distribution or circulation, either directly or indirectly, in the United States, Canada, Australia, Japan and South Africa or in any other country where the offer or sale would be prohibited in compliance with applicable laws.
Following the press release issued yesterday, 17 June, Arnoldo Mondadori Editore S.p.A. has announced the completion of the private placement of a total of 29,953,500 ordinary shares with a nominal value of €0.26 each at a price per share of €1.06 and a total value of €31,750,710.
The overall offer can be broken down as follows:
(i) 15,000,000 new ordinary shares with regular dividend rights, equal to 6.09% of the share capital before the operation, deriving from a capital increase divisible for a maximum nominal amount of €3,900,000, with the exclusion of option rights pursuant to Art. 2441 para. 4, second clause of the Civil Code, as resolved by the board of directors on 16 June 2014 in partial implementation of the powers authorised by the Extraordinary Shareholders Meeting of 30 April 2014 pursuant to Art. 2443 of the Civil Code;
(ii) 14,953,500 shares held by the company as Treasury Stock, equal to 6.07% of the share capital.
The placement, which was managed by Banca IMI and UniCredit Corporate & Investment Banking in the role of Joint Bookrunners, was effected by means of an Accelerated Book Building procedure targeted exclusively at “qualified investors” in Italy and foreign institutional investors, pursuant to Regulation S of the United States Securities Act of 1933, and subsequent modifications, and in the United States, restricted to “Qualified Institutional Buyers” pursuant to Rule 144A of United States Securities Act of 1933, and subsequent modifications, with the exclusion of any other country in which the placement would be prohibited by law.
The operation will be completed with the delivery of shares and payment of the amounts due on 23 June 2014.
On completion of the operation, the share capital of Arnoldo Mondadori S.p.A. will amount to €67,979,168.40 divided in 261,458,340 ordinary shares with a nominal value of €0.26.
As part of the operation, Mondadori is committed to a lock-up period of 120 days, in line with market practice for similar operations.
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This Press Release is published for information purposes only, in accordance with Italian law, and should not be construed as an investment proposal, and, in any case, may not be used or considered as an offer to sell nor an invitation or offer to buy or sell to the public financial instruments by Arnoldo Mondadori Editore S.p.A..
The documentation regarding the offering of shares referred to in this press release will not be subject to approval by CONSOB or any other competent authority in Italy or abroad in accordance with applicable law and, therefore, the shares subject to the offer may be offered, sold or distributed in Italy and in other Member States of the European Economic Area which have implemented the Directive 2003/71/EC (the “Prospectus Directive”) (each, a “Relevant Member State”), subject to exemption from the provisions of the law and regulations governing public offerings, exclusively to “qualified” investors (as defined in Article 2(1)(e) of the Prospectus Directive, in accordance with the laws and regulations for implementation adopted respectively by each relevant member state, including, with regard to Italy, Article 26, first paragraph, letter b) of CONSOB regulation 16190 of 29 October 2007, and as referred to in Article 34-ter, first paragraph, letter b) of CONSOB Regulation 11971 of 14 May 1999, and subsequent modifications; herein the “Qualified Investors”), and outside of Italy and the Relevant Member States, to institutional investors in accordance with the provisions of Regulation S (“Regulation S”) in the U.S. Securities Act of 1933, and subsequent modifications (the “U.S. Securities Act”) and, in the United States, for “Qualified Institutional Buyers”, pursuant to Rule 144A of the U.S. Securities Act.
In the United Kingdom, this Press Release will be distributed only to, and is directed only at, Qualified Investors (i) who have professional experience in matters relating to financial investments as per Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and subsequent modifications (the “Order”) or (ii) as per Article 49, second paragraph, letters a) to d) of the Order or (iii) to anyone to whom this announcement may be lawfully transmitted under applicable law (collectively, “Relevant Persons”).
This Press Release is not for distribution, directly or indirectly, in the United States (as defined in Regulation S), Canada, Australia, Japan or South Africa or any other country in which the offer or sale of such shares would be prohibited by law.
