Month: November 2020

Icon, the Mondadori Group’s male fashion and lifestyle magazine is on newsstands from tomorrow with a collectors’ issue dedicated to sport, with Claudio Marchisio, former champion of the Italian national team, for the first time in the extraordinary role of guest editor.

Together with the editorial team led by editor Andrea Tenerani and editor-at-large Federico Sarica, Marchisio has created a special issue of Icon to celebrate the symbolic values of the world of sport, that remain relevant even in these difficult days: commitment, sharing, belonging, and excitement.

This is illustrated by the exclusive stories of the talented protagonists featured on the cover, authentic contemporary icons, alongside Claudio Marchisio, the footballers Matthijs de Ligt and Pierluigi Gollini.

At the heart of the issue, sport, ranging across the pages of the magazine, from interviews with great champions, to fashion, beauty and lifestyle features, and all related to the passions of today’s man, lifestyles and trends through the global approach that characterises the brand’s successful formula.

“In these difficult times, I often find myself retracing the happy moments of my life,” Claudio Marchisio begins in the letter to the Icon community that opens the new issue. “All these memories are always accompanied by a common, perhaps even banal, gesture, but one which we certainly take too much for granted: a hug. Strangely, looking back on one of my goals, I never remember the moment when the ball crossed the goal line, but I always remember the embrace of my teammates. I hope that my wife won’t read this, but even of my marriage I don’t remember the moment when we said: “I do”, but I remember very well the beauty of our embrace immediately after.” Now a commentator on the matches of the Italian national team, the new Marchisio talks about his plans for the future in a conversation with Icon: “I have always lived with the motto of my favourite team, which is Juventus obviously, in my head: ‘Winning is all that matters.’” But often victory lies in the path you take to get there. Unexpected things that happen to you, how you train, how you change and mature as you pursue your goals. Whether you reach them or not. In life, for me, this is what winning means.”

Matthijs de Ligt, who appears exclusively on the cover of this month’s Icon, is set to become one of the greats of his sport: at 18 he was already captain of a legendary club like Ajax, at 21 he is consistently one of the best in the world in his role, a staple of the Juventus team after just a year in Turin. “I think the Ajax style can be summed up in two words: courage and discipline. There they expect you to learn to play the ball, without fear, that you learn to prove who you really are, as a player and as a man. And you always work for that. It’s something that stays with you, a mentality that is also helping me a lot at Juventus. Juve will only call you if you are good enough and really deserve it. We young players who have recently arrived, understand this. Obviously, we are here to grow and become like our teammates with more experience: we all want to be the next Chiellini, Bonucci or Buffon. In the end, what we do is work hard every day and push each other to improve. This is the beauty of having a young but aware group of players. We are trying to get to know each other better, even off the pitch: we want to grow together and together raise the level, both individually and as a team.”

At 25, Pierluigi Gollini, who features on the third cover of November’s Icon, has become one of the best goalkeepers in Italy: he has already won his place in the national team and with Atalanta, which is looking to qualify, for the second year in a row, for the Champions League. “We feel the responsibility of being the pride of Bergamo: there is so much warmth here, I really like the city and the spirit of the people. When we are around, we notice the great enthusiasm that surrounds us:” Gollini not afraid to be open about his passions, from rap to fashion and video games, which he often talks about on his social profiles. “I’m not afraid of being judged, indeed, it would be nice if I could be a spur for cultural change.” This awareness comes from the years he spent at Manchester United’s Youth Academy, where he went at the age of 16. “In England I found much more openness than in Italy. There the players make music, or are designers, it’s another world. My goal now is to start a record label,” continues Gollini, the first Italian footballer to have recorded a rap song, and for whom music is more than a passion, “to push some guy from out of nowhere. For now, I am working on some things, there is a project for a new song with my rapper friend,” he reveals in the interview in the issue of Icon on newsstands.

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the Interim Management Statement at 30 September 2020 presented by CEO Ernesto Mauri.

