Month: July 2015

The Board of Directors of Arnoldo Mondadori Editore S.p.A., held on today’s date, examined and approved the half year financial report at 30 June 2015 presented by the CEO Ernesto Mauri.

GROUP PERFORMANCE AT 30 JUNE 2015

In the first half year period of 2015 net consolidated revenues amounted to euro 517.1 million, down 4.8% against euro 543.3 million of the same period in 2014. A progressive improvement (-3.3%) was recorded in the second quarter against the performance of the first quarter (-6.2%).

EBITDA before non-recurring items registered an increase of 32%, from euro 18.1 million in the first half of 2014 to euro 23.8 million this year, with a percentage on revenues rising from 3.3% to 4.6%; consolidated EBITDA improved by 7.9%, totalling euro 19 million vs. euro 17.6 million of 30 June 2014. The recovery of profitability is even more significant net of non-recurring items (which had a negative impact on the result for approximately euro 5 million, mainly due to restructuring costs).

This performance is the result of a rigorous management policy. In particular:
– the majority of the business areas posted reduced incidence of the cost of goods sold, specifically the Book Area and the Retail Area, due to a more effective management of operating processes and to a targeted pricing policy;
– the rising incidence of variable costs on revenues is mainly attributable to the Magazines France Area and is referred to increased mail tariffs for subscriptions;
– the reduction in fixed costs is higher than the drop in revenues and was also reached through the implementation of a cost containment policy for third party services and rents;
– employee headcount at the end of the half year period was down by 144 people (-4.5%) against the first half year of 2014, due to the ongoing review of the organizational structures; cost of personnel consequently dropped by 4.6% against the previous year, essentially in line on revenues (20.9%).

Quarter after quarter, this result confirms the greater efficiency achieved by the Group across all business areas, especially in the Books and Magazines Italy Areas, as a result of the industrial and organizational review implemented over the last two years.

In the first half year of 2015, consolidated EBIT amounted to euro 9.2 million, up 32% against euro 7 million posted in the same period of 2014, as a result of the above-mentioned increased EBITDA and reduced amortization and depreciation.

Consolidated profit before taxes is positive for euro 0.6 million against euro -5.3 million at 30 June 2014; in the first half year of 2015, financial costs amounted to comprehensively euro 8.5 million, considerably down against euro 12.3 million of the same period in 2014, as a result of reduced average net debt for the period and average total cost.

Taxes in the period totalled euro 2.8 million (euro 2.1 million in the first half year of 2014).

Consolidated net result from continuing operations, after minority interest, was negative for euro 3.4 million, remarkably up against the euro 8.6 million loss registered at 30 June 2014.

The result from discontinued operations in the first half year of 2015, negative for euro 8.8 million, includes the same-period result of the Radio business area (up from euro -2.5 million at 30 June 2014 to euro -1.8 million) as well as depreciation of Monradio operations in order to bring their value in line with the fair value resulting from the offer received on 30 June 2015 by R.T.I. S.p.A.

The Group’s net financial position at 30 June 2015 was equal to euro -326.5 million, up against euro -368.9 million of 30 June 2014 as a result of the significant Group’s cash generation – especially from operations – over the last twelve months; the comparison with the value at 31 December 2014 (euro -291.8 million) includes the effects of the seasonal fluctuations typical of the business.

At 30 June 2015, cash flow from operations in the last twelve months is positive for euro 59.6 million; ordinary cash flow (after cash-out relative to financial charges and taxes for the period) is equal to euro 31.5 million, continuing the rising trend registered in the four previous quarters.

Cash flow from extraordinary operations is positive for euro 10.9 million despite cash-out for restructuring actions, and results from the capital gain deriving from the disposal of an asset in the Retail Area and from the collection of tax receivables accrued in previous years.

BUSINESS AREAS

• BOOKS

In the first six months of 2015, the Trade Books area continued the trend already shown in the first quarter, down 2.7% vs. 30 June 2014 (source: GFK, value in June).

In this context, Mondadori Group confirmed its position as market leader with a 24.4% market share.

During the period, the Group has 4 titles in the ranking of the 10 top bestsellers books and was awarded the Strega Prize 2015 with La ferocia written by Nicola Lagioia (Einaudi) and the Strega Giovani Prize 2015 with Chi manda le onde written by Fabio Genovesi (Mondadori).

In the first six months of 2015, Mondadori Group’s Books Area recorded revenues for euro 123 million, down by 4.3% against euro 128.5 million of the same period of 2014.