This Press Release does not constitute or form part of, an offer for sale to the public of financial instruments or a solicitation to buy financial instruments. The financial instruments mentioned herein have not been, and will not be subject to registration under the U.S. Securities Act or in Australia, Canada, Japan and South Africa or in any other country where the offer or sale would be subject to the approval of local authorities or in any case prohibited by law. The financial instruments mentioned in this Press Release may not be offered or sold in the United States of America or to US persons, unless they are registered pursuant to the US Securities Act, or hold an exemption to registration applicable under the terms of the US Securities Act.
This Press Release is not, and will not be, mailed or otherwise forwarded, distributed or sent in or from, the United States of America or in, or from, any other country where such distribution is unlawful, or intended for publication for general circulation in those countries, and the Target (including custodians, nominees and trustees) are forbidden from mailing or otherwise forwarding, distributing or sending this Press Release in, or from, the United States of America or to, or from any other country where such distribution is unlawful, or to publications with a general circulation in such countries.
Oddone Pozzi was today appointed Chief Financial Officer of the Mondadori Group and will be in charge of the Finance, Procurement and Information Technology department, reporting to Ernesto Mauri, Chief Executive of Mondadori Group; Oddone Pozzi has also been appointed to the board of directors, replacing Carlo Maria Vismara who has resigned.
Born in Varese in 1963, Oddone Pozzi graduated in economics from Bocconi University in Milan. In NCR Italy since 1989, with increasing responsibilities, locally and internationally in both financial and management areas, he was appointed Director of Administration Italy.
In 1998 he joined Sisal Group as Group Director of Administration. Later in 2000, Oddone Pozzi entered Camuzzi Group as Group Director of Administration, Planning & Control and Information Technology and in 2002 in Enel Gas he was appointed Director of the Administration, Planning and Control, Real Estate and Information Technology.
In 2004 he joined Ventaglio Group as Group Chief Financial Officer in charge of Administration, Finance, Planning and Control as well as Information Technology and Investor Relations.
In 2006 he was appointed Co-Chief Executive Officer of Giochi Preziosi Group with powers to Administration, Planning & Control, Finance, Human Resources, Logistics, Information Technology and Legal and Corporate Affairs.
The board of directors of Arnoldo Mondadori Editore has approved the sale of a maximum of 29,953,500 shares
This Press Release is not for publication, distribution or circulation, either directly or indirectly, in the United States, Canada, Australia, Japan and South Africa or in any other country where the offer or sale would be prohibited in compliance with applicable laws.
The board of directors of Arnoldo Mondadori Editore S.p.A. has approved the offering of a maximum of 29,953,500 ordinary shares, to be effected by means of a private placement reserved exclusively for “qualified investors” in Italy and foreign institutional investors, in accordance with the provisions of Regulation S in the U.S. Securities Act of 1933, and subsequent modifications and, in the United States, for “Qualified Institutional Buyers”, pursuant to Rule 144A of the U.S. Securities Act of 1933, and subsequent modifications any case, with the express exclusion of any other country in which the placement would be prohibited by applicable laws (“Target”).
The approved operation is functional to finding new resources in the capital market in order to strengthen the financial structure in support of the development objectives of the Group.
The proposed operation will also enable the company to expand, while limiting the dilutive effects for existing shareholders, of the shareholder base.
The overall offer can be broken down as follows:
(i) a maximum of 15,000,000 new ordinary shares with regular dividend rights, equal to 6.09% of the current share capital, deriving from a capital increase divisible for a maximum nominal amount of €3,900,000 with the exclusion of option rights pursuant to Art. 2441 para. 4, second clause of the Civil Code, as resolved by the board of directors today in partial implementation of the powers authorised by the Extraordinary Shareholders Meeting of 30 April 2014 pursuant to Art. 2443 of the Civil Code;
(ii) 14,953,500 shares held by the company as Treasury Stock, equal to 6.07% of the share capital.
Both the new and Treasury Stock shares will be offered as part of the private placement, by means of an Accelerated Book Building (ABB), reserved to the Target.
To this end, with regard to the operation, the company appointed Banca IMI and UniCredit Corporate & Investment Banking, as Joint Bookrunners.
