Half-Year Report at June 30, 2017 Was Approved by the Board of Directors of RCS Mediagroup S.P.A

Half-year Report

at June 30, 2017

This is English translation of the Italian Half-year report. . The Italian Half-year report is the sole authoritative version.

RCS MediaGroup S.p.A. Via A. Rizzoli, 8 – 20132 Milan Share Capital €475,134,602.10 - Company Register and Tax Code/VAT No. 12086540155, REA No. 1524326

Contents

Corporate Officers ...... 3 Brief description of the Group ...... 4 Financial highlights of RCS MediaGroup ...... 5 Report on operations ...... 6 Group performance in the first half of the year ...... 7 Information on ongoing disputes ...... 14 Other Information ...... 14 Operating segment performance ...... 15 Newspapers Italy ...... 16 Magazines Italy ...... 19 Advertising and Sport ...... 22 Unidad Editorial ...... 24 Other Corporate activities ...... 27 Related party transactions ...... 28 Significant events during the first half of the year ...... 28 Events after the reporting date ...... 28 Outlook for the current year ...... 29 Additional information required by CONSOB pursuant to Art. 114, paragraph 5 of Italian Legislative Decree no. 58/1998 of May 27, 2013 ...... 30 Condensed interim consolidated financial statements ...... 35 Consolidated financial statements ...... 36 Income statement ...... 37 Statement of comprehensive income ...... 38 Statement of financial position ...... 39 Statement of cash flows (*) ...... 40 Statement of changes in equity ...... 41 Notes to the condensed interim consolidated financial statements ...... 44 Format, content and other information on the condensed interim consolidated financial statements ...... 45 Annexes ...... 72 List of the group’s equity investments at June 30, 2017 ...... 73 Exchange rates against the euro ...... 76 Related parties ...... 78

CORPORATE OFFICERS

Honorary Chairman

Cesare Romiti

Board of Directors (*) Urbano Roberto Cairo Chairman and Chief Executive Officer Marilù Capparelli Director Carlo Cimbri Director Alessandra Dalmonte Director Diego Della Valle Director Veronica Gava Director Gaetano Micciche' Director Stefania Petruccioli Director Marco Pompignoli (**) Director Stefano Simontacchi Director Marco Tronchetti Provera Director

(*) The Board of Directors in office at the date of approval of this Report was appointed by resolution of the shareholders’ meeting on September 26, 2016. The Directors are in office for the years 2016-2017-2018 and therefore until the Shareholders’ Meeting called to approve the 2018 financial statements. (**) Director with delegated powers Powers delegated by the Board of Directors Without prejudice to internal observance of the functions and rules of corporate governance adopted, the Board of Directors has granted all the powers to the Chairman and Chief Executive Officer for the conduct of the Company's ordinary administration, as well as a set of powers for the Company’s management, with limits on the size of financial commitments and/or risks that may be assumed for certain types of transactions. The Board of Directors also assigned Director Marco Pompignoli the role of overseeing and supervising the administration, finance and management control, legal and corporate affairs, procurement and information systems functions of the RCS Group, in coordination with and in support of the Chairman of the Board of Directors and Chief Executive Officer, granting him within the scope of these functions a series of powers with limits on the financial commitments and/or risks that may be assumed for certain types of transactions. Director Marco Pompignoli was also designated by the Board of Directors as Director responsible for the internal control and risk management system.

Board of Statutory Auditors (*) Lorenzo Caprio Chairman Gabriella Chersicla Standing auditor Enrico Colombo Standing auditor Guido Croci (**) Alternate auditor Renata Maria Ricotti Alternate auditor Paola Tagliavini (**) Alternate auditor

(*) The Board of Statutory Auditors in office at the date of approval of this Report. The Statutory Auditors are in office for the years 2015-2016-2017 and therefore until the Shareholders’ Meeting called to approve the financial statements relating to the last of these years. (**) The Alternate auditors Guido Croci and Paola Tagliavini were appointed by means of resolution of the ordinary shareholders’ meeting held on April 27, 2017, replacing the Alternate auditors Barbara Negri and Ugo Rock who resigned on February 9, 2017.

Independent auditors (*)

KPMG S.p.A.

(*) In office until the Shareholders’ Meeting called to approve the 2017 financial statements. 3

BRIEF DESCRIPTION OF THE GROUP

RCS MediaGroup is one of the main European publishing groups. It is a leader in newspapers in Italy and Spain and active in magazines, television, radio and new media, one of the top operators in the advertising sales market and is also active in distribution. It is a reference in sport business through the production of high quality publishing content and the organisation of large sporting events. July 2016 saw the successful conclusion of the purchase and exchange offer (OPAS) promoted on RCS MediaGroup S.p.A. shares by Cairo Communication S.p.A., which therefore became the direct parent of RCS MediaGroup S.p.A..

In a global context characterised by a profound transformation in communication media, RCS MediaGroup is a leading player in the evolution process of the publishing sector, fortified by the founding values and principles which inspire it and the acknowledged influence which characterises its content, brands and authors.

In Italy, the RCS Group publishes Corriere della Sera and La Gazzetta dello Sport, leaders among national and sport dailies, in addition to numerous weekly and monthly magazines, including Amica, Living, Style Magazine, Dove, Oggi, Io Donna, Sportweek, Sette and Abitare. In Spain, the Group is one of the main players in the media sector with the Unidad Editorial Group, which publishes Spain's number two daily newspaper El Mundo, Marca, leader in sports news, and Expansión, leader in business news, in addition to numerous magazines, including Telva, Marca Motor, and Actualidad Económica. The Group is also the leader in Italy (but also present in Spain, Mexico and France) in the early childhood sector with an offer that includes printing, on-line, e-commerce, direct marketing and trade shows dedicated to the sector. Via RCS Sport, the RCS Group organises very important sporting events at global level, including the Giro d’Italia, the Milano-Sanremo, Il Lombardia, the Dubai Tour, the Abu Dhabi Tour, the Milan City Marathon and the Color Run, and presents itself as partner for the creation and organisation of events via RCS Live. In Spain, with Last Lap, it is a point of reference for mass events. The Group works in Spain in the football and sport on-line betting sector with the Marca Apuestas website.

In Italy, RCS operates in the radio television communication sector, through both the subsidiary Digicast S.p.A. with the satellite channels Lei, Dove and Caccia & Pesca, and via the web TV channels of Corriere della sera and La Gazzetta dello Sport. In Spain it is also present with the top Spanish national sports radio station Radio Marca, with the web TV channels of El Mundo and Marca and broadcasts through the two digital TV channels Gol Television and Discovery Max.

Digital innovation, in addition to the natural digital off-shoots of the group brands, is achieved through the creation of numerous innovative Apps.

RCS MediaGroup is a leading operator in advertising sales in Italy and in Spain, capable of offering its customers a broad and diversified communications offer through the prestige of the Group’s publications, including via more innovative means of communications such as digital editions, web, mobile, tablets, as well as a new, wide range of consumer engagement services and solutions. The RCS Pubblicità division, besides advertising sales for the Group’s publications, manages national advertising sales activities (print and web) for several important southern Italian publishers such as: Società Editrice Sud or SES for Gazzetta del Sud; Domenico Sanfilippo Editore for La Sicilia; Editrice del Sud Edisud for Gazzetta del Mezzogiorno; Giornale di Sicilia Editoriale Poligrafica for il Giornale di Sicilia. Until December 31, 2016, it managed national advertising sales activities for the Itedi Group (print and web) and, up to March 1, 2017, for the Monrif Group.

RCS MediaGroup holds investments in m-dis Distribuzione Media S.p.A. and Corporación Bermont, leaders in distribution on the newsstand channel in Italy and in the daily press in Spain, respectively.

FINANCIAL HIGHLIGHTS OF RCS MEDIAGROUP

1st half Year (€/millions) 2017 2016 2016

INCOME STATEMENT

Revenue 471.7 504.1 968.3 EBITDA (1) 69.0 33.9 89.9 OPERATING PROFIT 44.0 6.3 35.0 Profit (loss) before tax and non-controlling interests 32.2 ( 9.0) 5.0 Income taxes ( 8.2) ( 1.5) ( 9.9) Profit (loss) from continuing operations 24.0 ( 10.5) ( 4.9) Profit (loss) from assets held for sale and discontinued operations - 8.4 8.4 Profit (loss) for the period / year 24.0 ( 2.1) 3.5

Basic earnings (losses) per share: continuing operations 0.05 ( 0.02) ( 0.01) Diluted earnings (losses) per share: continuing operations 0.05 ( 0.02) ( 0.01) Basic earnings (losses) per share: assets held for sale and discontinued operations - 0.02 0.02 Diluted earnings (losses) per share: assets held for sale and discontinued operations - 0.02 0.02

Jun-30-2017 Jun-30-2016 Dec-31-2016 STATEMENT OF FINANCIAL POSITION

Net capital employed 487.5 516.2 466.5 Net financial debt (2) 363.2 422.4 366.1 Equity 124.3 93.8 100.4

Average number of employees 3,413 3,647 3,584

(1) Earnings before interest, tax, amortisation/depreciation and impairment losses. Includes the share of profits and losses of equity-accounted investees. (2) Indicator of financial structure, calculated as current and non-current loans and borrowings less cash and cash equivalents, current financial assets and non-current financial assets recognised for derivatives. Net financial debt as defined by CONSOB in its Communication DEM/6064293 dated July 28, 2006 excludes non-current financial assets. Non-current financial assets relating to derivative instruments at June 30, 2017, June 30, 2016 and December 31, 2016 amounted to zero and, therefore, RCS’s financial ratio at June 30, 2017, June 30, 2016 and December 31, 2016 matches the net financial debt as defined by the above-mentioned CONSOB Communication.

For complete disclosure purposes, the RCS Group's financial highlights for the second quarter are as follows:

2nd quarter 2nd quarter (€/millions) 2017 % 2016 % Difference Difference ABA-B% Revenue 258.3 100.0 284.3 100.0 (26.0) (9.1%) Publishing revenue 86.7 33.6 98.6 34.7 (11.9) (12.1%) Advertising revenue 119.7 46.3 138.6 48.8 (18.9) (13.6%) Other revenue 51.9 20.1 47.1 16.6 4.8 10.2% EBITDA 56.9 22.0 37.6 13.2 19.3 51.3% Operating profit 44.6 17.3 23.8 8.4 20.8 87.4% Profit attributable to owners of the parent 29.7 11.5 19.9 7.0 9.8 49.2%

As described in the 2016 annual report, the operating structure and the resulting identification of operating segments are subject to assessment, particularly in relation to the “Sport segment”, for which the setup of a specific business unit was planned at the start of 2016, combining all La Gazzetta dello Sport and Marca activities, as well as the sporting events organisation activities of RCS Sport S.p.A. and Last Lap S.L. This unification of operations has not yet been implemented. In particular, Unidad Editorial continues to operate as a single segment and single cash generating unit. Based on the fact that the definition of this operating structure and the resulting identification of operating segments are currently subject to assessment, in this Half-Year Report, the results were represented according to the areas of activity identified on the basis of the Group’s current operating structure, as better described in note 11 (dedicated to comments on segment information) of this document.

The Half-Year Report was approved by the Board of Directors on August 3, 2017.

REPORT ON OPERATIONS

DRAFTED IN ACCORDANCE WITH LAW DECREE NO. 58/1998 AND SUBSEQUENT AMENDMENTS

GROUP PERFORMANCE IN THE FIRST HALF OF THE YEAR

In the first few months of 2017, Italy recorded growth in the economic indicators, sustained by the increase in household spending and, on the supply side, the strengthening of the services sector. In this context, the growth in GDP (already revised upwards by Istat in the first quarter of 2017 with respect to the preliminary estimates) would seem to be confirmed. With respect to the previous quarter, the expected variation is +0.4%, while growth of +1.4% is forecast for 2017. (Source: Economic Bulletin no. 3/2017 – Bank of Italy). In Spain, second-quarter growth in GDP was 0.9% in 2017, up compared to the first quarter of 2017 (which recorded an increase of 0.8%). The increase is 3.1% on an annual basis, in line with the previous quarter and with the expectations (preliminary data of the national statistics institute INE).

In this context, for the first time since 2008, the RCS Group moved from a loss to a profit in the first half of 2017.

The Group's financial highlights and related comments are presented below.

Reference to the financial First half First half (€/millions) statements 2017 % 2016 % Difference Difference (3) ABA-B% Revenue 471.7 100.0 504.1 100.0 (32.4) (6.4%) Publishing revenue I 172.8 36.6 193.3 38.3 (20.5) (10.6%) Advertising revenue I 212.5 45.0 236.0 46.8 (23.5) (10.0%) Other revenue (1) I 86.4 18.3 74.8 14.8 11.6 15.5% Operating expenses II (266.8) (56.6) (326.6) (64.8) 59.8 18.3% Personnel expense III (131.7) (27.9) (140.1) (27.8) 8.4 6.0% Provisions for risks IV (2.7) (0.6) (3.8) (0.8) 1.1 28.9% Allowance for impairment V (1.9) (0.4) (1.0) (0.2) (0.9) (90.0%) Share of profits of equity-accounted investees VI 0.4 0.1 1.3 0.3 (0.9) (69.2%) EBITDA (2) 69.0 14.6 33.9 6.7 35.1 103.5% Amortisation of intangible assets VII (17.3) (3.7) (18.6) (3.7) 1.3 Depreciation of property, plant and equipment VIII (7.4) (1.6) (8.6) (1.7) 1.2 Depreciation of investment property IX (0.3) (0.1) (0.3) (0.1) 0.0 Other impairment losses on non-current assets X 0.0 0.0 (0.1) (0.0) 0.1 Operating profit 44.0 9.3 6.3 1.2 37.7 Net financial expense XI (13.0) (2.8) (16.1) (3.2) 3.1 Gains on financial assets/liabilities XII 1.2 0.3 0.8 0.2 0.4 Profit (loss) before tax 32.2 6.8 (9.0) (1.8) 41.2 Income taxes XIII (8.2) (1.7) (1.5) (0.3) (6.7) Profit (loss) from continuing operations 24.0 5.1 (10.5) (2.1) 34.5 Profit (loss) from assets held for sale and discontinued operations XIV 0.0 0.0 8.4 1.7 (8.4) Profit (loss) before non-controlling interests 24.0 5.1 (2.1) (0.4) 26.1 Profit (loss) attributable to non-controlling interests XV 0.0 0.0 0.0 0.0 0.0 Profit (loss) attributable to owners of the parent 24.0 5.1 (2.1) (0.4) 26.1

(1) Other revenue includes primarily revenue for television activities, the organisation of events and exhibitions, e-commerce activities, sales of customer lists and boxed sets and, in Spain, for betting activities. (2) Earnings before interest, tax, amortisation/depreciation and impairment losses. Includes the share of profits and losses of equity-accounted investees. (3) These notes relate to the corresponding headings in the condensed income statement.

The change in revenue with respect to the first half of 2016 is presented below.

M€ Revenue Advertising Publis hing/Other ‐32.4 ‐1.2 Advertising 504.1 ‐2.4 Publishing/Other

0,90.9 (18.8) 236.0 (3.6) 471.7

(12.5) 1,61.6 ‐4.2 Advertising +3.1 Advertising ‐ our products ‐5.9 Publishing/Other ‐ ‐16.5 Third‐party advertising 212.5 8.7 Add‐ons +14.3 Publishing/Other ‐7.9 Advertising 268.1 ‐4.6 Publishing/Other 259.2

June 2016 Newspapers Magazines Advertising Unidad Other Corporate June 2017 Italy Italy and Sport Editorial activities and eliminations

Revenue for the first half of 2017 amounted to €471.7 million, marking a decrease of €32.4 million over the first half of 2016. On a like-for-like basis, as detailed below, the variation would amount to -€9.9 million, attributable to the decrease of €10 million in publishing revenue, decrease of €6.1 million in advertising revenue and the increase of €6.2 million in other revenue.