HIGHLIGHTS
The year 2020 was inevitably marked by the effects of the health emergency brought by the spread of COVID-19.
In the first half of the year, in fact, the gradual and increasingly widespread application from March of restrictive measures to social and economic activities significantly curtailed most of the activities related to the businesses where the Mondadori Group operates as a leader.

In order to address this situation, the Group has implemented a series of actions aimed at ensuring working conditions in total safety for its employees, encouraging smart working, allowing the continuation of activities and the containment of operating costs, with the aim of offsetting the operating and financial impact from the measures adopted by the authorities.
Against this backdrop, the book market has shown solid resilience and a strong recovery:

• in the Trade segment, following the gradual reopening of bookstores in May, the segment has witnessed a steady recovery, growing by 8.4%[1] in the third quarter versus the same period of 2019, reducing the loss to -3.8%[2] versus the prior year.
• as far as school textbooks are concerned, the segment managed to come out almost unharmed from the lockdown, since the period in which the restrictive measures were in force was concurrent to the promotional phase of the texts to be adopted and subsequently marketed during the summer period.

PERFORMANCE IN THIRD QUARTER 2020
In light of the outlined context, the Group’s operating and financial profile in the third quarter of the year is as follows:

• revenue amounted to € 253 million, down by 9.3% versus € 279 million in the same period of 2019 (-7.9% on a like-for-like basis), recovering strongly versus the first half of the year, despite the failed restart of the activities that gravitate around the management of museums, exhibitions and cultural assets.
  Specifically:
  – revenue in the Books Area was down by 7%, but recovering sharply from the -21% drop in first half 2020, as the recovery in the Trade segment, whose revenue grew by 13% in the third quarter, and the positive performance of the adoption campaign for school textbooks only partly offset the negative trend in museum activities;
  – revenue in the Retail Area decreased by approximately 5%, improving however from -27.5% in the first half of the year, a period impacted by the closure of bookstores for roughly two months, thanks to the recovery recorded by the book market from May.
  – revenue in the Media Area posted a 20% loss (approximately -14% on a like-for-like basis in terms of titles), with digital activities in particular on the rise, up on a like-for-like basis by approximately 7% during the quarter.

• adjusted EBITDA (including the IFRS 16 effect), amounting to € 60 million versus € 61.6 million in the prior year, was basically steady, thanks to the targeted measures to support activities and contain costs implemented by the Group across all the business areas.
  Mention should be made in this regard of the strong improvement in margins in the third quarter under review, which rose to 23.7%.
  More specifically:
  – the Books Area posted a result in the period that was € 5.8 million lower than the same quarter of the prior year, due largely to the difficulties reported by the museum business;
  – the Retail Area, on the other hand, saw its performance increase by € 0.8 million versus third quarter 2019, thanks to the cost saving plan and the rationalization of the store and product portfolio;
  – the Media Area equally recorded a significant improvement in margins (from € -1.4 million to € +2.1 million), thanks to the careful cost containment policy.

• the Group’s Net Result ended with a positive € 43 million, up by 72.2% versus € 25 million in the prior year, due partly to the write-back of Reworld Media shares held (€ 7.5 million) and the tax contribution from a tax receivable relating to the use of the “Patent box” (€ 5.5 million).

Cash flow from ordinary operations in the context of continuing operations over the last 12 months amounted to € 40.8 million versus € 36.7 million at 30 June, confirming the Group’s quick response and the ability of the business to steadily generate cash, even in a highly deteriorated context;

Net debt (no IFRS 16) stood at € -82.3 million at 30 September 2020, improving sharply versus € -110.4 million in the same period of 2019 (€ +28.1 million). Including the effects of the application of IFRS 16, net debt stands at € -170.4 million.

The gradual recovery of the business and the financial situation at the end of the third quarter, together with the Group’s medium-term outlook, provide reasons to maintain a positive attitude towards future developments, albeit in an economic scenario that is marked by the health emergency, and to be confident in the Group’s ability to continue to strengthen its capital and financial position.

CONSOLIDATED RESULTS AT 30.09.2020
In first nine months 2020, the Group’s consolidated revenue amounted to € 541.9 million, down by 17.8% versus € 658.9 million in the prior year (net of the changed scope of consolidation of the Media Area from the disposal of the five titles, the decrease would be approximately -16%, due basically to the effects of COVID-19).

