Strategy

Strategic repositioning confirmed

Major business model de-risking path.

The ability demonstrated by the Mondadori Group in 2020 to react promptly to a strongly deteriorated context, as well as the financial solidity shown by the capital position at year end, give reasons, from an operational point of view, to be optimistic all in all on the future development of the business and the results that the Group can achieve in the new year.

From a strategic point of view, the Group has all the managerial and financial resources required to continue along the path of strengthening its core businesses, of expanding into new segments in or adjacent to publishing, and of rationalizing, if possible, non-strategic activities consistently pursued in recent years, including through M&A operations.

More specifically, in 2021 Mondadori intends to continue to consolidate its leadership in the Books area – both in the school textbooks and Trade publishing segments, increasing its relevance and impact on the Group’s overall activities – and to complete its skills and solutions in the digital area.

The current financial strength gives reasons to believe that during the year the Group will be able to firmly and actively pursue any acquisition opportunities that may arise, as well as to pave the way for a possible return to a shareholder remuneration policy from 2022, applied to the net result of 2021.

Outlook 2021

The positive performance recorded in the third quarter of the year by all business areas, the continued strong cash flow generation, as well as the improved trend forecast for the books market throughout the year, allow the Group to look forward with increased confidence to its development in the coming months, and therefore to increase – based again on the current scope – the estimates previously disclosed for the current year.

Performance targets

• Consolidated revenue is expected to grow single-digit (from low single-digit).
• Adjusted EBITDA – in percentage terms – is forecast to be over 13% of consolidated revenue (compared with the previous estimate of an EBITDA margin of 12%), therefore over € 100 million.
• The net result for 2021 is confirmed on a sharp rise, propelled by the improvement in operations and by the non-recurring benefits from the tax realignment of intangible assets already recorded.

Cash Flow and Net Financial Position

Additionally, with regard to the Group’s financial debt, one can reasonably estimate a further increase in cash flow from ordinary operations, in a range between € 60 and 65 million (from the previous forecast between € 50 and 55 million), a Free Cash Flow of approximately € 50 million and, therefore, the achievement – before the impacts from the adoption of IFRS 16 – of a positive consolidated net financial position at year end equal to approximately € 35 million.

As previously anticipated, the financial strength achieved by the Group has paved the way for a possible return to a shareholder remuneration policy from 2022 (applied to the net result of 2021).