The trend in publishing revenue on a like-for-like basis in the first half of 2017 recorded a decrease of €10 million, as commented hereunder:

 The fall in publishing revenue of Newspapers Italy was €11.1 million. Excluding the effects of the different add-on product publishing plan from the comparison (characterised by a different offer mix), the decrease comes to €3.9 million, and is due to the variation in circulation recorded by Corriere della Sera and La Gazzetta dello Sport publications. The two newspapers retained their circulation leadership in their respective market segments (Source: ADS January - May), with circulation, respectively, of an average of 315 thousand copies for Corriere della Sera and an average of 177 thousand copies for La Gazzetta dello Sport including digital copies (Source: ADS January - May). The performance of the newsstand channel (channels required by law) in May (Source: ADS January - May) shows a decrease of 3.8% for Corriere della Sera compared to -7% of the reference market and 1.5% of La Gazzetta dello Sport with respect to -1.6% of the reference market.  The fall in the publishing revenue of Unidad Editorial came to -€8.6 million, compared to the figure in the first half of 2016. Excluding the effects generated by the gradual adoption of a different newspapers promotional policy, the decrease would be €6.1 million, attributable to the drop in circulation. The publications Marca and Expansión retained their circulation leadership in their respective market segments, with average daily circulation (including digital copies) of around 137 thousand and 36 thousand copies respectively (Source: OJD) while the publication El Mundo stayed in second place with average daily circulation, including digital copies, of around 121 thousand copies (Source: OJD).  The publishing revenue of Magazines Italy recorded a slight decrease of -€0.6 million compared to the first half of 2016, essentially attributable to the lack of homogeneity between the types of add-on products offered. Circulation recorded a positive performance, in particular with Oggi which improved its sales in the newsstand channel, registering higher publishing revenue of €0.4 million, essentially offsetting the modest decreases in the Women’s Area and the Men's and Lifestyle Area.

Advertising revenue for the first half of 2017 came to €212.5 million, compared to €236 million in the first half of 2016 (including advertising sales on behalf of third party publishers). The decrease compared to the first half of 2016, net of the effects due to the extraordinary events between the two periods being compared, would be €6.1 million. The main extraordinary events concern both the termination, in 2017, of the advertising contracts with third party publishers (revenues of €1.2 million in the first half of 2017 compared to €17.2 million in the first half of 2016), and the presence, in 2016, of the European football championships, while in 2017 in the RCS Sport area, the Abu Dhabi Tour was held early in the first half of 2017, which had been organised in the second part of 2016. The decrease is therefore attributable to the advertising sales of the Group publications, 8

only partly offset by the growth in the advertising revenue connected with the sporting events organised by the area headed up by RCS Sport.

Other revenue, amounting to €86.4 million, recorded a net increase of €6.2 million on a like-for-like basis compared to the first half of 2016. The variation is due to the positive effect of revenue from the sporting events of the RCS Sport area, and in particular, the television rights relating to Giro d’Italia. The other revenue of Unidad Editorial improved by +€4 million, due to the continuation of television activities and betting through the Marca Apuestas platform.

The change in EBITDA with respect to June 30, 2016 is presented below.

EBITDA M€ +35.1

4.74,7 69.069,0 6.46,4 12,112.1

4.94,9 7.07,0 33,933.9

June 2016 Newspapers Magazines Advertising Unidad Other Corporate June 2017 Italy Italy and Sport Editorial activities and eliminations

EBITDA was positive at €69 million, an improvement of €35.1 million with respect to the first half of 2016 (+€19.3 million in the second quarter of 2017 alone, compared to the second quarter of 2016). In the first half of 2017, no non-recurring net expense or income was recorded (expense totalled €6.3 million in the first half of 2016).

Revenue and EBITDA by operating segment for the first half of 2017 and for the first half of 2016 are summarised below, illustrated in the “Operating segment performance” section, to which reference should be made for more details.

(€/millions) First half 2017 First half 2016

OPERATING OPERATING % of % of % of % of Revenue EBITDA PROFIT Revenue EBITDA PROFIT revenue revenue revenue revenue (LOSS) (LOSS)

Newspapers Italy 188.2 34.5 18.3% 27.4 14.6% 207.0 27.5 13.3% 20.7 10.0% Magazines Italy 45.1 5.8 12.9% 5.2 11.5% 48.7 0.9 1.8% 0.1 0.2% Advertising and Sport 182.3 22.5 12.3% 22.5 12.3% 181.4 10.4 5.7% 10.4 5.7% Unidad Editorial 147.2 16.4 11.1% 7.2 4.9% 159.7 10.0 6.3% 0.8 0.5% Other Corporate activities 12.4 (10.2) (82.3)% (18.4) n.a 19.1 (14.7) (77.0)% (25.5) n.a Other and eliminations (103.5) 0.0 (0.0)% 0.1 n.a (111.8) (0.2) 0.2% (0.2) n.a Consolidated 471.7 69.0 14.6% 44.0 9.3% 504.1 33.9 6.7% 6.3 1.2%

The improvement in EBITDA, to which all Group business areas contributed, is due to the positive results deriving, on the one hand, from investment in publishing contents, the constant enhancement of the offering and development of the portfolio of sporting events and, on the other, the focus on costs in general and constant commitment to efficiency which has made it possible to obtain benefits amounting to €32 million, of which €19.2 million in Italy and €12.8 million in Spain. In fact, during the first half of 2017, the Group optimised the costs structure further, continuing, in both Italy and Spain, to implement the activities already commenced in 2016 and seeking out further opportunities to reduce and rationalise costs, based on an approach of gradual improvement of supply conditions and of the business and publishing processes, as well as striving to achieve greater simplification of operations.

The trends in EBITDA of each operating segment are reported below, compared to the corresponding period of the previous year:

 EBITDA in the Advertising and Sport area came to €22.5 million, improving by a total of €12.1 million due to the growth in activities relating to RCS Sport. The increase in the RCS Sport area is mainly due to the rise in revenues, commented on above, combined with careful cost management.  EBITDA in the Newspapers Italy area amounted to €34.5 million, growth of €7 million. This result was achieved due to the initiatives targeted at constantly enriching the publishing offer, combined with the tireless commitment to achieving efficiency.  EBITDA of the Unidad Editorial area, amounting to €16.4 million, recorded an increase of €6.4 million. Continuous cost reduction and efficiency recovery initiatives (including the restructuring plan signed with workers’ representatives in 2016) and the growth in digital revenue more than offset the drop in circulation.  EBITDA of the Magazines Italy area totalled €5.8 million, marking an improvement of €4.9 million. This increase derives primarily from the significant commitment to reducing costs, accompanied by the excellent results in terms of circulation of the publications.  The improvement of €4.5 million compared to the first half of 2016 recorded by EBITDA from Other Corporate activities is essentially attributable to the fact that, in the first half of 2016, net non-recurring expenses of roughly €4.4 million were recognised. Excluding this effect, EBITDA remained essentially stable, despite the presence of cost and savings efficiencies also realised in this area, for the transfer of these benefits to the business areas through lower charge-backs, with a subsequent drop in revenues from Other Corporate activities (€6.7 million).

Personnel expense decreased by €8.4 million. The variation is prevalently attributable to Unidad Editorial, whose personnel expense fell by €5.2 million. Also personnel expense of Other Corporate activities recorded a decrease compared to the first half of 2016 (-€2.9 million). In particular, the average headcount of the Group in the first half of this year saw an overall decrease of 234 compared to the same figure to corresponding period of 2016, of which an average of 147 relating to Unidad Editorial.

The operating profit amounted to €44 million, compared with an operating profit of €6.3 million in the first half of 2016. The growth of €37.7 million not only reflects the improvement in EBITDA described above, but was also determined by lower amortisation of €2.5 million. As part of the company asset evaluation process, the analyses conducted did not highlight any signs of impairment. Therefore, in the first half of 2017, no impairment losses were recorded (€0.1 million in the first half of 2016).

The decrease in amortisation/depreciation is due, for €1.3 million, to intangible assets and, for €1.2 million to property, plant and equipment. The reduction in the amortisation of intangible assets is due to the end of the useful lives of various software programs, including Microsoft Office licences, web infrastructures, Corriere and Gazzetta Store e-commerce, attributable to the Other Corporate activities area, and was only partly offset by higher amortisation relating to the purchases of new TV licences and rights on executive productions carried out by Newspapers Italy. The lower depreciation of property, plant and equipment is attributable, for €1 million, to Other Corporate activities, and refers to the end of the useful life of improvements on buildings at the Via Rizzoli site and the Group’s IT systems.

Net financial expense and net gains on financial assets, amounted to €11.8 million, down by a total of €3.5 million. This reduction is essentially due to lower interest accrued on the net financial debt, as a result of the reduction in average exposure, and to a lesser extent, the net effect of the incidence of hedging derivatives, in addition to the positive effect of discounting expenses.

The profit from assets held for sale and discontinued operations was zero, compared to a positive €8.4 million in the first half of 2016 (due to the realisation of the translation reserve of the Books group effected at the same time as the sale).

Income taxes totalled €8.2 million at June 30, 2017 compared to taxes of €1.5 million at June 30, 2016 and refer to IRAP (€2.3 million), the use of deferred taxes (€6.3 million) and the allocation of current taxes for the period (€0.4 million). These expenses were partly offset by the positive effect of the release of the provision for deferred taxes of Unidad Editorial for €0.8 million. At June 30, 2016, taxes referred almost exclusively to IRAP for the period. The variation reflects the improvement in the results of Group companies.

Profit for the first half of 2017 amounted to €24 million, compared to a loss of €2.1 million for the first half of 2016, marking an improvement of €26.1 million. The change reflects the aspects commented on above.

Evolution of workforce and breakdown of employees by geographic segment

The exact headcount of the RCS Group at June 30, 2017 (3,361, of which 140 on temporary contracts) was down 235 on June 30, 2016. This decrease was caused by the reduction in both personnel on permanent contracts (down 199 units), and personnel on temporary contracts (down 36 units). The exact headcount at June 30, 2017 includes 874 people in Italy working under solidarity arrangements, with a reduction in working hours up to a maximum of 20% (143 journalists for the publication La Gazzetta dello Sport, 731 other non-editorial staff) and 134 journalists placed in the extraordinary redundancy fund (CIGS) up to a maximum of 20% in the Magazines Italy segment.

The exact headcount broken down by geographical segment is shown below.

Italy Spain Other countries Total Jun-30 Jun-30 Jun-30 Jun-30 2017 2016 2017 2016 2017 2016 2017 2016 Executives, middle managers and white collars 1,014 1,102 735 795 57 64 1,806 1,961 Publication directors and journalists 777 789 539 612 2 0 1,318 1,401 Blue collars 196 193 41 41 00237 234

Consolidated total 1,987 2,084 1,315 1,448 59 64 3,361 3,596

***

The average number of RCS Group employees in the first half of 2017 was 3,413, down by 234 compared to the figure in the same period of 2016 (3,647). The trend in the workforce in Italy was characterised, on the one hand, by the restructuring and efficiency plans, and on the other, stabilisations and turnover management initiatives. The reduction in Unidad Editorial personnel (down by an average of 147) was particularly significant, mainly as a result of the progress of the restructuring plan signed in 2016 with workers’ representatives, regulating the exit of 160 people in the 2016-2017 period.

Average employees working in the Group’s foreign operations accounted for approximately 41% of the Group’s average total in the first half of 2017.

The breakdown of the average number of employees by geographical segment is shown below.

Italy Spain Other countries Total Jan-Jun Jan-Jun Jan-Jun Jan-Jun 2017 2016 2017 2016 2017 2016 2017 2016 Executives, middle managers and white collars 1,055 1,118 739 808 57 63 1,851 1,989 Publication directors and journalists 779 797 547 624 2 1,328 1,421 Blue collars 193 196 41 41 234 237

Consolidated total 2,027 2,111 1,327 1,473 59 63 3,413 3,647

Reclassified statement of financial position

Reference to the financial Jun-30-2017 % Dec-31-2016 % statements (2) (€/millions) Intangible assets XVI 384.8 78.9 394.6 84.6 Property, plant and equipment XVII 80.0 16.4 87.0 18.6 Investment property XVIII 21.0 4.3 21.3 4.6 Non-current financial assets XIX 184.8 37.9 192.3 41.2 Non-current assets 670.6 137.6 695.2 149.0 Inventories XX 16.7 3.4 17.4 3.7 Trade receivables XXI 256.4 52.6 256.3 54.9 Trade payables XXII (263.6) (54.1) (292.9) (62.8) Other assets/liabilities XXIII (46.6) (9.6) (54.4) (11.7) Net working capital (37.1) (7.6) (73.6) (15.8) Provisions for risks and charges XXIV (50.7) (10.4) (58.5) (12.5) Deferred tax liabilities XXV (55.7) (11.4) (56.4) (12.1) Employee benefits XXVI (39.6) (8.1) (40.2) (8.6) Net capital employed 487.5 100.0 466.5 100.0 Equ i t y XXVIII 124.3 25.5 100.4 21.5 Non-current loans and borrowings XXIX 282.8 58.0 275.1 59.0 Current loans and borrowings XXX 91.0 18.7 105.1 22.5 Non-current financial liabilities recognised for derivatives XXXI -- 5.11.1 Non-current financial assets recognised for derivatives XXXII -- -- Cash and cash equivalents and current loan assets XXXIII (10.6) (2.2) (19.2) (4.1) Net financial debt (1) 363.2 74.5 366.1 78.5 Total sources of financing 487.5 100.0 466.5 100.0

(1) Indicator of financial structure, calculated as current and non-current loans and borrowings less cash and cash equivalents, current financial assets and non-current financial assets recognised for derivatives. Net financial debt as defined by CONSOB in its Communication DEM/6064293 dated July 28, 2006 excludes non-current financial assets. Non-current financial assets relating to derivative instruments at June 30, 2017 and December 31, 2016 amounted to zero and, therefore, RCS’s financial ratio at June 30, 2017 and at December 31, 2016 matches the net financial debt as defined by the above-mentioned CONSOB Communication. (2) These references relate to the corresponding captions in the statement of financial position.

Net capital employed amounted to €487.5 million, marking a net increase of €21 million compared to December 31, 2016, originating from the growth in net working capital (up €36.5 million) and the decrease in provisions (-€9.1 million), partially offset by the drop of €24.6 million in non-current assets.

Net working capital went from -€73.6 million at December 31, 2016 to -€37.1 million at June 30, 2017, primarily due to the decrease in trade payables of €29.3 million and other assets and liabilities (-€7.8 million). The decrease in non-current assets (-€24.6 million) is attributable to the drop in intangible assets and property, plant and equipment (-€16.8 million) due to amortisation/depreciation (€24.7 million), partially offset by investments made in the period (+€7.9 million). Lower non-current financial assets (-€7.5 million) contributed to the decrease in non-current assets, mainly due to the fall in deferred tax assets (-€6 million), as did equity-

accounted investments (-€1.3 million), as a result of the distribution of dividends (-€1.7 million), partially offset by the positive results in the half (+€0.4 million). Please refer to the specific notes to these condensed interim consolidated financial statements for comments on the trend in the main items of net capital employed.

Equity disclosed an increase with respect to December 31, 2016 amounting to €23.9 million, due mainly to the net result for the period, as well as the positive change in the hedging reserve. This increase was partially offset by the decrease in equity attributable to non-controlling interests, as a result of the exit of shareholders from the investee Editoriale Veneto S.r.l.. Total net financial debt amounted to €363.2 million, marking a decrease of €2.9 million since December 31, 2016. Positive cash flows from ordinary operations (of €23.8 million) more than offset outlays for technical investments made in the half (€7.7 million), as well as the amount paid for non-recurring expense recognised in previous years (€11.9 million)

The above-mentioned changes in total net financial debt are specified in detail below:

M€ 2.9

+21 vs Jun 30, 16

+11 vs +8 vs +2 vs Jun 30, 16 Jun 30, 16 Jun 30, 16

23.8 (363.2) (366.1) (1,3)(1.3)

(11.9)(11,9)

(7.7)(7,7) Net financial debt Net financial debt Dec‐31‐2016 Disposals and Other (non‐ Ordinary acquisitions recurring CAPEX operations Jun‐30‐2017 expense)

Source: Management reporting analysing the main changes in total net financial debt. The analysis of flows of cash and cash equivalents in accordance with the provisions of IAS 7 is provided and commented on in the Consolidated Financial Statements.