Adjusted EBITDA in the period amounted to € 71 million, down by € 12.4 million versus first nine months 2019 (€ 83.4 million); this positive performance, the result of a trend in the third quarter basically in line with the prior year, reflects the significant effects of the quick response and countermeasures taken by the Group to tackle the consequences of COVID-19, which curbed the drop in revenue and reduced operating costs by approximately € 45 million.
Special mention should be made of profitability, equal to 13.1%, higher than the prior year and proof of the effectiveness of the operational efforts made by the Group.

EBITDA amounted to € 65.1 million versus € 78.4 million in the prior year, in line with the mentioned dynamics.

EBIT at 30 September 2020 amounted to € 28.9 million, down by € 21.2 million versus 30 September 2019, due mainly to the trend of the abovementioned components and to the extraordinary write-down and amortization of a number of titles for a total of € 7.8 million.

Consolidated profit before tax amounted to € 19.6 million versus € 41.5 million in first nine months 2019.

The Group’s net profit, after minority interests, came to € 18 million versus € 23.1 million in first nine months 2019 (which also included € 1.1 million from the discontinued operations of Mondadori France), a sharp upswing versus the first half of the year.

 Group employees at 30 September 2020 amounted to 1,913 units, down by approximately 9% versus 2,092 units at 30 September 2019.

BUSINESS OUTLOOK
The positive performance recorded in the third quarter by all the Group’s businesses, despite the caution inevitably brought by the scenario of uncertainty arising from the pandemic and the potential impact on the Christmas season, increases confidence on exceeding the targets set by the Group when it had approved the half-year results.

Revenue and EBITDA
With revenue confirmed to fall as expected between 16% and 18% in the year in progress versus 2019 – current estimates on adjusted EBITDA show margins in the upper part of the previously forecast range, therefore equal to 12%, the result of the following trends that are expected to mark the business units:

• Trade Books: market on the upswing and profitability holding ground;
• School Textbooks: steady market and profitability basically steady;
• Museums: the business model and the cost-cutting measures aim at a substantial operating breakeven, despite the drastic drop in revenue;
• Retail: book market and physical channels on the upswing; the deep organizational and process review and the rationalization strategy on the portfolio of stores are expected to help profitability recover;
• Media: digital advertising market on the upswing and a positive, albeit declining, profitability.

Cash Flow and Net Financial Position
Additionally, with regard to the Group’s financial debt, one can reasonably expect the positive cash generation of the business to continue over the final months of the current year which, together with a lower estimate of restructuring requirements, will allow the Group to significantly reduce the net financial position at end 2020 versus the prior year.

PERFORMANCE OF BUSINESS AREAS

• BOOKS

In the third quarter, the strong growth recorded by the Trade books market (+8.4% versus the same period of the prior year) produced a strong recovery, which reduced the overall decline to 3.8% at 30 September 2020 versus the prior year.

In the first nine months of the year, the Group placed 3 titles in the top ten bestsellers in terms of value^[3], retaining its leadership with a 24.6% market share.
Subsequently, the Group strengthened the relevance of its publishing plan with the publication in September and October of titles by a number of bestselling authors, including the new novel by Ken Follett, ranking first in the top twenty bestsellers[4], where the Group holds seven positions.

In first nine months 2020, revenue in the Books Area amounted to € 316.1 million versus € 366 million in the same period of the prior year (-13.6%).
Specifically:

• revenue in the Trade Books segment totaled € 144.1 million, down by -6.8% versus € 154.6 million in 2019, due to the effects of the COVID-19 health emergency. Mention should be made of the 13% increase in the third quarter versus the same period of 2019, confirming the post lockdown recovery, due partly to the shift in the launch of a number of new titles following the reprogramming and revision of the publishing plan.
  Revenue from e‐book and audiobook sales (approximately 8.6% of total publishing revenue) was up sharply in the lockdown period, closing the first nine months with a 29% increase versus the prior year, bucking the trend of sales of physical books.