The definitive price for the new shares, which will be the same as that for the sale of treasury stock, will be determined at the conclusion of the book building process, in compliance with the criteria resolved by the board of directors as well as in compliance with the dispositions of Art. 2441, para. 4, second clause of the Civil Code regarding the exclusion of option rights within a limit of 10% of the share capital.
The book building process will begin immediately and may be concluded at any time. The final terms will be promptly communicated to the market.
In the context of the operation, Mondadori has made commitments to a lock-up period of 120 days, in line with market practice for similar operations.
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This Press Release is published for information purposes only, in accordance with Italian law, and should not be construed as an investment proposal, and, in any case, may not be used or considered as an offer to sell nor an invitation or offer to buy or sell to the public financial instruments by Arnoldo Mondadori Editore S.p.A.
The documentation regarding the offering of shares referred to in this press release will not be subject to approval by CONSOB or any other competent authority in Italy or abroad in accordance with applicable law and, therefore, the shares subject to the offer may be offered, sold or distributed in Italy and in other Member States of the European Economic Area which have implemented the Directive 2003/71/EC (the “Prospectus Directive”) (each, a “Relevant Member State”), subject to exemption from the provisions of the law and regulations governing public offerings, exclusively to “qualified” investors (as defined in Article 2(1)(e) of the Prospectus Directive, in accordance with the laws and regulations for implementation adopted respectively by each relevant member state, including, with regard to Italy, Article 26, first paragraph, letter b) of CONSOB regulation 16190 of 29 October 2007, as referred to in Article 34-ter, first paragraph, letter b) of CONSOB Regulation 11971 of 14 May 1999, and subsequent modifications; herein the “Qualified Investors”), and outside of Italy and the Relevant Member States, to institutional investors in accordance with the provisions of Regulation S (“Regulation S”) in the U.S. Securities Act of 1933, and subsequent modifications (the “U.S. Securities Act”) and, in the United States, for “Qualified Institutional Buyers”, pursuant to Rule 144A of the U.S. Securities Act.
In the United Kingdom, this Press Release will be distributed only to, and is directed only at, Qualified Investors (i) who have professional experience in matters relating to financial investments as per Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and subsequent modifications (the “Order”) or (ii) as per Article 49, second paragraph, letters a) to d) of the Order or (iii) to anyone to whom this announcement may be lawfully transmitted under applicable law (collectively, “Relevant Persons”).
This Press Release is not for distribution, directly or indirectly, in the United States, Canada, Australia, Japan or South Africa or any other country in which the offer or sale of such shares would be prohibited by law.
This Press Release does not constitute or form part of an offer for sale to the public of financial instruments or a solicitation to buy financial instruments. The financial instruments mentioned herein have not been, and will not be subject to registration under the U.S. Securities Act or in Australia, Canada, Japan and South Africa or in any other country where the offer or sale would be subject to the approval of local authorities or in any case prohibited by law. The financial instruments mentioned in this Press Release may not be offered or sold in the United States of America or to US persons, unless they are registered pursuant to the US Securities Act, or hold an exemption to registration applicable under the terms of the US Securities Act.
This Press Release is not, and will not be, mailed or otherwise forwarded, distributed or sent in or from, the United States of America or in, or from, any other country where such distribution is unlawful, or intended for publication for general circulation in those countries, and the Target (including custodians, nominees and trustees) are forbidden from mailing or otherwise forwarding, distributing or sending this Press Release in, or from, the United States of America or to, or from any other country where such distribution is unlawful, or to publications with a general circulation in such countries.
Arnoldo Mondadori Editore S.p.A. has announced that the interim report for the first quarter of the year to 31 March 2014 is now available at the company’s corporate offices, on www.borsaitaliana.it and www.gruppomondadori.it (Investor Relations section).
Also available to the public at the company’s corporate offices, on www.borsaitaliana.it and www.gruppomondadori.it (Governance section), are the minutes of the ordinary and extraordinary sessions of the Annual General Meeting of the Shareholders held on 30 April 2014, together with the modified text of the Articles of Association.
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 quarter of the year to 31 March 2014, as presented by the Chief Executive, Ernesto Mauri.