INFORMATION ON ONGOING DISPUTES

RCS Sport Events

With reference to the aforementioned events, please refer to the section “Information on ongoing disputes” in the Annual Financial Reports at December 31, 2015 and at December 31, 2016. Updates on the various events are reported below:

(i) As regards the proceedings joined as civil parties seeking damages from certain defendants, the case has currently been adjourned to the hearing of October 27, 2017. At the hearings on June 9 and 16, 2017, the Chief Judge of the panel of judjes declared that he has been assigned to another appointment and, as a result of the non-consent of the defence lawyers of the defendants to continuing the preliminary activities carried out up until now, the court hearings must be commenced ex novo due to the change of composition of the panel.

(ii) As regards the writ of summons served on August 1, 2014, in which RCS Sport S.p.A. lodged a liability action against the former Chief Operating Officer and the former CEO at the hearing on June 28, 2017, a joint request for a postponement was submitted and the case was adjourned to the hearing of September 26, 2017.

(iii) As regards the objection to the dismissals imposed (appeal rejected by the Court of Milan), the former CEO and the former Chief Operating Officer both filed an appeal. The next hearing is set for October 23, 2017 for the former CEO and November 15, 2017 for the former Chief Operating Officer.

(iv) The following are pending before the Court of Milan against the Bank at which the current account was held: (a) the compensatory action brought by the Consorzio Milano Marathon (b) the compensatory actions brought by Associazione sportiva dilettantistica Milano City Marathon and other associations. The lawsuits were joined and are currently in the preliminary investigation phase. The next hearing is scheduled for September 21, 2017 for the examination of the graphology report prepared by the expert witness.

OTHER INFORMATION

Effective as of August 7, 2012, the Company decided to take advantage of the rights set forth in Art. 70, paragraph 8 and Art. 71, paragraph 1-bis of the Regulation pursuant to CONSOB Resolution no. 11971/1999 as amended.

OPERATING SEGMENT PERFORMANCE

NEWSPAPERS ITALY

Segment profile

The Newspapers Italy segment is primarily dedicated to the editing, production and marketing of publishing products relating to the titles Corriere della Sera (Corriere publications) and La Gazzetta dello Sport (Gazzetta dello Sport publications). It also includes television activities for satellite channels and digital development activities.

In particular, Corriere della Sera publications include the national newspaper, the leading national news and information daily, in addition to a structured, integrated platform of paper and digital information media, including a network of local newspapers, the weekly Sette, special inserts and general interest and specialised supplements, as well as the entire digital offer consisting of the website with corriere.it, the digital edition, mobile and apps.

La Gazzetta dello Sport publications include the national newspaper, the leading Italian sports information publication, the weekly Sportweek, special inserts and specialised supplements, the website gazzetta.it, the infotainment GazzaNet website, featuring the latest news and details about the main teams and athletes. The Newspapers Italy segment also includes local editions of the two newspapers.

Television activities are carried out in Italy, through the company Digicast, which operates in the satellite television broadcasting segment, offering five channels on SKY: Lei (channel 127), Dove (channel 412), in addition to the optional channels Caccia (channel 235), Pesca (channel 236) and Lei+1 (channel 129).

The Newspapers Italy segment also includes the activities to develop newspapers on digital media as well as classified activities including Trovocasa and, through the company Trovolavoro S.r.l., the market segment dedicated to the search for qualified personnel.

As regards the part of the distribution of Newspapers, m-dis Distribuzione Media S.p.A., an equity-accounted investee, which handles the distribution of publishing products of the Newspapers and Magazines Italy segment, contributed to the segment’s results.

Financial highlights

(€/millions) First half 2017 First half 2016 Change % change Publishing revenue 106.1 117.2 (11.1) (9.5) Advertising revenue 73.9 78.4 (4.5) (5.7) Other revenue 8.2 11.4 (3.2) (28.1) Total revenue from sales and services (1) (2) 188.2 207.0 (18.8) (9.1) EBITDA 34.5 27.5 7.0 25.5

(1) of which add-on product sales: 25.9 34.6 (2) Revenue from add-ons at June 30, 2017 stood at €25.9 million, €25.2 million of which was attributable to publishing revenue, €0.6 million to other revenue and €0.1 million to advertising revenue (at June 30, 2016 the total was €34.6 million, of which €32.5 million related to publishing revenue, €1.7 million related to other revenue and €0.4 million to advertising revenue).

Market trend

At the end of June 2017, the advertising market decreased by 3% compared to the same period of the previous year. In the print media segment, there was an overall downturn of 9.3%: newspapers dropped by 10.8%, with a negative trend for national business advertising (-13.5% compared to the same period in 2016) and magazines

were down by 7% (Source: Nielsen). The on-line segment was also down (-1.7%) and the advertising market for general television programmes was down -1.9% compared to the same period of 2016 (Source: Nielsen).

In terms of circulation, in Italy the unfavourable trend in the paper products market also continued in the first five months of 2017. Specifically, the distribution of paper copies of general interest newspapers in the first five months of the year was down by 15.4% (Source: ADS figures, January-May 2017). Also including digital copies, the market was down 14.6%. In the first five months of 2017, sports newspapers showed a decrease of 6.6% (Source: ADS figures, January-May 2017), compared to the same period of 2016. Also including digital copies, the decrease in the market remains constant at 6.6% (Source: ADS figures, January-May 2017).

Segment results

In the period just ended, initiatives continued targeted at increasing the value of the publications in the Newspapers Italy sector and the networks to which they belong.

The various initiatives targeted at enhancing the quality of information and independence of the publication include a range of activities and projects launched in the last few months: the entry of a top journalist and author such as Massimo Gramellini who, from February 14 offers “Il Caffè” of the day on the first page and on corriere.it, the assignment of the letters page and the relationship with readers to another leading light like Aldo Cazzullo, the launch of the new weekly economic supplement L’Economia, the relaunch of Sette entrusted to another leading name, Beppe Severgnini, and constant monitoring and development of digital activities with the launch (first Italian publisher to do so) of all-encompassing videos, a new way of transmitting news or an event which enables viewers to fully immerse themselves in the reporting location.

Numerous initiatives were also implemented for the publication La Gazzetta dello Sport, including the “geolocation” project, with an entire daily page in the football section dedicated to local football clubs, with a mention on the first page, and the Grande Gazzetta (10 monthly editions starting from February, which has ample space for stylishly covering events/championships of huge national and international interest, including the special edition on Formula1 and MotoGp, on the Milan derby, on the Champions League final and on the Football transfer market). In addition, to celebrate the 100th edition of the Giro d’Italia, the “Sulle terre del Giro” initiative was implemented, a customised local special edition. The sports daily also included a special free 20-page insert, with information on all the past editions of the most popular cycling race. Excluding the figure from even-year events (European Football Championships 2016), circulation is essentially in line with the previous year, with an especially positive result in the month of May (+5.8%).

Consolidated revenue of the Newspapers Italy segment amounted to €188.2 million in the first half of 2017, down by €18.8 million (a decrease of -9.1%) compared to the same period of 2016. The decrease was generated, for €11.1 million, by publishing revenue, for €4.5 million by advertising revenue and, for €3.2 million, by other revenue. Digital revenue in the area amounted to €26.5 million, accounting for 14.1% of total segment revenue.

Publishing revenue of the Newspapers Italy segment amounted to €106.1 million, down by 9.5% compared to the same period in 2016. The decrease is due primarily (€7.2 million) to the different publishing plan for add- on products, characterised by a product offering that was distributed differently in 2017. This was in addition to the decrease in publishing revenue of both Corriere della Sera publications (-€1.6 million compared to the first half of 2016), with growth in digital revenue, which partly offset the drop in circulation of paper copies, and the decrease in La Gazzetta dello Sport publications (-€1.6 million concentrated on paper copies).

Both newspapers retained their circulation leadership in their respective market segments in May 2017 (Source: ADS figures January-May 2017).

In the first half of 2017, Corriere della Sera recorded an average of 338 thousand copies distributed, including digital copies (Internal Source). Total circulation of La Gazzetta dello Sport in the first half of 2017 came to 184 thousand copies on average, including digital copies (Internal Source). As regards the comparison with the market, the newsstand channel (channels required by law) recorded a better performance than the reference market, especially in relation to Corriere della Sera (which recorded a drop of -3.8%, compared to -7% of the market). (Source: ADS January- May).

In relation to digital publishing revenue, the growth was determined by higher subscriptions to Corriere della Sera’s Membership offer, which reached 36 thousand, an increase of 13% over the same period in the previous year. In the first half of 2017, the average monthly unique browsers for the corriere.it site reached 46.5 million (+17.3% compared to same period in 2016), and the average unique browsers on weekdays totalled 3.1 million, up by 18.1% compared to the first half of 2016. (Source: Adobe Analitics). The mobile version of the website Corriere Mobile recorded 23.7 million average monthly unique browsers, marking 38.5% growth compared to the figure recorded in the first half of 2016 (Source: Adobe Analitics). The site gazzetta.it recorded 28.3 million average monthly unique browsers in the first half of 2017 (up 12.7% compared to the same period in 2016). The average unique browsers on weekdays totalled 2.2 million, up by 9.9% compared to the first half of 2016 (Source: Adobe Analitics). Gazzetta Mobile reached 13.5 million unique browsers, up by 16.5% with respect to 2016 (Source: Adobe Analitics).

Advertising revenue of the Newspapers Italy segment amounted to €73.9 million, down by 5.7% compared to 2016. Deducting the effect on advertising sales deriving from sporting events in the first half of 2016, the decrease would come to €2.3 million, falling to -2.9%. Total advertising sales for on-line media reached roughly 25% of total advertising revenue for the segment, compared to 23.6% in the same period of the previous year. The advertising revenue of Corriere della Sera publications (including supplements and on-line) decreased by 2.2% compared to the same period in 2016, with print down 3.6% compared to -9.3% recorded by the market and digital up 3.9% with respect to a decrease of 1.7% registered by the market (market data, source Nielsen January-June 2017). Advertising revenue from La Gazzetta dello Sport publications (including supplements and on-line) recorded a drop of 13.9% compared to the same period in 2016, with print down 15.5% and the digital segment down 7%. Deducting the effect of the sporting events of the first half of 2016, the decrease would be 4.1%, with print down 6.7% and the digital segment up by 6.1%.

Other revenue amounted to €8.2 million, down by €3.2 million due to less revenue from add-on product sales (-€1.1 million) and partly due to the decrease in other revenue with no effects on the margin. It includes other revenue from the television activities of the subsidiary Digicast, which rose by €0.2 million.

***

EBITDA in June 2017 amounted to €34.5 million, up by €7 million compared to €27.5 million in the same period of 2016. The initiatives targeted at constantly expanding and enriching the publishing offer, combined with the tireless commitment to efficiency, made it possible to achieve this result. In fact, total operating costs, including personnel expense and excluding non-recurring expense in 2016, were down almost 14% from those of the previous year. In the first half of 2017, no non-recurring expense was recorded (net non-recurring expense of €1.3 million in the first half of 2016).

MAGAZINES ITALY

Segment profile

The Magazines business area is dedicated to the editing, production and marketing of a structured offer of publishing products. The Magazines segment mainly includes seven Italian magazines, including weeklies and monthlies, and concern the following areas: Women’s (IO Donna and Amica), Home Furnishings and Interior Design (Living and Abitare), Family (Oggi publications) and Men’s & Lifestyle (Style Magazine, Dove). As regards the multimedia domain, magazines are present with the websites Living.corriere.it, Iodonna.it, Amica.it, Oggi.it, Doveviaggi.corriere.it, Style.corriere.it, Doveclub.it and Abitare.it. In addition, June 2016 saw the launch of the new cooking monthly Sano & Leggero, part of the Oggi publications while, also in Oggi publications, Oggi Cucino went from being published every month to being published every fifteen days in December 2016. Lastly, it should be noted that, in June 2017, the publication Oggi Enigmistica Settimanale was reclaimed (previously licenced to third parties), relaunched at the end of June.

The area also includes the activities of Hotelyo SA, a company operating under the Dove Club name in the on- line travel segment in ‘flash sales’, catalogue and ‘tailor made’ mode.

In addition to these are the Childhood Magazines specialised in the early childhood segment, including the publications Insieme and Io e il mio Bambino, the controlled distribution of boxed sets containing assorted products and test samples for mothers, the organisation of events and fairs (Bimbinfiera), the offer of digital products (quimamme.it website and publication websites) and e-commerce and direct marketing functions. Thanks to its business model, the Sfera Group is the market leader in Italy and Spain and is also present Mexico (with business models similar to the Italian one), in France and in Portugal, with an exclusively digital offer. Note that direct marketing activities were previously included in the Other Corporate activities area, therefore the comparison period was reviewed accordingly.

As regards the part of distribution of magazines, m-dis Distribuzione Media S.p.A., an equity-accounted investee, which handles the distribution of publishing products, contributed to the segment’s results.

Financial highlights

(€/millions) First half 2017 First half 2016 Change % change Publishing revenue 13.4 14.0 (0.6) (4.3) Advertising revenue 23.7 24.9 (1.2) (4.8) Other revenue 8.0 9.8 (1.8) (18.4) Total revenue from sales and services (1) (2) 45.1 48.7 (3.6) (7.4) EBITDA 5.8 0.9 4.9 >100

(1) of which add-on product sales: 1.6 2.2 (2) Revenue from add-ons at June 30, 2017 stood at €1.6 million, due entirely to publishing revenue (at June 30, 2016 the total was €2.2 million, of which €2.1 million related to publishing revenue and €0.1 million to other revenue).

Market trend

In Italy, the advertising market for magazines in print media recorded a decrease of 7% in the first six months of 2017, compared to the same period of 2016, in the presence of an advertising market down 3% on the whole. Internet recorded a drop of 1.7% in investments. (Source: Nielsen).

In relation to the circulation market of publications stated in ADS in the first five months of 2017, the magazines market generally fell by around 12% compared to the same period in 2016: monthlies decreased by 17% and weeklies by 8% (Internal Source based on ADS data).

Segment results

Revenue of the Magazines segment amounted to €45.1 million at June 30, 2017, down by €3.6 million (-7.4%) compared to the same period of 2016.

Publishing revenue fell by €0.6 million compared to the first half of 2016 (-4.3%), due to less revenue from add-on products, determined by the different type of products offered, but which generated increased EBITDA compared to the first half of 2016.

The weekly Oggi recorded an excellent performance, which improved the circulation at the newsstand channel, both when sold individually and bundled with other publications of the Family segment, a brand extension of the Oggi brand. The publication recorded a 16% rise in newsstand circulation in the first half of 2016 compared to the same period in the previous year, presenting higher publishing revenue of €0.4 million.

The relaunch of Oggi Enigmistica Settimanale was successful (from June 27), which posted excellent results in newsstands with its first issue, up from 13 thousand to 80 thousand copies, of which as many as 60 thousand sold at newsstands individually and 20 thousand bundled with Oggi.

The publishing revenue of the Home Furnishings and Interior Design area was essentially stable, while a slight decrease was registered by both the Women’s area (-€0.2 million) and the Men's and Lifestyle segment (-€0.2 million), attributable primarily to the publication Dove, also due to the non-release, with respect to the first half of the previous year, of the special issue Dove Estate.

The publishing revenue of Childhood Magazines was stable with respect to the same period of the previous year, thanks to the strong performance of products in the newsstand channel, despite there being one less publication (Dolce Attesa). May saw the newsstand release of the new Insieme, the historic monthly for families, which has had a complete makeover. All RCS magazines recorded a better circulation trend with respect to that of the market (Data in May, Source: ADS).

In relation to digital performance indicators, the IODonna.it site performed extremely well, with 2.1 million unique browsers with respect to 1.7 million in the same period in 2016 (+21%), as did the Amica.it site, which recorded a 45% increase in the number of unique browsers, reaching 240 thousand (Source: Adobe SiteCatalist).

Advertising revenue dropped by around -4.8% (down €1.2 million) compared to the same period of the previous year. This decrease is attributable, for €0.8 million, to lower advertising sales of Childhood Magazines in Italy, both print copies (-€0.4 million) and on-line (-€0.2 million), and in Mexico (-€0.2 million). Advertising sales were essentially stable in Spain.