• revenue in the Educational Books segment, amounting to € 167.4 million, was down by 18.6% versus € 205.7 million recorded in the same period of 2019, on a like-for-like basis net of the transfer of Electa’s trade books BU to Mondadori Libri S.p.A. in December 2019. The drop is attributable mainly to the museum segment, which had its operations severely impacted by the closure of sites and exhibitions owing to the measures to contain the pandemic, and by the virtual collapse of tourist travel also throughout the summer season.
  In the school textbooks segment, mostly unscathed by the effects of the pandemic, the Mondadori Group’s publishing houses achieved a market share of 22.1%, up versus the prior year, confirming the positive results of the adoption campaign in 2020.

In first nine months 2020, adjusted EBITDA of the Books Area amounted to € 67.5 million versus € 78.6 million in 2019, down due mainly to the above negative trend in revenue from the museum activities.

EBIT amounted to € 55.8 million versus € 68.5 million in nine months 2019.

• RETAIL

As mentioned, the Book market (over 80% of revenue^[5] in the Retail Area) recorded a minor fall in the first nine months (-3.8%^[6]) versus the same period of the prior year, due to the urgent measures that led to the closure of physical bookstores throughout the country from 12 March 2020 until the beginning of May.
The months following the reopening were particularly vibrant for the book market, which grew by 9.6% in the period from June to September.
Against this backdrop, Mondadori Retail’s market share stood at 11.7%.

In the first nine months, revenue in the Retail Area amounted to € 102 million versus € 126.6 million in the same period of the prior year (-19.4%), due to the abovementioned anti-COVID-19 measures.
In the third quarter, Mondadori Retail recorded an excellent performance: the decline in revenue versus the same period of the prior year amounted to -4.8% (-27.5% in first half), driven by the strong recovery in book sales, which were basically equal to the same period of 2019 (-0.6%).

In terms of sales channel performance, the third quarter saw strong results come from franchised bookstores and an improvement in the figures of directly-managed stores.
The online channel (15% of total revenue in the area) continued to grow, up by +48.8% at 30 September 2020.

Despite the steep drop in revenue, Mondadori Retail in the first nine months managed to curb the reduction in IFRS 16 adjusted EBITDA, which amounted to € -0.5 million versus € +0.8 million in the same period of 2019.
A result achieved thanks to careful cost management and a deep organizational and process revision carried out in the second half of 2019 and continued even during the harshest period of the health emergency.
With the exception of the lockdown months, Mondadori Retail showed a steady improvement in profitability throughout the year: in the months before lockdown, adjusted EBITDA was € 0.3 million higher than in the same period of 2019, while in the following months (June-September) the improvement amounted to € 1.6 million.
In the third quarter in particular, adjusted EBITDA increased by € 0.9 million versus the prior year to € 2.3 million.

IFRS 16 EBIT amounted to € -9.4 million (versus € -7.3 million at 30 September 2019).

• MEDIA

In the August surveys, the advertising market recorded an overall drop of -22%, suffering heavily in all channels from the negative effects of the health emergency: magazines lost -40.1% and digital -9.2%[7]. The digital channel alone recorded a remarkable turnaround in July and August, up by approximately 24% versus the same two-month period of 2019;

In terms of circulation, the Italian magazine market fell by -12.8%. In this context, the Mondadori Group’s market share stood at 24%[8].

At 30 September 2020, revenue in the Media Area amounted to € 144.1 million versus € 191.2 million in 2019 (-24.7%); net of the disposal in December 2019 of the five titles, the drop would be -19.1%.
In the third quarter alone, the drop in revenue was -19.9% (-14% on a like-for-like basis), with digital activities on a strong upswing, up on a like-for-like basis by approximately 7% in the quarter.