THE MARKET SCENARIO
At the macroeconomic level, there were still no signs of an improvement in Italy or France, the countries of reference for the Mondadori Group, in the first months of the year.
In particular, there was a continued downturn in both the book and consumer magazine markets compared with the same period of the previous year.
In Italy:
– the trade books market was down both in terms of copies sold and value (-6.8% and -5.3% respectively);
– in the two-month period January-February the magazine market was affected by a further decline in advertising spending (-14.7%): and both circulation and add-on sales were also down, by -12.8% and -19.3% respectively.
In France:
– circulation, only in the newsstand channel, was down by 8.1%;
– advertising was down by 10% (internal data).
MONDADORI IN THE FIRST QUARTER 2014
The consolidated revenues of the Mondadori Group were down by 8.3% to €268.3 million: on a like-for-like basis, taking account of the attribution from 1 January 2014 of the advertising sales to Mediamond, consolidated on a net equity basis, the reduction was of -6.5%.
Despite the difficult context, all of the Mondadori businesses – in particular Magazines Italy – performed better than in the corresponding period of the previous year, with the single exception of books that will have a much stronger editorial programme in the second half of the year.
The activities carried out in the period on the products and the results of actions taken to cut operating costs have resulted in an improved consolidated EBITDA that was up €10.2 million on the same period of 2013 (+€ 5.6 million in 2014 compared with -€4.6 million in 2013).
Moreover, net of non-recurring items, there was also an improvement in gross operating profit, which rose from €0.1 million to €5 million.
The results achieved to date with the marked reductions in operating costs, which have focused on industrial, logistical and editorial costs, make it possible to forecast an improvement in the savings objectives indicated in the plan (€100 million by the end of 2015). In terms of personnel, in the first quarter there was a further reduction of 166 people (-4.8%) and the total headcount is currently 356 down on the figure at 31 March 2013 (-9.8%).
GROUP PERFORMANCE IN THE PERIOD TO 31 MARCH 2014
The following table presents an overview of the figures for the first quarter of 2014. It should be remembered that the figures are not comparable due to the contribution of the advertising sales business activity of Mondadori Pubblicità S.p.A. to Mediamond S.p.A., which became effective from 1 January 2014.
Consolidated net revenues came to €268.3 million, a fall of 8.3% on the €292.7 million of Q1 2013; net of the effects of the contribution of the advertising sales business the fall was of 6.5%.
Consolidated gross operating profit net of non-recurring items showed an improvement of €5 million, compared with the €0.1 million of the previous year.
Consolidated gross operating profit rose to €5.6 million, compared with a loss in the same period of the previous year of €4.6 million.
Consolidated profit before taxation showed a loss of -€5.8 million (-€15.6 million in 2013) with amortisations of €5.5 million (€6 million in 2013) and financial charges of €5.9 million (€5 million in 2013).
There was a consolidated net loss for the period of €6.4 million, compared with -€15.3 million in 2013.
The Group’s net financial position shows a deficit of €396.5 million, compared with -€363,2 million at 31 December 2013, but in any case lower than the same period of last year. The period was significantly affected by the restructuring costs of the previous year and investments in the educational area.
Information regarding personnel
At 31 March 2014 permanent and temporary staff in the companies of the Group, totalled 3,270 and total labour costs for the period amounted to €59.3 million (-16.7% million compared with €71.2 million on the same period of 2013).
Total like-for-like headcount, taking account of the integration of advertising sales in Mediamond (that involved the transfer of 45 employees), was down by 8.7% (or 311 units); labour costs, also net of the impact of restructuring, was down by 11% (or €7.7 million).
These reductions are the result of a range of reorganisation and restructuring operations, begun between 2012 and 2013, the effects of which are being felt month by month.
Two other operations, finalised in March, should also be noted: the sales of the magazine titles Ciak and PC Professionale and the closure of the Mondadori Direct logistics centre in Brescia with the consequent concentration of operations at the Mondadori book depot in Verona.
· BOOKS
In the first quarter of 2014, there was a downturn in the trade books market, both in terms of copies sold and revenues (-6.8% and -5.3% respectively; Source: Nielsen), compared with the same period of 2013.