The advertising revenue of other magazines was down by roughly €0.4 million compared to the same period of last year, with reference in particular to the publications IoDonna, Amica and Oggi. The publications Living, Style and Dove recorded improvement. The advertising revenue of websites was essentially stable.

On the whole, the Magazines area recorded a better performance than the market (-3.1% compared to -7% of the market). Figures for January-June 2017, Source: Nielsen).

Other revenue amounted to €8 million, down by €1.8 million (-18.4%) compared to the same period of 2016.

This decrease is attributable, for €1.6 million, to Childhood Magazines, due to the change of model achieved through the outsourcing of some activities (including e-commerce in Italy), the lack of a trade fair event (with no impacts on the margin), and lower revenue from direct marketing and boxed set distribution activities.

The other revenue of the Magazines segment fell slightly (-€0.2 million compared to the same period in 2016).

* * *

EBITDA for the first half of 2017 amounted to €5.8 million, up by €4.9 million compared to the same period of 2016. The improvement in EBITDA is attributable, for €3.8 million, to the Magazines segment, due not only to the excellent performance of Oggi Publications and their add-on products, but also the strong commitment to cutting costs, as detailed previously.

Childhood Magazines also recorded improvement in EBITDA of €1.1 million, mainly due to the efficiency drives (including the closure of lower profit margin activities) and reduction of costs.

ADVERTISING AND SPORT

Segment profile

Includes the RCS Pubblicità (Italy) division, the advertising concessionaire of the RCS Group and RCS Live, as well as all the activities of organisation of sporting events of RCS Sport S.p.A. (also through the company RCS Sports and Events DMCC with registered office in Dubai, active in the organisation of sports events in the United Arab Emirates). The RCS Pubblicità division includes all advertising sales activities in Italy, excluding Childhood Magazines, Classifieds and Digitcast, which operate directly through their concessionaire or via third-party concessionaires. Local advertising sales for customers in Tuscany, Emilia-Romagna, Trentino Alto Adige, Veneto, Campania, Lazio and the provinces of Brescia and Bergamo are assigned to sub-concessionaires. The division’s activities include advertising sales on the websites Kelkoo and Warner Music, as well as for the first two months of the year, national print advertising sales for the Monrif Group daily newspapers - QN, Il Giorno, Il Resto del Carlino and La Nazione - (“Poligrafici Editoriale”). Furthermore, it should be noted that, following the termination of the concession contract, from January 1, 2017, RCS Pubblicità no longer sells the advertising spaces of the Itedi Group. The Pubblicità division is also the concessionaire for third-party publishers of domestic advertising sales (print and on-line) for some publications distributed in Southern Italy. The agreements were entered into with the following publishers: Società Editrice Sud or SES, which publishes Gazzetta del Sud, Gazzetta Avvisi (Friday insert also on-line), Noi Magazine (Thursday school insert) and Gazzetta del Sud.it; Domenico Sanfilippo Editore, which publishes La Sicilia and La Sicilia.it; Editrice del Sud Edisud, the publisher of Gazzetta del Mezzogiorno and Gazzetta del Mezzogiorno.it; and Giornale di Sicilia Editoriale Poligrafica, which publishes Giornale di Sicilia and gds.it. Since 2016, the Group has had a domestic print and on-line advertising sales sub-concession agreement with Piemme S.p.A. relating to Leggo and Leggo.it. The RCS Live events agency is known for its direct, multimedia and efficient approach to the design, planning and execution of business to consumer, business to business and corporate events. RCS Sport S.p.A. is a Sport and Media company, one of the most important players in the Italian and international scene: RCS Sport organises and manages extremely high profile mass events, both at national and international level, for a variety of sports, mainly cycling and running (including the Giro d’Italia, the Milano Sanremo, the Tirreno Adriatico, Il Lombardia, the Dubai Tour and the Abu Dhabi Tour in cycling and the Milano Marathon and The Color Run in running), by providing a full and customised range of services as well as advertising sales activities for itself and on behalf of third parties.

Financial highlights

(€/millions) First half 2017 First half 2016 Change % change Advertising and sundry events (1) 114.5 135.0 (20.5) (15.2) Sports events (2) 67.8 46.4 21.4 46.1 Total revenue from sales and services 182.3 181.4 0.9 0.5 EBITDA 22.5 10.4 12.1 >100

(1) At June 30, 2017, they include advertising revenue of €112 million (€132.4 million at June 30, 2016) and other revenue of €2.5 million (€2.6 million at June 30, 2016). (2) At June 30, 2017, they include advertising revenue of €24.8 million (€17.8 million at June 30, 2016) and other revenue of €43 million (€28.6 million at June 30, 2016).

Market trend

In Italy, the advertising market (Source: Nielsen) closed the first six months of 2017 with a decrease of 3% compared to 2016. In particular, the newspapers segment was down by 10.8%, magazines by 7%, Billboards by 5.7%, TV by 1.9% and Internet by 1.7%. Bucking this trend, advertising investments in Radio rose by +5%.

Segment results

Total revenue for the segment at June 30, 2017 amounted to €182.3 (€181.4 million at June 30, 2016), marking growth of €0.9 million compared to the same period of the previous year. The trend reflects the increase in revenue due to the organisation of sporting events, offset by the drop in advertising sales of the RCS Pubblicità division, of which €16 million due to the aforementioned termination of advertising sales contracts of the publications of some third-party publishers. Based on the current perimeter, the fall in advertising revenue was €4.4 million.

In relation to RCS publications/sites, with respect to the previous year, a decrease was recorded in advertising sales on Newspapers (-€5.3 million), adversely impacted by the comparison with 2016 in which the European football championships were held. Magazines (+€0.6 million) and Digital (+€0.5 million) recorded growth.

Note should be taken, as already outlined, of the strong performance by advertising revenue of sporting events, which increased by €7 million (€3.7 million on a like-for-like basis) and other revenue was up by €14.4 million. These results were also achieved thanks to the significant development of television rights connected with cycling races, in particular the Giro d’Italia which, this year, celebrated its 100th year, with huge success in terms of audience both in Italy and abroad.

EBITDA for the area totalled €22.5 million, improving by €12.1 million on the previous year. Net of the calendar of sporting events, growth is €10.2 million, thanks to higher revenue and the rationalisation of costs (both structure and related to events).

UNIDAD EDITORIAL

Segment profile

Unidad Editorial is one of the main players in the Iberian publishing market where it operates with several forms of media and brands. It operates in the daily and periodic press, in book publishing, in radio broadcasting, in event and conference organisation (also in Portugal) and in distribution, with products in its own portfolio and numerous other national and international products, through its own distribution company Logintegral 2000 SAU. It also owns, through Veo TV, a multiplex for national digital television transmission.

As regards the product portfolio, the Group publishes El Mundo, Spain's number two daily newspaper in terms of circulation, and is leader in sports news, with the daily paper Marca, and in business news, with the daily newspaper Expansión. It maintains a web presence through sites for each of its publications, elmundo.es, marca.com and expansión.com. It is active in the magazines market with the women’s magazine Telva and specialist magazines (Marca Motor and Actualidad Económica). It operates in book publishing with the publishing houses La Esfera de los Libros and A Esfera dos Livros (Portugal). It operates in radio with Radio Marca, the top national sports radio station. In digital TV, it broadcasts two television channels: Discovery Max and Gol TV.

Financial highlights

(€/millions) First half 2017 First half 2016 Change % change Publishing revenue 53.8 62.4 (8.6) (13.8) Advertising revenue 67.9 75.8 (7.9) (10.4) Other revenue 25.5 21.5 4.0 18.6 Total revenue from sales and services (1) (2) 147.2 159.7 (12.5) (7.8) EBITDA 16.4 10.0 6.4 64.0

(1) of which add-on product sales: 2.8 3.3

(2) Revenue from add-ons at June 30, 2017 stood at €2.8 million, €2.6 million of which was attributable to publishing revenue (at June 30, 2016 the total was €3 million) and €0.2 million to other revenue (€0.3 million at June 30, 2016).

Market trend

In June 2017, there was a 1% decrease in the gross advertising sales market compared to the same period of 2016 (Source: i2p, Arce Media). The newspapers market fell by 9%, magazines dropped by 7.5% and supplements registered a drop of 11.3% compared to the same period in 2016. The internet segment recorded a positive performance, increasing by 8.8%.

In June 2017, the sales performance on the newspapers market declined compared to the same period of 2016. Circulation figures for Spain until June (Source: OJD) regarding the general interest newspaper market (publications with a circulation exceeding 60 thousand copies), show an overall reduction of 11.8%. The fall in the circulation of business newspapers was 5.1% in the same period. Daily sports newspapers saw the same trend, with circulation down by 10.3%.

Segment results

Consolidated revenue in the first half of 2017 came to €147.2 million, down by €12.5 million (-7.8%) over the same period of 2016, also as a result of the continuous revision of the promotional policy for Group publications (to the benefit of profitability), and adversely impacted by the comparison with 2016, characterised by the presence of the European Football Championships. Net of these extraordinary events, the downturn would amount to €7.9 million (-5.1%). Digital revenue in the segment in June 2017 accounted for 19.6% of the segment’s total revenue, up 2% with respect to the same period in 2016.

Publishing revenue came to €53.8 million for the first half of 2017, down by €8.6 million; however, excluding the variation generated by the aforementioned revision of the promotional policy, the reduction would be €6.1 million (-10.2%), attributable to the general trend in the newspapers market.

The data recently published by EGM (Estudio General de Medios) confirm Unidad Editorial’s leadership in the newspapers sector which, through its brands, reaches around 2.8 million readers on a daily basis, outperforming direct competitors by more than 500 thousand readers.

The average daily circulation of El Mundo in the first half of 2017, including digital copies, stood at a total of 121 thousand average copies, marking a decrease of 11% compared to the same period in the previous year. According to the OJD survey (June 2017) of the total paper circulation market, El Mundo, with an average of 98 thousand copies, is confirmed as the second general interest publication at national level, recording a better performance than its direct competitors. It should be pointed out that, on May 9, a special issue of the newspaper was released, in order to celebrate the publication of the 10,000 edition of the newspaper. From May 30 of this year, the management of the newspaper El Mundo has been entrusted to Francisco Rosell Fernández.

The circulation of the sports daily Marca (average daily circulation of roughly 137 thousand copies, including digital copies), fell by 8% over the same period in the previous year, with digital copies down by 12.3%. OJD figures (total paper circulation) in the first half of the year confirm Marca’s leadership with 129 thousand copies on average, also registering a better circulation performance than its direct competition, and the market average. As regards the publishing initiatives, it should be noted that, on June 9, on world environment day, a special edition of Marca was published, printed on green paper for the first time. The initiative was implemented in order to support protection of the environment, and made provision for the allocation of 10% of the price of each copy sold to WWF.

Also for Expansión, in the first half of 2017, OJD figures (total paper circulation) confirm the undisputed leadership of the newspaper, with 24 thousand average copies and a better performance than the market. In June, Expansión achieved average daily circulation of roughly 36 thousand copies, including digital copies, a decrease of roughly 3% compared to the same period of 2016.

In terms of on-line activities, elmundo.es had a monthly average (Source: Omniture) of 47.4 million unique browsers in the first half of 2017, (+15% compared to the figures in the same period of 2016), and average weekly unique browsers amounted to 3.3 million (+12.3% compared to the first half of 2016). At the end of June 2017, marca.com reached a monthly average of 43.4 million unique browsers (+7.8% compared to the same period of the previous year), and average weekly unique browsers amounted to 4.7 million (+8.1% compared to the first half of 2016). The new Marca portal was launched in Mexico in January, in partnership with Claro, a company operating in the communications sector in Latin America, which resulted in significant growth in unique monthly users in terms of traffic in this area (+83%).

The average monthly unique browsers of expansión.com reached an average of 10.9 million unique users in the first six months of 2017, up by 20.8% compared to the same period in the previous year. Average weekly unique browsers totalled 0.7 million (+21.7% compared to the same period of 2016). All three websites recorded a significant increase in mobile access.

Advertising revenue, amounting to €67.9 million, decreased by €7.9 million (-10.4%) compared to the same period of 2016. Total advertising sales for on-line media reached roughly 35.1% of total advertising revenue. The decrease in advertising revenue was also adversely impacted by the comparison with the first half of 2016, characterised by the presence of the European Football Championships. Net of these extraordinary events, the decrease in advertising revenue goes from €7.9 million to €5.7 million

Other revenue, amounting to €25.5 million, increased by €4 million compared to the same period last year. The phenomena which contributed to this growth include the improvement in the revenue of the TV area achieved through the broadcasting of the new channel GOL TV which replaced Canal 13 previously broadcast via the Multiplex owned by the Group, and betting activities carried out through the Marca Apuestas platform.

Unidad Editorial closed the first half of 2017 with positive EBITDA of €16.4 million which, based on a comparison with EBITDA in the first half of 2016 (positive €10 million), registered an improvement of €6.4 million; the decrease in traditional revenue was more than offset by continuous cost reduction and efficiency recovery initiatives and the growth in digital revenue.

OTHER CORPORATE ACTIVITIES

Segment profile

This segment includes the service structures providing support to other group companies and business units. These include, in particular, IT, administration and tax, management control, finance and treasury, procurement, legal and corporate affairs, human resources and facility management activities, serving all operating segments. Added to these are the structures responsible for Group-wide policy-making, control and coordination.

The segment paid a contribution to support the Fondazione Corriere della Sera, targeted at the cataloguing and custody of the archives of the Corriere della Sera, RCS Group magazines and publishing houses. The Foundation increases the archive and cultural value of its assets through intense activities involving debates, conferences, publications and photographic and documentary exhibitions.

Financial highlights

(€/millions) First half 2017 First half 2016 Change % change Publishing revenue 0.0 0.4 (0.4) (100.0) Advertising revenue 0.3 0.3 0.0 0.0 Other revenue 12.1 18.4 (6.3) (34.2) Total revenue from sales and services 12.4 19.1 (6.7) (35.1) EBITDA (10.2) (14.7) 4.5 (30.6)

Segment results

Revenue, amounting to €12.4 million, decreased by €6.7 million compared to the same period in the previous year. It dropped primarily due to the reduction in costs achieved by all departments, which therefore determined less charge-backs to the Group’s business areas. Thanks to the efficiencies achieved, EBITDA remained in line with the first half of 2016 (which included net non-recurring expense of €4.4 million).

RELATED PARTY TRANSACTIONS

Please refer to note 12 for an analysis of related party transactions.

SIGNIFICANT EVENTS DURING THE FIRST HALF OF THE YEAR

Please refer to note 4 for a list of the significant events during the first half of the year.

EVENTS AFTER THE REPORTING DATE

Please refer to note 5 or a list of the significant events after the reporting date.

OUTLOOK FOR THE CURRENT YEAR

Within a context still characterised by uncertainty, and with the reference markets on the decline (circulation and advertising in Italy and in Spain), the Group’s performance improved significantly in the first half of 2017 compared to the same period in the previous year.

EBITDA, amounting to €69 million, growth of €35.1 million, EBIT, at €44 million, an increase of €37.7 million, and the profit, totalling €24 million, an increase of €26.1 million compared to the first half of 2016, are in line with the expectations as regards achievement of the Group’s objectives for 2017, mainly thanks to the effects of strong commitment to cutting costs and pursuing opportunities for the consolidation and development of revenue.

In view of the above and in the absence of other events unforeseeable at present, the profit objectives for 2017 are therefore confirmed, including EBITDA of around €140 million, growth in profit and positive and increased cash flows.

The evolution of the general situation in the economy and the reference sectors could, however, hinder the full achievement of these objectives.