Specifically, in first nine months 2020:

• circulation revenue was down by -25%, due to both the disposal of the five titles and the COVID-19 impact (-15% net of discontinuity);
• revenue from add-on products fell by approximately -22% versus 2019, due partly to a different scheduling of planned releases (-20% net of the disposal of the five titles);
• advertising revenue fell by a total of approximately -37%; this is the form of revenue most affected by the ongoing health emergency, which has, among other things, led to the cancellation of an important event such as the Salone del Mobile and a reduction in proximity marketing solutions (AdKaora); net of the discontinuity of the scope, the fall would be -32%.
  In the third quarter alone, against the persisting decline in sales linked to print media, revenue from digital advertising sales grew by over 7%, with this component now making for 56% of total advertising revenue. 

  In terms of digital activities, mention should be made that in the period under review, the Mondadori Group retained its position as the leading multimedia publisher in Italy, on the web with an 81% reach (32.4 million unique users in August)[9] and in social media with an aggregate fan base of 34.5 million spread across 105 social profiles[10].

Adjusted EBITDA in the Media Area amounted to € 3.2 million, down by approximately € 2 million versus first nine months 2019 (€ 5.5 million).
The sharp drop in revenue was alleviated by the effective measures to contain operating costs, which curbed their negative impact on profitability.
In third quarter alone, Mondadori Media recorded adjusted EBITDA of € +1.2 million, improving significantly versus the result in the same period of 2019 (€ -1.4 million) thanks to the positive trend of digital advertising, the partial recovery of add-on sales, and the abovementioned cost containment measures.

EBIT amounted to € -9.5 million versus € -1.4 million, due mainly to the trend of the abovementioned components and to the extraordinary write-down and amortization of a number of titles for a total of € 7.8 million.

*

Additionally, the Board of Directors took note with regret of Ernesto Mauri’s decision to end his experience as CEO of the Mondadori Group by completing his term with the natural expiry of the company’s governing bodies and the approval of the financial statements scheduled in April 2021.

Mr. Mauri provided the reasons for his decision by explaining to the Board that he believes he has fulfilled the strong path of strategic re-launch and repositioning, marked by the financial recovery and solid results achieved, laying the foundations for the current Management – in total continuity – to push the Mondadori Group into a new phase of development.

In line with the strategic transformation that the Company has undergone in recent years, which has witnessed a gradual focus on its core business – Books – the Board of Directors, on the proposal of Chairman Marina Berlusconi, resolved to appoint Antonio Porro, current CEO of Mondadori Libri, as the future CEO of the Mondadori Group.
Mr. Porro’s nomination, in accordance with the outcome of the succession plan adopted by the Board of Directors, will be submitted to the Shareholders, who will submit the lists for the appointment of the new Board to the Shareholders’ Meeting next April.

*

SIGNIFICANT EVENTS AFTER FIRST NINE MONTHS 2020
On 14 October 2020, the Mondadori Group sold 8.5% of the share capital of Reworld Media. As a result of the transaction, the stake held in the French company is now 7.8%.
On 20 October 2020, the Mondadori Group completed the disposal of 25% of the share capital of Stile Italia Edizioni S.r.l. to La Verità, which already held the remaining 75%.

The documentation relating to the presentation of the results at 30 September 2020, is made available through the authorized storage mechanism 1Info (www.1info.it) and in the Investors section of the Company website www.gruppomondadori.it.

 The Interim Management Statement at 30 September 2020 approved by the Board will be available at the Company’s registered office, on the authorized storage mechanism 1Info (www.1info.it) and on www.gruppomondadori.it (Investors section) on 11 November 2020.

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

Annexes (in the pdf file):

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

[1] GFK, figures in terms of value, September 2020
[2] GFK, figures in terms of value, September 2020
[3]GFK, September 2020 (ranking in terms of cover value)
[4] GFK, Week 40-42 2020 (ranking in terms of cover value)
^[5] Product revenue excluding Club revenue
^[6] GFK, September 2020 (in terms of value)
[7] Nielsen, cumulative figures at August 2020
[8] Internal source: Press-di, figures at August 2020 (newsstands + subscriptions channel) in terms of value
[9] Comscore (August 2020)
[10] Shareablee and internal processing (September 2020)

Grazia, the leading 100% Italian fashion brand, with over 20 editions around the world, launches an extraordinary issue with Laura Pausini for the first time in the role of guest editor of a magazine.