The Mondadori’s market share remained stable, confirming the Group’s market leadership.
First quarter revenues for the area came to €56.8 million, a 10.1% fall on the €63.2 million in Q1 2013.
In trade books, the Group’s first quarter performance, with revenues down by 9.6% on 2013, was affected by evident difficulties in certain channels, in particular large-scale retail, and in the paperback segment, as well as an editorial programme that was not especially strong.
In any case, the list of the top selling 2,500 titles in the quarter, which accounts for 42% of the market in terms of copies, saw the Mondadori Group accounting for over a third, thanks to positive results in both bookstores and large-scale retail. In the top 10 bestsellers list for the quarter, the Mondadori Group was responsible for the publication of 4 titles.
Also of significance in the trade area was the launch, at the beginning of May, of the first ten titles in the Flipback format, a new book product that is one of the most important new editorial initiatives of the year thanks to the particularly innovative characteristics: the size, the paper and the way in which it is read.
In e-books, the growing trend in download revenues continued (+57% on the previous).
As regards educational books, the first quarter was characterised by the seasonality of the business and consequently revenues in the period were not significant.
The trend in the market of reference and the consequent trend in revenues of the Book Area resulted in a fall in gross operating margins compared with the first quarter of 2013. However, the effect of the downturn was mitigated thanks to specific efforts to reduce costs in a number of areas, in particular production and logistics. The figures for the first quarter were significantly affected also by the investments to reconfigure the Mondadori Education catalogue, that markedly increased the number of new titles produced during the period.
· MAGAZINES ITALY
The first three months of 2014 saw the evident effects of the rationalisation policy for the magazine portfolio (the closure of the titles published by the joint-venture ACI-Mondadori and the sale of PC Professionale and Ciak), continuing improvements to product quality (the relaunch of CasaFacile and redesign of Panorama) and the launch of a new weekly Il mio Papa.
All of this, along with the cost reductions made in recent years and, in particular, in 2013, resulted in a marked improvement in gross operating profit, which rose from €2.6 to €7.5 million compared with the first quarter of 2013, despite the fall in revenues.
The Magazines Italy Area generated Q1 2014 revenues of €81.3 million, an 8.4% fall on the €88.8 million of Q1 2013.
In particular:
– circulation revenues for Mondadori titles were affected by the negative scenario and, despite out-performing the market (-12.8%: internal data: Press-Di), were down by 5.6%, net of titles closed or sold;
– advertising revenues were down by 7.4%, in a market that lost 14.7% (Source: Nielsen, February);
– there was substantial growth in advertising sales for the web sites of the magazine brands (+24%), despite a market that was down by 6.3% (Source: Nielsen, February);
– add-on sales contained the decline in revenues to 14.4%, in a market that lost 19.3% (internal data: Press-Di).
International activities
Mondadori International Business ended the first quarter of 2014 with revenues that were in line with those of the previous year. The slight fall in revenues from royalties related to licensing was compensated by bigger commissions on advertising sales made on behalf of foreign partners in the Italian market (total sales in the quarter were up by 9% on the same period of 2013).
Among the editions launched in the last year, of particular note is the performance of the first edition of Icon, distributed in Spain in partnership with Gruppo Prisa since last November. In terms of advertising sales, Mondadori International Business has expanded the number of foreign publishers for which it operates as an agent.
In terms of investments, Mondadori Seec Advertising Co. Ltd, the advertising sales company for Grazia China, recorded a 12% growth in advertising revenues in the first three months of 2014 compared with the same period of 2013 and from April the frequency has been increased to weekly; Mondadori Independent Media, the joint-venture that publishes Grazia in Russia, recorded first quarter revenues in line with the previous year, despite the difficult political situation in the country that in part had an impact on advertising spending; Attica Publications, Greece’s leading magazine publisher and a major radio broadcaster, benefitted in the first quarter in advertising sales that were up compared with 2013 (+5% in print and +4% on radio).