ADDITIONAL INFORMATION REQUIRED BY CONSOB PURSUANT TO ART. 114, PARAGRAPH 5 OF ITALIAN LEGISLATIVE DECREE NO. 58/1998 OF MAY 27, 2013

a) Net financial debt of the RCS Group and of its Parent showing short-term and medium/long- term components separately

(€/millions) Carrying amount Change Jun-30-2017 Dec-31-2016 Non-current financial assets recognised for derivatives --- TO TAL NO N - C U RR ENT FINA NC IA L AS S ETS --- Securities --- Loan assets 4.4 0.6 3.8 Current financial assets recognised for derivatives -- Current loan and financial assets 4.4 0.6 3.8 Cash and cash equivalents 6.2 18.7 (12.5) TO TAL C UR REN T FIN AN C IAL A S S ETS 10.6 19.3 (8.7) Non-current loans and borrowings and financial liabilities (282.8) (275.1) (7.7) Non-current financial liabilities recognised for derivatives - (5.1) 5.1 TOTAL NO N-CURRENT FINANCIAL LIABILITIES (282.8) (280.2) (2.6) Current loans and borrowings and financial liabilities (88.2) (105.2) 17.0 Current financial liabilities recognised for derivatives (2.8) - (2.8) TO TAL C UR REN T FIN AN C IAL LIA B ILITIES (91.0) (105.2) 14.2 Net financial debt (1) (363.2) (366.1) 2.9

Net financial debt at June 30, 2017 recorded a slight drop compared to December 31, 2016. The decrease of €2.9 million is attributable to the positive contribution of ordinary operations (including the collection of dividends) offset in part by outlays for non-recurring expense accrued in previous years and outflows for capital expenditure.

The net financial debt of RCS MediaGroup S.p.A. is shown below, with short-term and long-term components displayed separately.

Carrying amount (€/millions) Jun-30-2017 Dec-31-2016 Change Cash and cash equivalents 0.4 1.1 (0.7) Current loan assets 44.8 19.5 25.3 A) TOTAL CURRENT FINANCIAL AS S ETS 45.2 20.6 24.6

Bank loans and overdrafts ( 23.2) ( 38.9) 15.7 Current loans and borrowings ( 600.7) ( 580.4) ( 20.3) Non-current financial liabilities recognised for derivatives ( 2.8) - ( 2.8) B) TOTAL CURRENT FINANCIAL LIABILITIES ( 626.7) ( 619.3) ( 7.4)

(A+B) Total current net financial debt ( 581.5) ( 598.7) 17.2

Financial assets recognised for derivatives - - - C) TOTAL NON-CURRENT FINANCIAL ASSETS - - -

Non-current loans and borrowings ( 278.8) ( 269.8) ( 9.0) Non-current financial liabilities recognised for derivatives - ( 5.1) 5.1 D) TOTAL NON-CURRENT FINANCIAL LIABILITIES ( 278.8) ( 274.9) ( 3.9)

(C+D) Total non-current net financial debt ( 278.8) ( 274.9) ( 3.9)

Net financial debt ( 860.3) ( 873.6) 13.3

The net financial debt of RCS MediaGroup S.p.A. stood at €860.3 million at June 30, 2017, an improvement of €13.3 million. Please note the positive contribution of ordinary operations (including the collection of dividends) offset, only partly, by outlays incurred for capital expenditure.

b) Past due borrowing positions broken down by type (financial, trade, tax and social security) and any related action taken by group creditors (reminders, injunctions, supply suspensions)

(€/millions) Analysis of past due borrowing positions 31 - 90 91 - 180 181 - 360 Total past Jun-30-2017 30 days > 360 days Falling due Total days days days due

Trade borrowing positions 14.5 15.5 11.8 10.2 14.3 66.3 197.3 263.6 Financial borrowing positions 91.0 91.0 Tax borrowing positions 14.0 14.0 Social security borrowing positions 9.2 9.2 Other borrowing positions 0.2 0.1 0.2 0.5 63.5 64.0 Total current borrowing positions 14.5 15.7 11.9 10.2 14.5 66.8 375.0 441.8

The total of current borrowing positions excludes items with no contractual expiry such as short-term portions of provisions for risks.

Short-term borrowing positions amounted to €441.8 million at June 30, 2017, marking an increase of €9.5 million over March 31, 2017. This increase is due to greater short-term financial positions (+€19.5 million) and higher tax, social security and other positions (+€5.8 million). The increase is partially mitigated by the fall in trade borrowing positions for €15.8 million. Positions which are not past due, of €375 million, represent roughly 84.9% of the total (at March 31, 2017 they amounted to €355.5 million and accounted for 82.2% of the total). At June 30, 2017, there were no past due amounts for financial, tax or social security borrowing positions.

Past due payables, mainly trade positions, amounted to a total of €66.8 million (€76.8 million at March 31, 2017), marking a decrease of €10 million compared to March 2017. In particular, the comparison with March 31, 2017 showed a decrease of €7.9 million for the range 31-90 days, €5.4 million for over 360 days and €2.7 million for 181-360 days. These decreases were partially offset by increases of €4.3 million in the range 91-180 days and €1.7 million in the bracket lower than 30 days.

Past due positions include €14.5 million in payables past due by less than 30 days (€12.8 million at March 31, 2017), essentially associated with business operations. The remaining past due amounts of €52.3 million include a total of €13.3 million in past due amounts owed to agents (19.9% of the total past due). On the basis of sector practice, a monthly advance is paid to agents for their respective activities and is recognised in the financial statements under other receivables. The advances to agents relating to past due payables amounted to around €12.5 million. Amounts owed to agents past due by over 360 days represent approximately 60% of that past due range. Positions maturing on June 30, 2017, amounting to roughly €11.2 million, have been conventionally classified as maturing payables. Past due trade positions totalling €66.3 million (€76.1 million at March 31, 2017) relate mainly to RCS MediaGroup S.p.A. (€39.7 million).

As part of the current stage of the analysis, revision and renegotiation of supply relationships, the Company has received a number of trade-related injunctions (for insignificant amounts and at the date of this Half-year Report fully settled), reminders and/or warnings from suppliers to comply, which were handled on a case by case basis.

c) Related party transactions of the RCS Group and its Parent

Please refer to the relevant note to the condensed interim consolidated financial statements for detailed information on transactions with related parties of the Group and of RCS MediaGroup S.p.A..

d) Failure to comply with covenants, negative pledges and any other group borrowing clause which limits the use of financial resources, including updated degree of compliance with such clauses

On June 14, 2013, RCS MediaGroup S.p.A. signed a Loan Agreement with a pool of banks for an original amount of €600 million.

The Company and the Financing Banks signed an Agreement on June 16, 2016 for the Restructuring of the Loan, composed of 2 credit lines for a total of €352 million, of which:

- Credit Line A (amortising), a term line of €252 million, to be repaid by December 31, 2019, in accordance with a repayment plan that envisages repayments in 3 instalments in 2017 for a total of €35 million (of which the first two instalments of €10 million each repaid respectively on March 31 and June 30). - Revolving Credit Line, a revolving line of €100 million, to be repaid on December 31, 2019 and €85 million drawn down at June 30, 2017.

The Restructuring Agreement also reviewed the method for defining the spreads on the 3-month Euribor rate used as benchmark for each of the two Credit Lines. The spreads were initially 422.5 basis points on Line A and 397.5 basis points on the Revolving Line, with an expected decrease on an annual basis in relation to improvement in the Leverage Ratio (NFD/EBITDA): following approval of the 2016 financial statements, these spreads both reduced by 50 basis points: that on line A down to 372.5 basis points effective from July 1, 2017 and down to 347.5 basis points on the Revolving line from April 28, 2017. In addition, the Company is under no obligation to dispose of assets. The Loan Agreement establishes the right of lenders to request repayment of the credit lines disbursed should the applicable financial covenants (as described below) be breached, or when additional qualifying events occur such as, inter alia, failure to pay the amounts due under the Loan Agreement, cross default in relation to the Group’s financial debt or the initiation of enforcement procedures by creditors for amounts exceeding certain thresholds, the violation of obligations undertaken under the Loan Agreement, Change of Control or the occurrence of events that have a significant negative effect as defined therein.

In particular, for 2017 and subsequent years, the Restructured Loan Agreement envisages the following financial covenants for the Company:

Reference Date Financial Covenants (at Group consolidated financial statements level)

Dec-31-2017 (i) Net Financial Debt < equal to €385 million; (ii) Net Financial Debt/EBITDA ratio (Leverage Ratio), lower than 3.45x, (iii) Minimum Equity of €95.2 million

(i) Net Financial Debt < equal to €315 million; Dec-31-2018 (ii) Net Financial Debt/EBITDA ratio (Leverage Ratio), lower than 2.30x, (iii) Minimum Equity of €95.2 million

The first covenant (relating to net financial debt) is checked both annually and every six months (in the latter case, compliance with a threshold value plus € 25 million compared to the figure on the previous December 31). At June 30, 2017 these covenants were fully respected.

On July 4, 2017, the company reached an agreement with Intesa San Paolo for a term sheet for the organisation and direct underwriting of a loan of €332 million expiring on December 31, 2022, targeted at the full refinancing of the current loan agreement.

The main terms and conditions in the term sheet (which must be followed by the formalisation of a loan agreement) are, inter alia, as follows:

a. the maintenance of the breakdown of the loan into an Amortising Credit Line of €232 million and a Revolving Credit Line of €100 million; b. an annual interest rate equal to the sum of the reference Euribor and a variable margin depending on the Leverage Ratio, more favourable for the Company with respect to the margins set forth in the current Loan Agreement; c. the provision of a single covenant represented by the Leverage Ratio (Net financial debt/EBITDA). This covenant must not be higher than:  3.45x at December 31, 2017  3.25x at December 31, 2018  3.00x on December 31 of each subsequent year; d. a repayment plan for the amortising term line which envisages a repayment of €15 million on December 31, 2017, followed by half-yearly instalments of €12.5 million and a final instalment of €104.5 million.

e) Business plan implementation status, including any variations between actual and forecast data

For comments on the Group’s performance in the first half of 2017, please refer to the comments provided in this Half-year Report. The Group’s economic performance with respect to the forecasts for 2017 is described in the section “Outlook”, with reference to the objectives indicated in the Report on Operations to the 2016 Financial Statements.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

Condensed income statement

(€/millions) First half 2017 2016 I Revenue 471.7 504.1 II Increase in internal work capitalised 0.0 0.0 II Changes in work in progress, finished and semi-finished products (0.2) 0.0 II Raw materials and services (265.0) (322.8) III Personnel expense (131.7) (140.1) II Other operating expense, net (1.6) (3.8) IV/V Provisions and allowance for impairment (4.6) (4.8) VI Share of profits of equity-accounted investees 0.4 1.3 VII/VIII/IX/X Amortisation, depreciation and impairment losses (25.0) (27.6) Operating profit 44.0 6.3 XI Net financial expense (13.0) (16.1) XII Other gains on financial assets/liabilities, net 1.2 0.8 Profit (loss) before tax 32.2 (9.0) XIII Income taxes (8.2) (1.5) Profit (loss) from continuing operations 24.0 (10.5) XIV Profit (loss) from assets held for sale and discontinued operations 0.0 8.4 Profit (loss) for the period 24.0 (2.1) Attributable to: XV Profit (loss) attributable to non-controlling interests 0.0 0.0 Profit (loss) attributable to owners of the parent 24.0 (2.1) Profit (loss) for the period 24.0 (2.1)

Basic earnings (losses) per share: continuing operations 0.05 ( 0.02) Diluted earnings (losses) per share: continuing operations 0.05 ( 0.02) Basic earnings (losses) per share: assets held for sale - 0.02 and discontinued operations Diluted earnings (losses) per share: assets held for sale and - 0.02 discontinued operations

The notes form an integral part of these condensed interim consolidated financial statements.

Condensed statement of comprehensive income

(€/millions) Note First half 2017 2016 Profit (loss) for the period 24.0 (2.1)

Other comprehensive income (expense):

Other comprehensive income/(expense) that will subsequently be reclassified to profit or loss: Gains (losses) on foreign currency translation of foreign operations 32 - 0.0 Reclassification of gains (losses) on foreign currency translation of foreign operations 0.0 (8.3) Losses on cash flow hedges 32 (0.1) (0.7) Reclassification of gains on cash flow hedges to profit or loss 32 2.0 2.6 Fair value gains (losses) on available-for-sale financial assets 32 - - Reclassification of fair value gains (losses) on available-for-sale financial assets to profit or loss 32 - - Share of comprehensive income (expense) of equity-accounted investees 32 - -

Income tax on other comprehensive income 32 (0.5) (0.5)

Other comprehensive income/(expense) that will not be subsequently reclassified to profit or loss:

Actuarial (loss)/gain on defined benefit plans 32 0.0 0.0 Actuarial (loss)/gain on defined benefit plans relating to equity- accounted investees 32 - - Income tax on other comprehensive income 32 0.0 0.0

Total other comprehensive income (expense) 1.4 (6.9)

Comprehensive income (expense) 25.4 (9.0)

Comprehensive income (expense) attributable to: non-controlling interests - 0.0 owners of the parent 25.4 (9.0)

Comprehensive income (expense) 25.4 (9.0)

The notes form an integral part of these condensed interim consolidated financial statements.

Condensed statement of financial position

(€/millions) Note Jun-30-2017 Dec-31-2016

AS S ETS XVII Property, plant and equipment 14 80.0 87.0 XVIII Investment property 21.0 21.3 XVI Intangible assets 15 384.8 394.6 XIX Non-current financial assets 16 71.7 73.2 XIX Deferred tax assets 16 113.1 119.1 Total non-current assets 670.6 695.2 XX Inventories 17 16.7 17.4 XXI Trade receivables 18 256.4 256.3 XXIII Other receivables and current assets 19 35.9 37.7 XXIII Current tax assets 6.1 6.9 XXXIII Current loan assets and financial assets 20 4.4 0.5 XXXIII Cash and cash equivalents 20 6.2 18.7 Total current assets 325.7 337.5 XXVII Non-current assets held for sale -- TOTAL ASSETS 996.3 1,032.7 EQUITY AND LIABILITIES XXVIII Share capital 475.1 475.1 XXVIII Reserves 30-31 (43.0) (44.7) XXVIII Losses carried forward (334.4) (337.9) XXVIII Profit for the year 3.5 XXVIII Profit for the period 24.0 Total equity attributable to owners of the parent 121.7 96.0 XXVIII Non-controlling interests 2.6 4.4 Total 124.3 100.4 XXIX Non-current loans and borrowings and financial liabilities 20 282.8 275.1 XXXI Financial liabilities recognised for derivatives 20 - 5.1 XXVI Employee benefits 21 39.6 40.2 XXIV Provisions for risks and charges 21 13.6 13.9 XXV Deferred tax liabilities 55.7 56.4 XXIII Other non-current liabilities 1.4 3.3 Total non-current liabilities 393.1 394.0 XXX Current loans and borrowings and financial liabilities 20 91.0 105.1 XXIII Current tax liabilities 2.6 0.2 XXII Trade payables 22 263.6 292.9 XXIV Current portion of provisions for risks and charges 21 37.1 44.6 XXIII Other current liabilities 23 84.6 95.5 Total current liabilities 478.9 538.3 XXVII Liabilities relating to assets held for sale -- TO TAL EQ UITY AND LIABILITIES 996.3 1,032.7 The notes form an integral part of these condensed interim consolidated financial statements.