Revenues from the Trade Books registered a higher decline than the market, influenced by a selective publishing policy aimed at increasing profitability. Mondadori’s positive performance in the second quarter benefited from the distribution of Grey, the new novel by E.L. James, which continues the Fifty shades of grey trilogy: launched on July 3rd in 500,000 copies, Grey is already an outstanding bestseller, with over 200,000 copies sold in the first two weeks.

Revenues from the download of e-books rose by 18.6% against the first six-months of 2014, with a 6.1% share of digital sales on the total revenues of Trade Books (4.7% at 30 June 2014).

In the first six months of 2015, revenues from Educational Books grew by 12.4% against the same period of 2014. The Education segment is characterized by the seasonal effects of the school textbook business, whose revenues are typically generated in the second half of the year.

EBITDA in the Books Area, net of non-recurring items, despite dropping revenues (-4.3%), posted a significant increase (+65.8%) from euro 5.1 to 8.5 million as a result of a more effective management of operating processes deriving from the radical restructuring process implemented in the Trade Area. Concurrently, the actions aimed at reducing fixed costs and cost of personnel continued.

Reported EBITDA, including a higher incidence of restructuring costs compared to last year (euro 3.2 million in 2015 against 0.5 million in 2014), which were concentrated in the first part of 2015, is equal to euro 5.2 million, up by approximately 12% against the same period of 2014 (euro 4.7 million).

• MAGAZINES ITALY

In Italy, despite the negative scenario recorded in the market in terms of both circulation – down by 6.5% (internal source, newsstand channel, in May) – and sales from advertising – down by 3.6% (source: Nielsen, in May) – Mondadori confirmed its position as market leader with a 32.3% market share in circulation.

Overall revenues of the Magazines Italy Area amounted to euro 153 million, down by 6.1% (-5.7% on a like-for-like basis, considering magazines sold in March 2014), against euro 162.9 million in the first six months last year.

More specifically, revenues from circulation decreased by 7.6% (-6.8% on a like-for-like basis), however showing a significant recovery in the second quarter compared to first-quarter data.

The drop results from the combined effect of the reference market performance and of the rigorous policy adopted in the selection of the most profitable promotional initiatives.

Revenues from advertising sales in the print segment dropped by 6.3% (-6% on a like-for-like basis), while web advertising (-0.7%) performed better than the reference market trend (-2.2% source: Nielsen, in May), posting a +2.5% growth in the second quarter of the year, also thanks to the positive results of Grazia.it (+7.3% against the first six months of 2014). On the whole and on a like-for-like basis, sales from advertising on Mondadori (print + web) brands dropped by 5.6% during the same period.

Revenues from add-on products decreased by 10.6% against the first six months of 2014 as a result of rationalization actions aimed at support profitability, even if they post a progressive recovery vs. the first quarter of 2015.

EBITDA of the Magazines Italy Area, net of non-recurring items, posted a remarkable improvement, up 28.6% (from euro 8.2 million to euro 10.5 million) as a result of the effective review of the publishing and operating organization as well as of promotional activities, despite the downward revenue trend determined by market conditions and by project selection policies.

Reported EBITDA confirmed the growth trend, rising from euro 9.1 to 9.8 million as a result of the above-mentioned actions and of the progressive recovery of advertising sales, even if the first half year of 2014 benefited from non-recurring items amounting to approximately euro 1 million, deriving from the contribution to Mediamond.

Traffic data show an overall audience rate equal to 6.7 million unique users with a 41% growth against the same period of the previous year (source: Audiweb, in May), also thanks to the performance of Grazia.it (+38%) and Panorama.it (+11%).

• MAGAZINES FRANCE

In France, the magazines market showed a downward trend, both in advertising sales (-10.9% in May, source Kantar Media) and in circulation, which is down 5.2% in the newsstand channel (in May, internal source, excluding the extraordinary edition of Charlie Hebdo in February, which influenced the French magazines market in the first half year).

In the first six months of 2015, revenues from Mondadori France equalled euro 166.6 million, down 2% against euro 169.9 million in the same period in 2014, essentially confirming the trend of the first quarter.

Revenues from circulation (approximately 75% of total revenues) recorded a slight decline (-1.9%) against the previous year. In particular:
– the newsstand channel recorded a 7.3% reduction; the comparison with 2014 results is affected by the exceptional performance of January 2014, resulting from the publication of the “Hollande scoop” on Closer; net of such exceptionality, revenues from circulation dropped by –5,2%, in line with the reference market;
– on the other hand, the subscription channel posted a 0.6% growth, partly off-setting the newsstand channel decline.

Revenues from advertising sales (print + web) were down 5.2% against the same period of 2014, but performance differed between offline and online products: digital advertising (14% of total advertising revenues) grew over 23%, partially offsetting the drop in traditional print advertising (-8.5%), performing better than the reference market.