· MAGAZINES FRANCE
The Magazines France Area generated Q1 revenues of €81.7 million, a slight reduction (-1.6%) on the €83 million of Q1 2013; given the change of scope, due to the sale of Le Film Français in December 2103 and an additional issue in 2014, compared with the previous year, of Télé-Star, Télé-Poche and Auto-Plus, the fall in revenues is steady at 2.2%.
In the first quarter of the year circulation revenues, which account for around 73% of the total for the period, were stable (-0.1% on a like-for-like basis). Like-for-like newsstand sales were down by 1.4%, an excellent result given the current state of the market (-8.1% at the end of March; Source: Mondadori France Diffusion): of particular note were the sales of the weekly Closer (+25% in terms of volume) and the monthlies Pleine Vie (+24%) and Top Santé (+25%) and the positive reactions to the recent launch of new products, such as 750g, Slam and Histoire & Jeux. Subscription revenues, meanwhile, were stable (-0.8% on a on a like-for-like basis).
In terms of advertising sales, in the context of a difficult market (-10%; internal source), Mondadori recorded a 10.5% drop in revenues, on a like-for-like basis.
In the first quarter of 2014, Mondadori France, significantly increased its digital revenues (+41.3% on 2013); the growth came from the activities of the properties (+40.6%) as well as from the pure player NaturaBuy (+46%). There was also a significant increase in traffic, with 7.8 million uniques, also as a result of the scoop by Closer.
Advertising sales for the sites, managed internally since January 2014, recorded 39% growth in the first quarter and now accounts for 9% of the total advertising revenues of Mondadori France.
A number of initiatives launched in recent years now make it possible to realise significant economies of scale, in particular with regard to overheads, industrial costs and the cost of managing subscriptions, making it possible to increase gross operating profit, despite a fall in revenues.
In terms of cost reductions, efforts continue to improve efficiency, in particular, in the first months of the year, a voluntary redundancy plan was introduced (with the aim of reducing the headcount by between 10% and 15% in 3 years) and well as a plan to bring the entire staff together under one roof (in December 2014).
· ADVERTISING
The consolidated figures from the area are not comparable given that, as already mentioned, from 1 January 2014, the advertising sales business of Mondadori Pubblicità S.p.A., a subsidiary of Arnoldo Mondadori Editore SpA, were contributed to Mediamond SpA, the 50-50 joint-venture set up in 2009 by Mondadori Pubblicità SpA and Publitalia ’80 SpA. For Mondadori this operation was part of a wider process of innovation of the business model that will contribute to the further affirmation of the Group’s leadership thanks to a new approach, supported by significant synergies and models of offer more suited to the new conditions of the market.
The revenues from the activities of the current Mondadori Pubblicità amounted to €3.9 million; which, on a like-for-like basis and net of the business contributed to Mediamond, were slightly up.
Gross operating profit, that includes the pro-quota results of Mediamond, showed a marked improvement compared with the first quarter of 2013, highlighting the positive effects of the aforementioned operation.
In particular, the first quarter revenues of Mediamond, which is consolidated on an equity basis, taking account of the revenues generated by Mondadori Pubblicità in the same period of 2013, were up by 12.3%.
Specifically:
– the print and radio segments (the part contributed by Mondadori Pubblicità) recorded an increase in revenues of 8.5% (-7.4% for print, compared with a market average of -14.7% at the end of February, and revenues that more than doubled for radio, also as a result of the big changes compared with the previous year following the addition to the portfolio of new radio stations, including Radio Italia, from mid-April 2013, Radionorba and Radio Subasio, at the end of 2013, and Radio Sportiva, from the beginning of 2014);
– advertising sales for the web increased by 24% in a market that was down by 6.3% (Source: Nielsen, February).
The market of reference for the Retail Area was particularly affected by negative trends of the book market and of consumer electronics, which saw a general downturn in the period, with the single exception of e-readers, that saw double-digit growth, but always within strict limits.
In Q1 2014 Retail Area – which as 19 directly-owned bookstores, 315 franchised bookstores, 186 edicolè, 8 multicenters and 21 club bookstores, and the e-commerce activities of InMondadori.it – generated revenues of €47.2 million, a fall of 6.9% on the €50.7 million of the same period of 2013.