Condensed statement of cash flows (*)

First half First half (€/millions) Note 2017 2016

A) Cash flows from operating activities Pre-tax profit/loss from continuing operations 32.2 (9.0) Profit (loss) from assets held for sale and discontinued operations 0.0 0.0 Amortisation, depreciation and impairment losses 25.0 27.6 (Gains) losses and other non-monetary items (3.5) (1.9) (Gains) losses of equity-accounted investees 16 (0.4) (1.3) Dividends from equity-accounted investees 16 1.7 3.6 Net financial income (including dividend income from AFS) 12.9 15.2 - of which with related parties 12 0.8 7.1 Decrease in employee benefits and provisions for risks and charges 24 (1.7) (8.2) Changes in working capital 25 (42.2) (12.6) - of which with related parties 12 (13.3) (17.4) Income taxes paid 0.0 0.0 Change in assets held for sale and discontinued operations 0.0 0.0 Total 24.0 13.4 B) Cash flows from (used in) investing activities Acquisition of equity investments (net of dividends received from AFS) 0.0 0.6 Capital expenditure in property, plant and equipment and intangible assets 26 (10.5) (21.2) (Purchase) sale of other non-current financial assets 0.1 0.4 - of which with related parties 12 0.0 0.2 Proceeds from sale of equity investments 27 (1.0) 121.1 Proceeds from sale of property, plant and equipment and intangible assets 0.0 0.9 Change in assets held for sale and discontinued operations 0.0 0.0 Total (11.4) 101.8 Free cash flow (A+B) 12.6 115.2 C) Cash flows used in financing activities Net change in loans and borrowings and other financial assets 28 5.5 (102.7) - of which with related parties 12 (11.9) (35.8) Net interest paid (13.5) (15.1) - of which with related parties 12 (0.8) (7.1) Dividends paid 0.0 0.0 Change in equity reserves (1.4) (0.3) Change in assets held for sale and discontinued operations 0.0 0.0 Total (9.4) (118.1) Net increase (decrease) in cash and cash equivalents (A+B+C) 3.2 (2.9) Opening cash and cash equivalents (20.2) (25.8) - of which with related parties 12 0.0 (17.3) Closing cash and cash equivalents 29 (17.0) (28.7) - of which with related parties 12 0.0 (13.0) Increase (decrease) for the period 3.2 (2.9)

ADDITIONAL DISCLOSURES OF THE STATEMENT OF CASH FLOWS (€/millions) Opening cash and cash equivalents consisting of: (20.2) (25.8) Cash and cash equivalents 18.7 9.8 Cash and cash equivalents of assets held for sale and discontinued operations 0.0 2.8 Current bank loans and overdrafts (38.9) (38.4) Closing cash and cash equivalents (17.0) (28.7) Cash and cash equivalents 6.2 10.5 Change in assets held for sale and discontinued operations 0.0 0.0 Current bank loans and overdrafts (23.2) (39.2) Increase (decrease) for the period 3.2 (2.9) (*) Also pursuant to CONSOB Resolution no. 15519 of July 27, 2006.

The notes form an integral part of these condensed interim consolidated financial statements.

Condensed statement of changes in equity

Treasury shares Equit y Fair value Equ i t y Share premium and equit y Losses carried Profit (loss) attributable attributable to (€/millions) Share capital Legal reserve reserve Equ i t y reserve transaction forward for the year to owners of non-controlling note no. 31 note no. 30 the parent interests

Balance at Dec-31-2015 475.1 110.4 19.1 (174.8) 2.3 (156.4) (175.7) 100.0 5.2 105.2

Allocation of loss for the year ended Dec-31-2015 as per Shareholders’ Meeting resolution of April 28, 2016 - to retained earnings (losses carried forward) (175.7) 175.7 0.0 0.0 Equity t ransactions (1.5) (1.5) 1.1 (0.4) Other movements 5.8 (5.8) 0.0 Change in equit y at t ributable t o non-controlling interests 0.0 (2.0) (2.0) Total comprehensive income (expense) (6.9) (2.1) (9.0) 0.0 (9.0) Balance at Jun-30-2016 475.1 110.4 19.1 (170.5) (4.6) (337.9) (2.1) 89.5 4.3 93.8

Treasury shares Equ i t Equit y Fair value y Share premium and equit y Losses carried Profit (loss) attributable attributable to (€/millions) Share capital Legal reserve reserve Equ i t y reserve transaction forward (*) for the year to owners of non-controlling note no. 31 note n. 30 the parent interests

Balance at Dec-31-2016 475.1 110.4 19.1 (170.6) (3.6) (337.9) 3.5 96.0 4.4 100.4

Allocation of profit for the year ended Dec-31-2016 as per Shareholders’ Meeting resolution of April 27, 2017 - to retained earnings (losses carried forward) 3.5 (3.5) 0.0 0.0 Equity t ransactions 0.3 0.3 (1.8) (1.5) Other movements 0.0 0.0 Change in equit y at t ributable t o non-controlling interests 0.0 0.0 Total comprehensive income (expense) 1.4 24.0 25.4 0.0 25.4 Balance at Jun-30-2017 475.1 110.4 19.1 (170.3) (2.2) (334.4) 24.0 121.7 2.6 124.3 (*) Inclusive of €1.2 million in unavailable retained earnings that may be allocated to youth sports schools pursuant to Italian Law no. 91/81 and in accordance with the By-laws in force of the subsidiary RCS Sport S.p.A.. 4

Income statement pursuant to CONSOB Resolution no. 15519 of July 27, 2006

€/millions Note First half 2017 2016 Revenue 11 471.7 504.1 - of which with related parties 12 106.4 118.2 Increase in internal work capitalised - - Changes in work in progress, finished and semi-finished products (0.2) - Raw materials and services (265.0) (322.8) - of which with related parties 12 (22.5) (33.2) - of which non-recurring 13 - (4.2) Personnel expense (131.7) (140.1) - of which with related parties 12 (1.9) (2.8) - of which non-recurring 13 - (0.2) Other operating expense, net (1.6) (3.8) - of which with related parties 12 0.9 0.4 - of which non-recurring 13 - (1.8) Provisions and allowance for impairment (4.6) (4.8) - of which non-recurring 13 - (0.1) Share of profits of equity-accounted investees 0.4 1.3 Amortisation, depreciation and impairment losses (25.0) (27.6) Operating profit 44.0 6.3 Net financial expense (13.0) (16.1) - of which with related parties 12 (0.8) (7.1) Other gains on financial assets/liabilities, net 1.2 0.8 Profit (loss) before tax 32.2 (9.0) Income taxes (8.2) (1.5) Profit (loss) from continuing operations 24.0 (10.5) Profit (loss) from assets held for sale and discontinued operations - 8.4 Profit (loss) for the period 24.0 (2.1) Attributable to: Profit (loss) attributable to non-controlling interests - - Profit (loss) attributable to owners of the parent 24.0 (2.1) Profit (loss) for the period 24.0 (2.1)

Basic earnings (losses) per share: continuing operations 0.05 (0.02) Diluted earnings (losses) per share: continuing operations 0.05 (0.02) Basic earnings (losses) per share: assets held for sale - and discontinued operations 0.02 Diluted earnings (losses) per share: assets held for sale and - discontinued operations 0.02

Statement of financial position pursuant to CONSOB Resolution no. 15519 of July 27, 2006 (€/millions) Note Jun-30-2017 Dec-31-2016

AS S ETS Property, plant and equipment 14 80.0 87.0 Investment property 21.0 21.3 Intangible assets 15 384.8 394.6 Non-current financial assets 16 71.7 73.2 Deferred tax assets 16 113.1 119.1 Total non-current assets 670.6 695.2 Inventories 17 16.7 17.4 Trade receivables 18 256.4 256.3 - o f whic h with re late d partie s 12 23.5 21.6 Other receivables and current assets 19 35.9 37.7 Current tax assets 6.1 6.9 Current loan assets and financial assets 20 4.4 0.5 - o f whic h with re late d partie s 12 3.9 0.1 Cash and cash equivalents 20 6.2 18.7 Total current assets 325.7 337.5 Non-current assets held for sale -- TOTAL ASSETS 996.3 1,032.7 EQUITY AND LIABILITIES Share capital 475.1 475.1 Reserves 30-31 (43.0) (44.7) Losses carried forward (334.4) (337.9) Profit for the year 3.5 Profit for the period 24.0 Total equity attributable to owners of the parent 121.7 96.0 Non-controlling interests 2.6 4.4 Total 124.3 100.4 Non-current loans and borrowings and financial liabilities 20 282.8 275.1 - o f whic h with re late d partie s 12 11.5 11.1 Financial liabilities recognised for derivatives 20 - 5.1 - o f whic h with re late d partie s 12 - 1.2 Employee benefits 21 39.6 40.2 Provisions for risks and charges 21 13.6 13.9 Deferred tax liabilities 55.7 56.4 Other non-current liabilities 1.4 3.3 Total non-current liabilities 393.1 394.0 Current loans and borrowings and financial liabilities 20 91.0 105.1 - o f whic h with re late d partie s 12 5.2 12.5 Current tax liabilities 2.6 0.2 Trade payables 22 263.6 292.9 - o f whic h with re late d partie s 12 9.2 20.6 Current portion of provisions for risks and charges 21 37.1 44.6 Other current liabilities 23 84.6 95.5 - o f whic h with re late d partie s 12 0.8 0.8 Total current liabilities 478.9 538.3 Liabilities relating to assets held for sale -- TO TAL EQ UITY AND LIABILITIES 996.3 1,032.7

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FORMAT, CONTENT AND OTHER INFORMATION ON THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. Corporate information

RCS MediaGroup S.p.A. (hereinafter also “RCS MediaGroup”) is a joint-stock company listed on the MTA (Italian Electronic Equities Market) of Borsa Italiana S.p.A.. The company is incorporated and domiciled in Milan, with its registered office at no. 8, Via Angelo Rizzoli, and it presides over the activities of the RCS Group.

On August 3, 2017, the RCS Group’s Half-year Report at June 30, 2017 was approved by the Board of Directors of RCS MediaGroup S.p.A. that authorised its publication.

RCS is an international multimedia publishing group that operates in daily newspapers, magazines, new media and digital and satellite TV and radio, organises major sporting events and is among the leading operators in advertising sales and distribution of publishing products in Italy and Spain.

The main subsidiary of RCS MediaGroup S.p.A. is Unidad Editorial S.A., controlled indirectly, and which operates predominantly in the Spanish market.

At June 30, 2017, the condensed interim financial statements included 55 direct and indirect subsidiaries consolidated on a line-by-line basis (56 at December 31, 2016). For more details on the equity investments, please refer to the attachment “List of the group’s equity investments at June 30, 2017”.

RCS MediaGroup S.p.A. does not have any subsidiaries with significant non-controlling investments.

2. Format and content

The RCS Group’s condensed interim consolidated financial statements were drawn up in compliance with IAS 34 “Interim Financial Reporting”, as also set out in Art. 154-ter of the Consolidated Finance Act (Legislative Decree no. 58/1998).

Said condensed interim consolidated financial statements were prepared on the basis of the interim financial statements of RCS MediaGroup S.p.A. and the subsidiaries as at the six months ended 30 June 2017, drafted in accordance with the IFRS. The statement of financial position of the subsidiary Unidad Editorial was approved by the Board of Directors on August 1, 2017.

KPMG S.p.A. reviewed the condensed interim consolidated financial statements. The engagement was assigned pursuant to shareholders’ resolution dated April 28, 2009.

The presentation currency of these condensed interim consolidated financial statements is the euro, which is used as the functional currency by most of the Group's companies. Unless otherwise specified, all amounts are stated in millions of euro.

3. Changes in the consolidation scope

The following companies previously consolidated on a line-by-line basis have left the consolidation scope:

- Canali Digitali s.r.l. (in liquidation) (liquidated)

4. Significant events during the first half of the year

 On January 27, 2017, RCS MediaGroup announced and published on the website www.rcsmediagroup.it:

- the calendar of the meetings of the Board of Directors and the Shareholders Meeting for the year and publications of the quarterly financial reports; - the model of the content of the quarterly disclosures that the Company will continue to prepare and publish, on a voluntary basis, until decided otherwise; - the methods and timing for approval by the Board of Directors of the quarterly financial reports and the methods for publishing such reports.

 On March 7, 2017, the RCS MediaGroup S.p.A. Board of Directors, chaired by Urbano Cairo, accepted the resignations of the alternate statutory auditors Barbara Negri and Ugo Rock, received on February 9, 2017.

 On March 17, 2017, the Board of Directors of RCS MediaGroup S.p.A., which met under the chairmanship of Urbano Cairo, examined and approved the results at December 31, 2016.

 On April 27, 2017, RCS MediaGroup S.p.A.’s ordinary Shareholders’ Meeting, chaired by Urbano Cairo, by a wide majority:

- unanimously approved the financial statements at December 31, 2016; - appointed Guido Croci and Paola Tagliavini, proposed by the shareholder Cairo Communication S.p.A., as Alternate Statutory Auditors of the Company’s Board of Statutory Auditors; - expressed a favourable vote on Section I of the Remuneration Report drafted by the Board of Directors; - approved the Board of Directors’ proposal for the disposal of treasury shares.

 With reference to the contract for the purchase of the investment held by the Company in RCS Libri S.p.A. signed on October 4, 2015 with Arnoldo Mondadori Editore S.p.A. (the “Contract”), as described in the 2016 Annual Report, some disputes were raised. In 2017, a settlement agreement was reached, with the waiving of reciprocal claims that did not determine any expenses for the Company. In that context, a price adjustment was also defined, provided for in the contract, amounting to around €2 million in favour of the buyer. The Company remains entitled to an earn-out of up to a maximum of €2.5 million, subject to the achievement of given results in the books segment by Arnoldo Mondadori Editore in 2017.

5. Events after the reporting period

 On July 5, 2017, RCS MediaGroup S.p.A. announced that it had reached an agreement with Intesa Sanpaolo for a term sheet for the organisation, direct underwriting and concession by Intesa Sanpaolo of a loan of €332 million, expiring on December 31, 2022, targeted at the full refinancing of the original bank loan taken out by the Company with a pool of banks on June 14, 2023, as amended from time to time (most recently on June 16, 2016). The main terms and conditions of the loan in the term-sheet (which must be followed by the formalisation of a loan agreement) are, inter alia, as follows: a) the breakdown of the loan into an Amortising term Credit Line of €232 million and a Revolving Credit Line of €100 million; b) an annual interest rate equal to the sum of the reference Euribor and a variable margin depending on the Leverage Ratio, more favourable for the Company with respect to the margins set forth in the current Loan Agreement; c) the provision of a single covenant represented by the Leverage Ratio (i.e. Net financial debt /EBITDA). This covenant must not be higher than (i) 3.45x at December 31, 2017, (ii) 3.25x

at December 31, 2018, and (iii) 3x at December 31 of each subsequent year; d) a repayment plan for the amortising term credit line which envisages a repayment of €15 million on December 31, 2017, followed by half-yearly instalments of €12.5 million.

6. Consolidation methods and accounting policies

The accounting policies adopted for the preparation of the condensed interim consolidated financial statements at June 30, 2017 are the same as those used to draft the consolidated financial statements at December 31, 2016. The Group did not adopt any accounting standards early, whose validity will take effect from 2018. In compliance with documents No. 2 of February 6, 2009 and no. 4 dated March 3, 2010 published jointly by Bank of Italy, CONSOB (the Italian Commission for Listed Companies and the Stock Exchange) and ISVAP (Italy's insurance industry regulator), it is reported that the condensed interim consolidated financial statements of the RCS Group have been prepared on a going concern basis. Furthermore, with reference to CONSOB communication no. DEM/11070007 of August 5, 2011, it is also noted that the Group does not hold bonds in its portfolio issued by central or local governments or government authorities, and, therefore, it is not exposed to the risk of market fluctuations.

The financial statement formats used in the condensed interim consolidated financial statements reflect the financial statements at December 31, 2016 in condensed format. Significant transactions with related parties and non-recurring items have been indicated in the appropriate schedules, as required by CONSOB Resolution No. 15519 of July 27, 2006. Therefore, the condensed interim consolidated financial statements do not include all the information required by annual financial statements and must be read together with the annual financial statements as at and for the year ended December 31, 2016. In order to appreciate the seasonality of the Group’s activities, please refer to note 33 “Income statement: analysis by quarter”.

Key sources of estimation uncertainty The preparation of the condensed interim consolidated financial statements has required using estimates and assumptions both for determining the carrying amounts of some assets and liabilities and for measuring contingent assets and liabilities. The estimates and assumptions are periodically reviewed and the effects of any changes immediately reflected in the financial statements. The current macroeconomic context (characterised in Italy by the start of an economic recovery which is still being consolidated) involved the preparation of estimates on future trends by taking into account said level of uncertainty. Therefore, it is possible that, following the drafting of the condensed interim consolidated financial statements, actual events may have a different outcome to that forecast for the condensed interim consolidated financial statements at June 30, 2017, causing significant adjustments to the carrying amounts of assets and liabilities, amongst which intangible assets with an indefinite useful life and deferred tax assets, because of their materiality. Certain measurement processes, in particular the determination of any impairment losses on intangible assets, or reviews of the economic useful lives, are generally carried out on a complete basis at year-end, or, nonetheless, when all the necessary information is available, unless there are impairment indicators which call for an immediate impairment test to be carried out or there are events subsequent to June 30 but prior to the publication date, which call for a careful evaluation.