Mondadori is confirmed as second top player in the magazine advertising market, with a market share (in volume) of 10.3%.

EBITDA, net of non-recurring items, is stable against last year, totalling euro 16.1 million, even if the first half year of 2014 benefited significantly from the “Hollande scoop” published in January by the magazine Closer.

Mondadori France has continued the process of rationalizing structures and containing editorial costs, and it will be extended through 2015 in order to further adjust the organization to market changes and to sustain profitability, also limiting the impact of the increased postage fees associated with subscriptions and of some promotional investments. Reported EBITDA, equal to euro 14.4 million, is down 5.7% against the first half year of 2014 (euro 15.3 million), due to higher restructuring costs.

The fall in traditional activities stopped at 3.5%, while diversification activities (about 8% of total revenues) grew by 18.2% mainly as a result of the development of digital activities (+18.6%), with special emphasis on the growth of advertising sales of the properties (+23.5%).

The total number of readers of Mondadori France magazines reached 8.3 million unique users, up approximately 19% against 2014, also as a result of the progressive digitalization of the editorial teams.

• RETAIL

In the first six months of 2015, the Retail Area posted revenues for euro 85.7 million, down 7.4% against euro 92.6 million of the same period last year (in line with the trend of the first quarter), mainly as a result of the disposal of the flagship store located in corso Vittorio Emanuele in Milano.

Books are the predominant product category (77% of the total) and outperform the reference market on a like-for-like basis by approximately 3 percentage points.

Revenue highlights from the single sales channels: direct bookstores are substantially stable (-0.6%); franchise bookstores are substantially stable in the books category, with a drop in the non-book sector; the book category in megastores (on a like-for-like basis) posted a positive performance and consumer electronics started to grow again; the online channel grew (+2.5%), especially for books, which outperformed the market by over 5 percentage points (+8.5% vs. +3.1% of the market); the trend in the book club segment is in line with the structural decline expected in the medium-term development plan (-13.5%).

EBITDA of Mondadori Retail, net of non-recurring items, totalled euro -3.2 million, clearly up (+37.1%), against euro -5.1 million in the same period of 2014. This result derives from two main elements:
– the improved product margin, especially in the book category and in consumer electronics, achieved thanks to actions aimed at network and format review (during this half year, the new megastore was opened in via San Pietro all’Orto, in Milano, in June), promotion containment and well-studied product assortment;
– the extended implementation of cost reduction measures determined a lower incidence of promotional expenses and a significant reduction in personnel costs and overhead.

This increase, compared to the first six months of 2014, is visible in the majority of the sales channels. Reported EBITDA remarkably improved in the first half year period, from euro -5.5 million in the first six months of 2014, which included restructuring costs for euro 0.4 million, to euro -2.8 million of the same period this year.

• DIGITAL

In the first half year, total revenues from digital activities posted a 8% increase against 30 June 2014 (euro 25.6 million against euro 23.7 million at 30 June 2014). The incidence of digital activities on the Group’s total revenues is 5%, against 4.4% in the first six months of last year.

The purely digital activities that cut across all business areas posted increased revenues by 12.1% against the first six months of 2014.

The digital marketing service activities posted revenues for euro 6.2 million, down from euro 6.4 million in 2014, as a result of the shift of some projects relative to Cemit traditional activities, only partially offset by the launch of digital and multimedia products.

OUTLOOK FULL YEAR 2015
During this half-year period, the Group carried on the process aimed at strategically rationalizing portfolio activities and some non-core assets disposal in order to further strengthen its competitive position in the core businesses and eventually exploit any upcoming opportunities. This strategy includes the already mentioned transfer of the majority interest of the Group’s radio business.

Based on the Group’s positive performance in these first six months, on the ongoing optimization of operating processes and cost structure, as well as on the measures aimed at mitigating the downturn in revenues due to the performance of the market, it is reasonable to confirm the 2015 projections of a growing EBITDA at Group level.

Consistently with the description above and notwithstanding the higher investments and possible changes in the Digital Area aimed at ensuring future development of the Group, the net financial position is also expected to improve against 2014 year end.

The documentation relating to the presentation of the first half-year period results is made available to the public on the authorized storage device 1info (www.1info.it) and on www.gruppomondadori.it (Investor Relations section).

The Executive Manager responsible for drafting the corporate accounting documentation – Oddone Pozzi – hereby declares, pursuant to Art. 154 bis, par. 2, of the Finance Consolidation Act, that the accounting documentation contained in this press release corresponds to the Company’s accounting entries, books and results.