Of particular note during the period was the market share of Retail Area in the book sector which rose from 13.7% in 2013 to 14.3% in 2014, also as a result of renewed communication and promotional activities.
There was a continuation of the negative trend in the club channel that has seen a fall in revenues of around 20%. And, finally, also the sales generated through the InMondadori.it site were down by 4.7%.
In terms of gross operating profit, compared with the same period of last year, the franchise channel remained profitable and the directly-owned outlets (bookstores and multicenters) saw a consistent recovery in margins thanks to the closure of a number of non-profitable bookstores.
In the club channel, the effects deriving from the rationalisation of the network of stores and recruitment efforts made it possible to maintain a level of profitability comparable to that of the previous year.
Also the e-commerce channel benefitted in the first quarter from the reductions in structural costs.
In the context of a generalised recession, a number of activities have already been put in place aimed at the recovery of market share and profitability. In particular:
– the progressive revision of the network and the format of the stores;
– communication activities and advertising aimed at sustaining sales and building market share, in particular for books;
– the ongoing rationalisation of Club recruitment activities (-13%);
– strict cost controls on the management of sales outlets and the renegotiation of rents;
– ongoing reorganisation efforts: the application of solidarity contracts (20% compared with 10% in 2013) at the central offices in Milan and Rimini and the exit from the activities of the business of the management of logistics for the club and on-line channels, now run by the parent company.
After a significant downturn in 2013, the advertising market in Italy started the year weakly, recording a further slide, in February (Source: Nielsen) of 4.3% with all media in negative territory with the sole exception of radio, which grew by 7.5%.
In this context, advertising sales for R101 generated revenues of €2.6 million, in line with the same period of the previous year.
Thanks to a series of actions to review and optimise the structures and the different timing of promotional support and communication, gross operating margins while remaining negative, nevertheless improved.
The end of March, confirming the importance attributed to the radio station within the Group, saw the presentation of the new R101 with a renewed editorial line, a new logo, a new pay off “the Music” and a series of new features for listeners. These changes were accompanied by intense promotional activities in support of the new format, with the launch of partnerships with TV programmes and the reinforcement of links with Italian and international music, thanks to the involvement with tours by a number of internationally renowned artists and groups
During 2013 the Digital Innovation Area was set up with the aim of not only accelerating growth in the digital market, but also structuring the processes of innovation and identifying new business development opportunities. The new structure is engaged in the development of marketing services and e-commerce activities, as well as providing support for the activities of Cemit Interactive Media SpA.
In the first months of 2014, in line with already established programmes, efforts continued to strengthen the various teams with the hiring of new resources dedicated to CRM, the spread of the Mondadori loyalty card, marketing services and the technological development of new projects to provide direct support for existing digital activities inside the book, magazine and retail areas.
During the period, the activities of the recent acquisition Anobii was included in the scope of the area.
In the first quarter of the year turnover remained stable compared with the first months of 2013, as a result, on the one hand, of significant growth in e-books (+57%) and the web sites of the Italian magazine titles (+24%) – including Donnamoderna.com (+23.8%), Grazia.it (+43.5%) and Panoramauto.it (+5.2%) – and in France (+39%); and, on the other hand, a reduction in the revenues of Cemit and inMondadori.it.
EXPECTATIONS FOR THE FULL YEAR
In a market context that is still not showing signs of improvement, the positive results of the first quarter, the result of actions taken on the products, the reorganisation and cost reductions, make it possible to forecast a higher level of profitability (EBITDA) for the full year than 2012, confirming what was already stated at the time of the presentation of the 2013 Annual Report.
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The Board of Directors of Mondadori also approved the 2013 Sustainability Report, prepared according to the guidelines of the GRI standard G3.1, with the application level B+.
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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.
The documentation relating to the presentation of the results for the first quarter of 2014 is available at the company’s registered office, on the web site www.borsaitaliana.it and on the web site www.gruppomondadori.it (Investor relations section).