This special edition of the weekly edited by Silvia Grilli, is dedicated to uniqueness, like many of the unique people the singer has met in her life: from Sophia Loren to the mothers who raise their children to become special people, and from the workers in music to nurses. An issue that Grazia dedicates to all its readers.

Silvia Grilli said: “This extraordinary issue of Grazia is dedicated to the many unique people that Laura Pausini has met in her life, but above all it is dedicated to all of you who are going to read it. Because each of you has within you the beauty and strength of your difference. Every one of you is unique.”

And Grazia will be on newsstands with two covers Due le covers: two extraordinary shots that immortalise Laura Pausini, a star symbol of Italian-ness known and loved all over the world, in the unique context of Rome by night, the scene for an exclusive fashion shoot.

The most acclaimed Italian outside of Italy opens up to Silvia Grilli in a long and intimate interview in which she reveals a great deal about herself, her frailties and her discipline, the acceptance of her body and her special relationship with Paolo Carta and her daughter Paola who helped her to discover her uniqueness.

And this special issue has been edited directly by Laura Pausini, with the help of the entire editorial team of Grazia: the singer converses with Sophia Loren with whom she worked on the song “Io Sì”. The song is the main theme of “The Life Ahead/ La vita davanti a sé”, the film directed by Edoardo Ponti, available on Netflix from 13 November. Loren also stars in the music video for Laura’s song, a candidate for an Oscar nomination.

Laura wanted many of the personalities that appear in the issue to be interviewed by special names. Mika, for example, with whom the singer collaborated for a benefit concert to help those affected by the explosion on 4 August in her hometown. In the pages of Grazia Mika explains how identifying with the pain of others is the first step to overcoming difficulties.

Ambra Angiolini intervenes in this issue with a unique and exclusive piece written by her for the magazine, in which she talks about the path she took that led her being accepted by her most severe judge: herself. Also interviewed in the issue are Greta Thunberg, the only girl to have started a global movement to stop global warming and the superlative Bebe Vio, who has shown how with training and perseverance you can also overcome a serious illness, live with prostheses and win an Olympic gold medal.

There are also contributions from Stefano Domenicali, the CEO of Lamborghini and the next boss of Formula One, Spotify’s Italian boss Federica Tremolada is interviews by TikToker Elisa Maino, writer Antonio Dikele Distefano, who talks about racism, and many more.

There is also space in the issue for big surveys. From a reportage on music workers left with no concerts, to nurses (female and male) in Italian hospitals and violence against women in a time of lockdowns and a focus on the microbiome, a secret resource for our health.

Fashion and beauty reflect Laura’s tastes, from oversized coats to knitwear with chains, to daring make-up. Laura reveals a number of curiosities to her many fans: the 10 records she would never part with, the accessories, clothes and design pieces she likes, a place where she spent a special holiday and her style icons.

“The offer to edit an issue of Grazia was a real surprise. It is also a bit of a challenge that I was happy to accept to try to bring a few hours of enjoyable entertainment to readers at this difficult time. Thanks Silvia, really, you allowed me to enjoy a special experience, when I thought I had experienced practically everything … you came and made me crazy with curiosity. Honestly, I can’t wait to hear the first reactions! Enjoy it, take your mind off everything and join this journey with me, who knows if you will like it? In fact, let me know, because this kind of commitment, just like when you sing or write a song, has no value if you can’t share it.” declared Laura Pausini.

Tomorrow, Thursday 5 November, at 4 pm, the singer will for the first time be the protagonist of a live Instagram event in which, together with the editor of Grazia Silvia Grilli, she will talk about the project in which she is the guest editor of a magazine.

The fashion feature and the Laura Pausini interview will also be published in the international editions of Grazia in Germany, Morocco, Bulgaria, Mexico, Latin America and Spain.

Also on this occasion, Grazia confirms its role as a multi-channel brand, able to evolve thanks to its always current look towards the future. Today the communication platform of Grazia has a total audience of 4.3 million people between readers and users (Source: Media Impact Data Fusion based on Audiweb – Audipress data in December 2019), as well as 350,000 followers on Instagram and almost 1 million fans on Facebook.