#ENTERgraziait and #anditwasallYELLOW are the hashtags launched today to accompany, in a countdown, the new Grazia.it web site that will be online in late July.

A site that will feature a number of innovations while maintaining a sense of continuity, relying on the strength of a brand that started in Italy, and today is present around the world with a network of 24 international editions and a multi-channel system.

“A reference point for the world of fashion and an authoritative observatory able to anticipate and interpret trends, also through an exclusive network of influencers and bloggers, Grazia.it has enjoyed steady growth over the past two years, both in terms of advertising, with an increase in revenues of over 70%, and in terms of audience, with a 67% increase in the number of unique users,” said Davide Mondo, chief executive of the advertising sales company Mediamond.

A success confirmed by the entire Grazia system and Grazia Italy which, with an average circulation of 158,000 copies and has recorded continuous growth in newsstand sales: +8% in the first five months of the year (source: ADS).

 

On the strength of these results, Grazia.it decided to further enhance its strengths, focusing on the essential, freshness and elegance to re-innovate its looks and design strategy.

These are just some of the new features presented this morning to the advertising world during a breakfast meeting held at the Bamboo Bar at the Armani Hotel in Milan; an exclusive opportunity for top clients to get a preview of the features of the new site of the Mondadori magazine.

From the end of July Grazia.it users will seethe enhancement of the layout: the adoption of the colour yellow, a distinctive element of the Grazia system of internationally and, to ensure greater readability and lightness, an interplay with the colour white, as well as images, always of the highest quality. The choice of an exclusive and very distinctive font will further enhance the brand identity.

More space will also devoted to the site’s trend setters, the IT Bloggers and IT Girls, that will give expression to emerging trends with the continuous involvement of the users.

Grazia.it wants to be a step ahead also in terms of navigation: the site will interpret the new demands of users with a mobile first approach, to optimize both the use and the user experience, thanks to a new flow for reading and sharing, also private, content, in order to further strengthen the relationship with readers.

The character of influencer of Grazia.it will also emphasised with a content to commerce approach to make the brand’s offer more complete.

On the advertising side, Grazia.it will be presented to clients with an enhanced use of native advertising: specific formats are ready to welcome clients’ special initiatives and branded content. Visibility for advertisers will also be guaranteed by advertising space that will accompany users step by step while browsing.

A big summer party for Chi, the Mondadori weekly edited by Alfonso Signorini, to mark its 20th anniversary. The setting, on 22 July, will be that of Twiga at Forte dei Marmi.

After the exclusive party in Milano at the Palazzo Serbelloni in March, Italy’s most widely read ‘people’ magazine, will also blow out the candles at the most modish beach club in Versilia.

 

From 9 am until 6 pm, guests at the beach club will be able to visit the exhibition featuring 20 covers that have marked the history of the weekly, which has been set up inside Twiga and also pick up a free copy of the magazine which for the occasion carries a special inside feature dedicated to its first 20 summers: 20 years of great stories and personalities as seen through the attentive, ironic and inimitable style of the magazine.
For those who would like to enter into the world of glamour of the magazine, from 6 pm visitors can meet with the editor Alfonso Signorini: an occasion not to be missed to toast the magazine’s 20 years of life together.

There will, of course, also be a number of promotional activities and entertainment for guests organised by the sponsors of the event: Shiseido, Rebecca and Ipanema.

The hashtag to follow the event on social networks is #Chi20estate.

Mondadori Store is opening its doors to the world of art with a series of initiatives to promote contemporary artistic expression at the Megastore in Piazza Duomo in Milan.

 

Inaugurating this new cycle of events will be the Italian artist Marco Lodola who has created an installation for the Mondadori Megastore in Piazza Duomo entitled Eden; a neon installation that portrays a luminous dancer, symbolising feminility and uncontaminated Eden, holding a red apple, the colour of life and passion. The work by Lodola – who has been active in sculpture with pop-art inspired luminous installations for many years – will be visible to passers-by from the front of the Piazza Duomo Store and is a brand new homage to Milan, recalling the advertising posters of the past that illuminated the city centre in the 1960s.

This autumn, meanwhile, will see the launch of St-Art, artist of the month: in which the Mondadori Megastore in Piazza Duomo will feature work by young artists, along with live performances and temporary exhibitions.

The project, developed in collaboration with Milo Goj’s Art Relation, aims to promote emerging artists under 40 and bringing them into contact with a broad-based public. A calendar of exhibitions with which the Mondadori Store wants to draw people to art and its young exponents, also with the possibility of buying works and creating a place for exchange and debate with the artists and the curator.