The Annual General Meeting of the Shareholders of Arnoldo Mondadori Editore S.p.A., met today under the Chairmanship of Marina Berlusconi, to examine the Group’s consolidated financial statements that show a consolidated net loss of €185.4 million and to approve the company’s Annual Report for the year ended 31 December 2013. The Annual General Meeting also deliberated, in line with a proposal resolved by the board of directors, to make up the entire net loss for the period of the parent company, amounting to €314,970,500.44, by drawing the corresponding sum from reserves.
The Shareholders also passed resolution on the following items on the agenda:
RENEWAL OF AUTHORISATION FOR THE BUY-BACK AND UTILISATION OF TREASURY SHARES
Following the expiry of the term fixed for the authorisation issued at the Annual General Meeting of 23 April 2013, the shareholders renewed authorisation to effect share buy-backs, up to a limit of 10% 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.
It should be noted that, during the period of the previous authorisation, the company bought made no buy-backs or utilisations of company shares.
The total number of shares comprising treasury stock held by Arnoldo Mondadori Editore SpA is currently 14,953,500 (6.067% of the share capital).
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. Underlying motivation
– to 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;
– to 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;
– to take advantage, where and when considered strategic for the company, of investment opportunities, also in relation to available liquidity;
– to 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.
2. Cap on the number of shares that may be bought
The authorisation refers to a limit of 10% of the share capital, or 24,645,834 shares. Given, as indicated above, that the company currently directly holds a total of 14,953,500 shares, the new authorisation consequently foresees the possible acquisition by the Board of Directors of an additional 9,692,334 ordinary shares, or 3.933% of the share capital.
3. Method of acquisition and price range
Buy backs would be effected on regulated markets as per art. 132 of Legislative Decree n. 58 of 24 February 1998 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
The authorisation for the buy-back and utilisation of company shares will remain valid until the AGM for the approval of the Annual Report for the year to 31 December 2014, and in any case, for a period of not more than 18 months from the date of the Shareholders’ resolution.
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REMUNERATION REPORT
The Shareholders approved the policy outlined in the first section of the Remuneration Report, for fiscal 2014, regarding the compensation of directors and executives with strategic responsibilities.
RENEWAL AND ATTRIBUTION OF POWERS TO THE BOARD OF DIRECTORS PURSUANT TO ARTICLES 2443 AND 2420-TER OF THE CIVIL CODE
In extraordinary session, the Shareholders adopted, in line with the proposals of the Board of Directors, resolutions, pursuant to the terms of Articles 2443 and 2420-ter of the Civil Code, regarding the powers of the Board to effect a capital increase and issue convertible bonds.
Specifically the Shareholders resolved:
– the renewal of powers already granted to the Board of Directors by the Shareholders on 29 April 2009 and due to expire at the end of its five-year term, regarding, in accordance with Articles 2443 and 2420-ter of the Italian Civil Code, the attribution of powers to the Board of Directors to increase, with no expectation of excluding option rights, the share capital by a maximum nominal amount of €78,000,000 and to issue convertible bonds for a maximum nominal amount of €260,000,000. The renewal was approved at the same conditions as that about to expire and not used by the Board for a further period of 5 years, in line with the maximum term foreseen by law;
– the attribution to the Board of Directors, for the same five-year period, of additional power to increase the share capital, within the limit of 10% of the existing share capital and excluding option rights, in accordance with Articles 2443 and 2441, clause 4, second paragraph, of the Civil Code.
The resolutions for renewal and granting of powers are motivated by the opportunity to maintain and attributing to the Board of Directors the authority to implement, more effectively, efficiently and flexibly, with respect to the resolutions of the Extraordinary Shareholders’ Meeting, capital transactions aimed at strengthening the financial structure to support the development objectives of the Group, and specifically, as previously disclosed to the market, both the consolidation of business lines with higher added value and a recovery of profitability in the magazine area through both external lines and, in particular, in the digital area.
With specific reference to the powers to effect a capital increase with the exclusion of option rights within the limit of 10% of the existing share capital, an offer addressed to third parties could constitute a valuable way of increasing the free float and make it possible to maintain at all times an adequate level of liquidity, or be functional for the entry into the capital of the company of accredited investors, while limiting the dilutive effects for existing shareholders.