Projections are also used when determining the provisions for risks and charges, the estimate of returns in the Newspapers Italy, Magazines Italy and Unidad Editorial segments, the allowance for impairment and other provisions for write-downs, particularly for valuations of inventories, as well as depreciation and amortisation, employee benefits and deferred taxes.

The following is a summary of the principal assumptions used by management in the Group's most critical valuation process, namely the determination of the recoverable amount of non-current assets, including goodwill.

Principal assumptions for determining the recoverable amount of non-current assets

The Group periodically reviews the carrying amount of intangible assets and property, plant and equipment to ensure that this is not higher than the recoverable amount. In particular, such an assessment is carried out whenever there are indications that these assets might be impaired. In the case of goodwill and intangible assets with an indefinite useful life, this assessment is performed once a year irrespective of any signs or evidence of impairment. For the cash generating units which include the intangible assets with an indefinite useful life, at June 30, 2017, an analysis was conducted to identify any indicators of impairment in the Group’s intangible assets. In particular, management took into consideration the impact of the trends in the financial figures for the current year on the forecast data used in the impairment tests as at December 31, 2016, and analysed the trend in interest rates to evaluate the repercussions of said trend on the estimate of the discount rate (WACC) to be applied to expected cash flows. The analysis took account of the sensitivity tests developed to better appraise the impacts that these changes could generate in determining the recoverable amount of the cash generating units identified above. No impairment indicators emerged.

7. Accounting standards, amendments and interpretations which entered into force and were applied as from January 1, 2017

No new accounting standards, amendments and interpretations were applicable for the first time as from January 1, 2017.

8. Accounting standards, amendments and interpretations endorsed by the EU and applicable for the annual period beginning on January 1, 2017

IFRS 15 - Revenue from Contracts with Customers

The standard, issued by the IASB in May 2014, amended in April 2016 and endorsed by the European Commission in September 2016, introduces a general framework to establish whether, when and to what extent revenue will be recognised. The standard replaces the recognition criteria set forth in IAS 18 - Revenue, in IAS 11 - Construction Contracts and in IFRIC 13 - Customer Loyalty Programmes, in IFRIC 15 - Agreements for the Construction of Real Estate, IFRIC 18 - Transfers of Assets from Customers and SIC-31 Revenue - Barter Transactions Involving Advertising Services. IFRS 15 is applicable for annual period beginning on or after January 1, 2018 (date modified with an amendment in September 2015 which extended the date of application by one year with respect to the date originally envisaged of January 1, 2017), and earlier application is permitted. During first-time adoption, IFRS 15 must be applied retrospectively. However, some simplifications (“practical expedients”) and an alternative approach (“cumulative effect approach”) which avoids restating comparative periods are permitted; in the latter case, the effects of the application of the new standard must be recognised in opening equity in the year of first- time application of IFRS 15. By means of the amendment in April 2016, the IASB clarified certain provisions and, at the same time, provided further simplifications, in order to reduce costs and complexity for those applying the new standard for the first time. The Group launched a project structured into three separate phases, in order to evaluate the potential impacts on the financial statements of the application of the new standard, and to be able to implement the necessary measures on information systems and the financial information internal control system. The first phase of the project identified, on the basis of IFRS 15, the relevant revenue streams and methods for their accounting. It mapped information systems, the internal organisation of administrative processes relating to the sales and distribution cycle and conducted a sample-based analysis of contracts relating to the main revenue streams. On conclusion of this phase, some cases were highlighted that could be impacted by the new provisions of IFRS

15. They refer primarily, but not exclusively, to the potential impacts on the representation of costs/revenues deriving from the evaluation of the role of principal/agent in relation to advertising activities. In the current state of the analysis, these still cannot be reasonably estimated, pending the analyses set out in the second phase of the project.

IFRS 9 - Financial Instruments

The standard, issued by the IASB in July 2014 and endorsed by the European Commission in November 2016, replaces IAS 39 - Financial Instruments: recognition and measurement. IFRS 9 introduces new provisions for the classification and measurement of financial instruments, including a new model for expected losses for the purpose of calculating impairment losses on financial assets, and new general provisions for hedge accounting. It also includes provisions for the recognition and derecognition of financial instruments in line with the current IAS 39. The new standard will be applicable as from January 1, 2018, and earlier application is permitted. IFRS 9 indicates, as a general rule, that the application must be prospective, although some exceptions are provided. The Group has still not completed its analysis of the potential impact of the application of IFRS 9 on the consolidated financial statements.

9. Accounting standards, amendments and interpretations not yet endorsed by the EU and applicable annual periods beginning on January 1, 2017

IFRS 14 - Regulatory Deferral Accounts

IFRS 14, issued by the IASB in January 2014, allows only first time adopters of IFRS to continue to recognise regulatory accounts on the basis of the accounting standards applied previously. To improve comparability with entities that already apply IFRS and do not account for such amounts, the standard requires the amounts recorded for regulatory accounting purposes to be presented separately from other items. The endorsement process by the European Union is suspended at present.

Amendment to IFRS 10 - Consolidated Financial Statements and IAS 28 - Investments in Associates and Joint Ventures

The amendment, issued by the IASB in September 2014, highlights the amendments that aim to address an inconsistency in accounting for the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that profit or loss is recognised in full when the transaction concerns a business. The IASB, with a further adjustment in December 2015, cancelled the previous date of first-time application set for January 1, 2016, deciding to determine it at a later date.

IFRS 16 – Leases

In January 2016, the IASB published “IFRS 16 – Leases”. The new standard provides a new definition of a lease and introduces a criterion based on the control (right of use) of an asset to distinguish leases from service contracts, identifying the following distinguishing factors: identification of the asset, right to replace the asset, right to obtain substantially all economic benefits deriving from use of the asset and the right to direct the use of the asset underlying the contract. The standard establishes a single model for the recognition and measurement of leases for the lessee, which provides for the recognition under assets of the asset subject to finance or operating lease, with a balancing entry in financial liabilities, also providing the possibility of not recognising contracts as leases that involve low-value assets and leases with a term equal to or less than 12 months. On the contrary, the standard does not include significant amendments for lessors. The standard will apply as of January 1, 2019, but earlier application is permitted, solely for companies that have applied IFRS 15 Revenue from Contracts with Customers early.

Amendment to IAS 12 - Recognition of deferred tax assets for unrealised losses

The goal of the amendment issued by the IASB in January 2016 is to provide further clarifications on the recognition of deferred tax assets arising from unrealised losses. The objective of the amendment is to specify the application of the principles already set out in IAS 12 to the case in question. In particular, the amendment clarify that the unrealised losses resulting from the circumstances described above give rise to deductible temporary differences regardless of whether the entity expects to recover the carrying amount of the assets by holding it until maturity or selling it. The amendments clarify that when estimating taxable profit of future periods, an entity can assume that an asset will be recovered for more than its carrying amount if that recovery is probable (e.g. determination of the debt instrument with collection of contractual flows). All these facts and circumstances must be considered when the entity performs this check. The IASB established January 1, 2017 as the date of application, but as the process endorsement by the European Union has yet to be completed, these amendments are still not applicable.

Amendment to IAS 7 - Statement of cash flows: Disclosure Initiative

In January 2016, the IASB issued an amendment to IAS 7 “Statement of Cash Flows”. The amendment aims to provide some clarifications to improve disclosures on financial liabilities. In particular, the amendment require entities to provide a disclosure that allows financial statements users to evaluate changes in liabilities arising from financing activities, including therein both changes arising from cash and non-cash changes. The amendments require entities to provide disclosures that allow financial statements users to understand the changes in liabilities (and any related assets) recognised in the statement of financial position, whose cash flows are or will, in the future, be recognised in the statement of cash flows as cash flows from (used in) financing activities. The IASB established January 1, 2017 as the date of application, but as the endorsement process by the European Union has yet to be completed, these amendments are still not applicable. Comparative information relating to previous years does not need to be presented.

Amendment to IFRS 2 - Classification and measurement of share-based payment transactions

In June 2016, the IASB published the amendments to IFRS 2 classification and measurement of share-based payment transactions, which aim to clarify the accounting of some types of share-based payment transactions. The amendments will apply as of January 1, 2018. However, earlier application is permitted.

Amendment to standard IFRS 4 - application of IFRS 9 Financial instruments and IFRS 4 Insurance Contracts

In September 2016, the IASB published the document “Application of IFRS 9 Financial instruments and IFRS 4 Insurance Contracts”. The amendment aim to address concerns arising from implementing the new IFRS 9, before implementing the replacement standard that the IASB is developing for IFRS 4. These concerns include temporary volatility in results reported in the financial statements. The amendments introduce two approaches: an overlay approach and a temporary exemption. The amendments introduced will allow:  all companies that issue insurance contracts the option to recognise in other comprehensive income, rather than profit or loss, the effects of the volatility that could arise when an entity applies IFRS 9 before the new IFRS 4 is applied (“overlay approach”).  companies whose activities are predominantly connected with insurance an optional temporary exemption from applying IFRS 9 until 2021. The entities that defer the application of IFRS 9 will continue to apply the existing standard IAS 39 (“temporary exemption”).

Improvements to IFRSs: 2014-2016 Cycle

In December 2016, the IASB published the document “Improvements to IFRS: 2014-2016 Cycle”, the main amendments regard:

 IFRS 1 – First-time Adoption of International Financial Reporting Standards - The amendments eliminate some exemptions set forth in IFRS 1, as the benefit of said exemptions is now believed to have been superseded. The amendments are applicable to annual period beginning on or after January 1, 2018.  IFRS 12 – Disclosure of Interests in Other Entities - The amendment clarifies the scope of application of IFRS 12, specifying that the information required by the standard also applies to investments classified as held for sale, held for distribution to shareholders or as discontinued operations in accordance with IFRS 5. The amendment aims to standardise the disclosures required by IFRS 5 and IFRS 12. The amendments are applicable to annual periods beginning on or after January 1, 2017.  IAS 28 – Investments in Associates and Joint Ventures - The amendment clarifies that a venture capital organisation or other qualifying entity may elect to measure investments in associates or joint ventures at FVTPL (rather than using the equity method), for each individual investment at the moment of initial recognition. The amendments are applicable to annual periods beginning on or after January 1, 2018.

IFRIC 22 Foreign Currency Transactions and Advance Consideration

In December 2016, the IASB published the document “IFRIC 22 Foreign Currency Transactions and Advance Consideration” in order to provide entities with guidelines on how to determine the date of a transaction, and consequently, the exchange rate to use when reporting transactions that are denominated in a foreign currency in which the payment is made or received in advance.

The amendments are applicable to annual periods beginning on or after January 1, 2018.

Amendment to IAS 40 - Investment Property: Transfers of Investment Property

In December 2016, the IASB published the document “Amendment to IAS 40 - Investment Property: Transfers of Investment Property”: The amendments provide a clarification on the transfers of an asset to, or from, investment property. Based on these amendments, an entity must reclassify an asset to, or from, investment property solely when the asset meets or ceases to meet the definition of “investment property” and there has been a clear change in use of the asset. This change must be traced back to a specific event that occurred and must not, therefore, be limited to a mere change in management's intention to change the use. The amendments are applicable to annual periods beginning on or after January 1, 2018, and early application is permitted only in the case in which the values can be estimated.

IFRS 17 - Insurance Contracts

In May 2017, the IASB published IFRS 17 - Insurance Contracts, which replaces IFRS 4, issued in 2004. The standard aims to improve investors’ understanding of exposure to risk, profitability and the financial position of insurers, and requires all insurance contracts to be accounted for consistently, resolving the comparison problems created by IFRS 4.

The standard is applicable to annual periods beginning on January 1, 2021, but earlier application is permitted.

IFRIC 23 - Uncertainty over Income Tax Treatments

In June 2017, the IASB published the interpretation IFRIC 23 - Uncertainty over Income Tax Treatments. The interpretation clarifies the application of the recognition and measurement requirements established in IAS 12 Income Taxes, when there is uncertainty over income tax treatments.

The amendments are applicable to annual periods beginning on or after January 1, 2019.

10. Management of capital and financial risks

The Group manages its capital structure and financial risks in accordance with the asset structure. The Group's objective is to maintain a suitable credit rating and capital ratio levels over time which are consistent with its asset structure, taking into consideration current trends in bank credit supply in the Italian economy, which remains stiff as it still represents a high percentage of sources of corporate funding with respect to other countries, where the capital markets play a significant role in funding. No changes were made to the management objectives, policies and procedures during the first half of 2017 with respect to the year ended December 31, 2016. The Loan Agreement signed in 2013 was renegotiated in June 2016. The Agreement was amended, in particular, to extend its final maturity from June 30, 2018 to December 31, 2019 and also defines default financial covenants (at group consolidated financial statements level), with reference to NFD, the ratio between NFD and EBITDA before non-recurring expense (limited to € 15 million) and equity. The first covenant is checked both annually and every six months (in this case, compliance with a threshold value plus € 25 million compared to the figure in the previous December), while the other two covenants cited above are verified only annually, on December 31. For additional details on these covenants, please refer to the section “Additional information required by CONSOB pursuant to Art. 114, paragraph 5 of Italian Legislative Decree no. 58/1998 of May 27, 2013” of this Half-year Report. On July 4, 2017 the Company reached an agreement with Intesa San Paolo for a term-sheet for the organisation and direct underwriting of a loan of €332 million, targeted at the full refinancing of the current loan agreement. The main terms and conditions in the term-sheet (which must be followed by the formalisation of a loan agreement) are, inter alia, an expiry extended from December 31, 2019 to December 31, 2022, the provision of a single covenant represented by the Leverage Ratio (Net financial debt/EBITDA ratio) and verified annually, an annual interest rate equal to the sum of the reference Euribor and a variable margin depending on the Leverage Ratio, more favourable for the Company with respect to the margins set forth in the current Loan Agreement.

As concerns financial risks, the RCS Group is exposed to market risk (such as interest rate risk, and to a lesser extent currency risk, while it is not exposed to price risk), liquidity risk and credit risk. The Group constantly monitors financial risks connected with its businesses. The various financial risks to which the RCS Group is exposed are commented on below:

Interest rate risk

Interest rate risk refers to the risk of higher financial expense because of an adverse, unexpected fluctuation in interest rates. The Group is exposed to this risk in relation to its floating-rate financial liabilities. The Group uses derivatives to manage exposure to interest rate risk; the contracts currently in place are Interest Rate Swaps (IRS) and Interest Rate Caps. At June 30, 2017, around 34% of loans and borrowings, including finance lease liabilities, were at a contractually fixed rate or floating rate transformed in a fixed rate via interest rate swaps (IRS) or hedged by interest rate caps (at December 31, 2016, this stood at 43% and around 44% at June 30, 2016).

Currency risk

Currency risk can be defined as the sum of negative effects on assets or liabilities in foreign currency caused by changes in exchange rates. Although the RCS Group has an international presence, it does not have a large exposure to currency risk because the euro is the functional currency in its principal areas of business, the currency in which business cash flows are chiefly denominated. The exposure to currency risk is limited to some trade positions in US dollars, Swiss francs and United Arab Emirates dirhams of RCS MediaGroup S.p.A. and RCS Sport and Events DMCC.

Liquidity risk

Liquidity risk can arise in relation to difficulties in obtaining financing in due time to support operating activities, also possibly for the purpose of repaying maturing loans. The Group manages liquidity on a centralised basis (using cash management systems for the main subsidiaries) in compliance with the objectives and policies defined by management. The objective continues to be that of maintaining a balance between continuity of financing and flexibility of management by: - investing any available cash in short-term transactions (usually lasting between one and three months) that can be easily and quickly unwound, such as money-market instruments; - using different types of source of financing, both short-term as well as medium/long-term.