The first artist to exhibit in September as part of the St-Art project will be Marco Abisso: a Milan-based sculptor and painter, born in 1980, and graduate of the Brera Academy of Fine Arts in Milan, who uses a range of materials in his work that includes metal, wood and oils.

Grazia Germany, launched in 2010 following the agreement between Mondadori and G+J/Klambt Style Verlag, is celebrating its fifth anniversary with a cocktail party at Villa Necchi in Milan. The event, organised by the Mondadori Group’s International Network, will be an occasion to mark the anniversary and share the celebration with Italian clients.

The German edition of the Mondadori magazine quickly established it self in Germany as a multimedia fashion brand and has seen a continuous growth in readership, thanks to a formula that is able to combine the quality of a monthly with news and the dynamism of a weekly.

 

These characteristics have made the magazine, edited by Claudia ten Hoevel, one of Germany’s most fascinating fashion weeklies, able to offer its readers a mix of entertainment and information, as well as the best of fashion, beauty and the latest trends.

“We wanted to celebrate our 5th anniversary by supporting the achievements we’ve made with new and exciting projects. In fact, in 2015 we have planned six big issues,” announced Lars Rose and Frank Stahmer, chairmen of the board of G+J/Klambt Style Verlag. “By the end of the year the weekly will be redesigned in the layout and enriched with new fresh contents”, Stahmer and Rose concluded.

The celebrations of the German edition of Grazia will culminate in October, the month of the publication of the Big Birthday Issue, a special issue marking the fifth anniversary of the magazine, followed by an exclusive party in Germany, to be attended by celebrities and leading figures from the world of international fashion.

With a print run of 500,000 copies, Italy is the first country, outside the US and the UK, to publish the new novel by E L James.

After the success of the Fifty Shades of Grey Trilogy, with worldwide sales of over 125 million copies, in just 4 days, the new novel, GREY sold more than a million copies in the United States, beating all previous records.

 

Seen through the eyes of Christian Grey, his thoughts, reflections and dreams, E L James offers readers a new perspective of the love affair that has enthused millions of readers around the world.

Christian Grey loves to have control over everything: his world is ordered, methodical and entirely empty until the day that Anastasia Steele bursts into his office with her enchanting body and splendid chestnut hair. He tries to forget her, but is overwhelmed by an emotional storm that he can’t quite understand and is unable to resist.
Unlike all the other women that Christian has met before, the shy and ingenuous Ana seems to reach straight to his heart – a cold and injured heart – and see beyond the image of the successful businessman and his exclusive and luxurious lifestyle.
With Ana, will Christian be able to banish the nightmares of his childhood and the ghosts of his past that torment him every night? Or will his obscure sexual desires, his obsession with control and the self-hatred that fills his soul push Ana away and destroy the fragile hope that she offers him?

Find out, from 3 July with Grey.

Arnoldo Mondadori Editore S.p.A. acquires from Gruner und Jahr Management GMBH, a company of the Bertelsmann Group, 50% of the share capital of the joint-venture Gruner+Jahr/Mondadori S.p.A., of which Mondadori already holds 50%.

This operation will give Mondadori 100% ownership of Gruner+Jahr/Mondadori S.p.A. and exclusive control of the company.

“The acquisition of 100% of Gruner+Jahr/Mondadori is in line with our strategy of consolidating the Group’s leadership in the Italian magazine market by concentrating on the strongest titles with the greatest potential for digital development”, declared Ernesto Mauri, chief executive of the Mondadori Group. “These include Focus, Italy’s most widely read magazine and a perfect example of how a highly successful magazine can become the hub of a multichannel system, from takes in print, to the web, social media and TV. The portfolio includes digital brands such as Nostrofiglio.it portal, which in just a few years has become leader in the parenting segment with a positioning that will integrate perfectly with out current offer”, Mauri concluded.

Gruner+Jahr/Mondadori, the joint venture established in 1990 between the Mondadori Group and Gruner+Jahr, publishes Focus, Italy’s most widely read magazine, with over 5 million readers monthly and total average monthly sales of 367,000 copies in 2014. The success of Focus has also created the spin-offs Focus Storia (total average sales of 86,000 copies in 2014), Focus Junior (total average sales of 117.000 copies in 2014), as well as Focus Pico and Wild. In 2005 the company launched the Italian edition of the international brand Geo.

Alongside the magazines, the company has a network of websites including Focus.it (3 million unique users) and the parenting portal Nostrofiglio.it (2.9 million average unique users January-May 2015).

Gruner+Jahr/Mondadori recorded total revenues in 2014 of €22.9 million.