Credit risk

Credit risk can be defined as the possibility that one party to a financial instrument will cause a financial loss by failing to discharge an obligation. Trade receivables are managed by the Group's individual companies in compliance with the Group's financial objectives, agreed commercial strategies and operating procedures, which prevent products or services from being sold to customers without an adequate credit rating or collateral. New customers and their credit rating are generally evaluated using an automated scoring system. In addition, receivables are constantly controlled during the year with the aim of reducing late payments and limiting any significant losses. The Group has adopted a rigorous customer classification criterion to permit careful monitoring of situations of potential risk. Under the adopted procedures, individual impairment losses are recognised on large, individual trade positions for which a significant payment delay has been reported or which are potentially in default. A worsening in the credit rating determines a specific impairment loss on the receivable, even if the same is not past due at the analysis reference date. The applicable impairment percentage is established in accordance with the past due age range, and periodically reviewed to take account of credit ratings given by the Group to individual counterparties. The level of hedging of the allowance for impairment at June 30, 2017, with respect to total trade receivables and compared with the figure at June 30, 2016, was stable (14.3%), upon conclusion of the process of evaluation of the individual credit positions. Changes recorded in trade receivables at June 30, 2017 did not significantly alter credit risk with respect to December 31, 2016. The decrease in the number of cases of new customers moving to the dispute phase, owing to stability of the debt recovery actions initiated, involved lower credit risk hedging requirements. As far as loans are concerned, investments of surplus cash and derivative transactions are carried out with highly reputable banking counterparties.

Fair value of financial instruments

In the first six months of 2017, there were no reclassifications between the various levels of the fair value hierarchy used to measure the fair value of financial instruments at December 31, 2016.

The hierarchical levels are as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); Level 3: inputs for the asset or liability which are not based on observable market data.

At June 30, 2017 and December 31, 2016, assets and liabilities have been classified in accordance with the fair value hierarchy as follows.

Hierarchy of fair value measurement for categories of financial instruments at June 30, 2017 Note level 1 level 2 level 3 Total FINANCIAL ASSETS Financial assets at fair value through profit or loss Held-for-trading securities - - - - Non-hedging derivatives - - - - Available-for-sale financial assets Equity investments 16 - - 5.8 5.8 He dgi ng de ri vati ve s - - - - Total - - 5.8 5.8

FINANCIAL LIABILITIES Financial liabilities at fair value through profit or loss Non-hedging derivatives - - - - He dgi ng de ri vati ve s 20 - 2.8 - 2.8 Total - 2.8 - 2.8

Hierarchy of fair value measurement for categories of financial instruments at December 31, 2016 Note level 1 level 2 level 3 Total FINANCIAL ASSETS Financial assets at fair value through profit or loss Held-for-trading securities - - - - Non-hedging derivatives - - - - Available-for-sale financial assets Equity investments 16 - - 5.8 5.8 He dgi ng de ri vati ve s - - - - Total - - 5.8 5.8

FINANCIAL LIABILITIES Financial liabilities at fair value through profit or loss Non-hedging derivatives - - - - He dgi ng de ri vati ve s 20 - 5.1 - 5.1 Total - 5.1 - 5.1

In the first half of 2017, there were no changes in the items classified in Level 3.

11. Segment reporting

Following the positive conclusion of the public purchase and exchange offer on the shares of RCS MediaGroup S.p.A. by Cairo Communication S.p.A. and the resulting change in control of the Company and the appointment of a new Board of Directors of RCS MediaGroup S.p.A., in the last four-month period of 2016, a process was launched for the review of the Group structure to ensure it better represented the business and allowed the effective adoption of judgments at the highest operating decision-making level, focused on the resources to be allocated to the various sectors and the subsequent evaluation of the results obtained.

Based on the fact that the definition of said operating structure and the subsequent identification of operating segments is still in the process of being evaluated, starting from 2017, a disclosure was adopted consistent with the internal provisional and final reporting currently adopted.

The segment statement of financial position figures, in particular those for total assets for each segment subject to disclosure, are not currently periodically provided to the highest operating decision-making level. Therefore, these details are not provided in these notes in accordance with the amendment to IFRS 8 - Operating segments, in force from January 1, 2010. The accounting policies used for presenting the figures of reportable segments are consistent with those adopted for preparing the consolidated financial statements.

Transactions between the different segments mostly refer to the exchange of goods, the provision of services and the provision and use of funds. All such transactions are conducted on an arm’s length basis, in accordance with the quality of the goods and services provided. In application of IFRS 8, the following tables present information by operating segment. The comparative income statement figures for the corresponding period of 2016 were revised to align them with the new disclosure and allow a homogeneous comparison. The operating segments at June 30, 2017 are therefore: Newspapers Italy, Magazines Italy, Advertising and Sport, Unidad Editorial and Other Corporate activities. In particular, the types of products and services from which each area subject to disclosure obtains revenue, are detailed in this Half-year Report, in the section dedicated to comments on the economic trend of the business segments, in the paragraphs “Segment profile”. The Group used a combination of factors in identifying the areas subject to disclosure, including the goods and services offered by operating the segment and the geographical area.

Information by operating segment

Other reconciliation (€/millions) Operating segments items Other First half 2017 Newspapers Magazines Advertising Unidad Corporate Eliminations / Italy Italy and Sport Editorial activities adjustments TOTAL Publishing revenue 106.1 13.4 0.0 53.8 - (0.5) 172.8 Advertising revenue 73.9 23.7 136.9 67.9 0.3 (90.2) 212.5 Other publishing revenue 8.2 8.0 45.4 25.5 12.1 (12.8) 86.4 Segment revenue 188.2 45.1 182.3 147.2 12.4 (103.5) 471.7 Intersegment revenue (70.6) (21.2) (0.2) (1.1) (10.4) Revenue 117.6 23.9 182.1 146.1 2.0 471.7 Segment operating profit (loss) 27.4 5.2 22.5 7.2 (18.4) 0.1 44.0 - Share of profits (losses) of equity-accounted investees 0.3 0.0 0.0 0.1 0.0 0.4 Net financial expense (13.0) Other gains on financial assets/liabilities, net 1.2 - of which dividends from non-current equity investments 0.0 Profit before tax 32.2 Income taxes (8.2) Profit from continuing operations 24.0 Profit (loss) from assets held for sale and discontinued operations 0.0 Profit for the period 24.0 Profit (loss) attributable to non-controlling interests 0.0 Profit attributable to owners of the parent 24.0

Other reconciliation (€/millions) Operating segments items Other First half 2016 Newspapers Magazines Advertising Unidad Corporate Eliminations / Italy Italy and Sport Editorial activities adjustments TOTAL Publishing revenue 117.2 14.0 0.0 62.4 0.4 (0.7) 193.3 Advertising revenue 78.4 24.9 150.3 75.8 0.3 (93.7) 236.0 Other publishing revenue 11.4 9.8 31.1 21.5 18.4 (17.4) 74.8 Segment revenue 207.0 48.7 181.4 159.7 19.1 (111.8) 504.1 Intersegment revenue (74.0) (21.3) (0.2) (0.7) (15.6) Revenue 133.0 27.4 181.2 159.0 3.5 504.1 Segment operating profit (loss) 20.7 0.1 10.4 0.8 (25.5) (0.2) 6.3 - Share of profits (losses) of equity-accounted investees 0.8 0.1 0.0 0.4 0.0 1.3 Net financial expense (16.1) Other gains on financial assets/liabilities, net 0.8 - of which dividends from non-current equity investments 0.0 Loss before tax (9.0) Income taxes (1.5) Loss from continuing operations (10.5) Profit from assets held for sale and discontinued operations 8.4 Loss for the period (2.1) Profit (loss) attributable to non-controlling interests 0.0 Loss attributable to owners of the parent (2.1)

Information about major customers No revenue was earned in the first half of 2017 from third parties, excluding transactions with associates and joint ventures, deriving from transactions with a single customer, that amounted to more than 10% of the Group's total revenue.

12. Related party transactions

As required by CONSOB Communication pursuant to Article 114, paragraph 5 of Italian Legislative Decree No. 58/98, protocol number 13046378 of May 27, 2013, transactions with the related parties of the RCS Group are reported below.

Firstly, with effect from July 2016 the ultimate parent of the Group is U.T. Communications S.p.A., the de facto parent of the investee Cairo Communication S.p.A., which became, in turn, the direct controlling entity of RCS MediaGroup S.p.A.. At June 30, 2017, the interest in RCS MediaGroup S.p.A. share capital held by Cairo Communication S.p.A. was 59.693% (59.831% if the percentage held by U.T. Communications S.p.A. at June 30, 2017 is also included - Source: Consob). This being said, the following were identified as related parties.  the direct and indirect controlling entities of RCS MediaGroup S.p.A., their subsidiaries, joint ventures and their associates;  controlled entities (whose transactions are eliminated in the consolidation process), jointly controlled entities and associates of RCS MediaGroup S.p.A.;  in addition, based on the Related Party Procedure adopted by the RCS Group, as better described below, qualifying as related parties are all shareholders (and related corporate groups comprising controlling and controlled entities (direct and indirect), and jointly controlled companies (direct and indirect) holding an interest in RCS with voting rights of more than 3%, excluding intermediaries responsible for asset management activities, where the independence requirements of the Issuer Regulation are met;  key management personnel and their close family members.

As regards the Regulations approved by CONSOB with resolution no. 17221 of March 12, 2010 and subsequent amendments, on November 10, 2010, RCS MediaGroup S.p.A. adopted a related party transaction procedure covering authorisations and communication with the market and CONSOB. This procedure was subject to certain revisions effective as from January 1, 2014 and subsequently, further revisions became effective as from October 1, 2015. A copy of this edition of the Procedure is published in the “Governance” section of the Company’s website. This procedure, as the previous provisions, has also been described in the Report on Corporate Governance and Ownership Structure. In this regard, in consideration of the provisions of said Procedure, in addition to the more significant transactions indicated above, several less significant transactions were subject to the prior opinion of the Related Party Transactions Committee provided for therein. Pursuant to this Procedure, shareholders and the associated corporate groups (legal entities in the form of parents, subsidiaries or jointly controlled companies) described in the third point of the above list, were also identified as related parties, in addition to the parties pursuant to annex 1 of the aforementioned CONSOB resolution no. 17221/2010, on a voluntary basis.

The following table shows the amount and proportion of related party transactions and balances included in each relevant financial statement caption. Intragroup transactions eliminated on consolidation are excluded.

Non-current Current loans Current loan loans and Financial transactions Tr a de and borrowings Other current and financial borrowings and Trade payables Commitments (€/millions) receivables and financial liabilities assets financial liabilities liabilities Parents 0.2 - - - 0.1 - Jointly controlled companies 20.7 3.8 - - 2.2 - Associates 0.3 0.1 - 2.9 6.0 - 0.9 Supplementary pension fund for executives ------Other group companies (1) 2.3 - 11.5 2.3 0.9 - - Other related parties (2) - - - - - 0.8 2.7 To t a l 2 3 . 5 3.9 11.5 5.2 9.2 0.8 3.6 Total RCS Group 256.4 4.4 282.8 91.0 263.6 84.6 74.6 Related party % of the RCS Group total 9.2% 88.6% 4.1% 5.7% 3.5% 0.9% 4.8%

Other Fi n an ci al Trade transactions Raw materials Personnel operating Revenue income and (€/millions) and services expense expense and expense income Parents - (0.1) - 0.1 - Jointly controlled companies 103.3 (5.5) - 0.6 - Associates 1.0 (15.0) - - - Supplementary pension fund for executives - - (0.2) - - Other group companies (1) 2.1 (0.7) - 0.2 (0.8) Other related parties (2) - (1.2) (1.7) - - To t a l 1 0 6 . 4 (22.5) (1.9) 0.9 (0.8) T otal RCS Group 471.7 (265.0) (131.7) (1.6) (13.0) n.s. Related party % of the RCS Group total 22.6% 8.5% 1.4% 6.2%

(1) Includes shareholders and the associated corporate groups (legal entities in the form of parents, subsidiaries or jointly controlled companies) that have an interest of more than 3% in RCS MediaGroup S.p.A. with voting rights, as well as the subsidiaries, associates and jointly controlled companies of Cairo Communication S.p.A. and U.T. Communication S.p.A.. (2) Refers mainly to transactions with key management personnel and their close family members

Net change in loans and Net financial income Statement of cash flows Changes in working capital borrowings and other (including dividend income Net interest received (€/millions) financial assets from AFS) Related parties (1 3 .3 ) (11.9) 0.8 (0.8) Reported total (42.2) 5.5 12.9 (13.5)

Transactions with parents, associates and jointly controlled companies mostly refer to the exchange of goods, the provision of services, the provision and use of funds, as well as tax-related transactions. All such transactions are conducted on an arm's length basis, in accordance with the quality of the goods and services provided.

The transactions with parents include other operating income of €0.1 million, consumption of materials and services of €0.1 million, trade receivables for €0.2 million and, lastly, trade payables of €0.1 million. They mainly concern the sale and purchase of advertising spaces, revenues for the charge-backs of RCS personnel that perform operating activities at the Cairo Group and costs for the purchase of market surveys. Transactions with jointly controlled companies refer to m-dis Distribuzione Media S.p.A., in respect of which the Group earned €103.3 million in revenue, incurred €5.5 million in costs, earned €0.6 million in operating income and reported €20.7 million in trade receivables, €3.8 million in current loan assets and financial assets and €2.2 million in trade payables.

The most significant trade transactions between associates concerned the Bermont group companies, responsible for the printing of Unidad Editorial’s newspapers (total of: €5.5 million in trade payables, €0.2 million in trade receivables, €0.9 million in revenue and €14.5 million in costs). The financial transactions with “other group companies” relate primarily to loan transactions with companies in the Mediobanca Group (€11.5 million in Non-current loans and borrowings and financial liabilities and €2.3 million in current loans and borrowings and financial liabilities). The trade transactions with “other group companies” mainly involve revenue of €2.1 million, costs of €0.7 million, as well as net financial expense of €0.8 million. Revenue was generated mainly with companies in the Della Valle Group and Cairo Group, while the costs incurred pertain mainly to the companies in the Cairo Group. Revenue mainly refers to the sale of television rights and advertising spaces, as well as revenue for the holding of events and charge-backs of RCS personnel that perform operating activities at the Cairo Group; the costs incurred primarily concern the purchase of advertising spaces. Financial expense refers to Mediobanca – Banca di Credito Finanziario S.p.A. Group companies and refers to financial transactions relating to loan and derivative operations.

*** There are arm’s length derivative contracts with a total nominal amount of around €28.8 million subscribed for ordinary operating requirements with the Mediobanca – Banca di Credito Finanziario S.p.A. Group.

Group tax consolidation for IRES purposes. During the first six months of 2017, RCS MediaGroup S.p.A. continued to file for tax on a group basis, as permitted by Italian Legislative Decree no. 344 dated December 12, 2003 in order to achieve tax savings by calculating tax on a single tax base, with a consequent immediate offset of tax assets and tax liabilities for the period. Intragroup transactions deriving from the group tax consolidation are based on the objectives of fairness and neutrality. The companies participating in group tax consolidation where the consolidating company is RCS MediaGroup S.p.A. for the tax year ended at December 31, 2016 are: Trovolavoro S.r.l., RCS Sport S.p.A., RCS Produzioni Padova S.p.A., Sfera Service S.r.l., Blei S.r.l. in liquidation, RCS Investimenti S.p.A., RCS Edizioni Locali S.r.l., RCS Produzioni S.p.A., Editoriale Veneto S.r.l., Editoriale Fiorentina S.r.l., RCS Digital Ventures S.r.l., Digicast S.p.A., Digital Factory S.r.l., RCS Produzioni Milano S.p.A., RCS Gaming S.r.l., GFT NET S.r.l. in liquidation, Canali Digitali S.r.l. in liquidation, Sailing Channel S.r.l. in liquidation and Seasons S.r.l. in liquidation.

Group tax consolidation for VAT purposes. In the first half of 2017, RCS MediaGroup S.p.A. continued to make use of the rules allowing the RCS Group filing of VAT returns with a payable balance of €4.1 million. RCS MediaGroup S.p.A. transferred net tax liabilities totalling €8.6 million to the RCS Group VAT consolidation during the first six months of 2017.

As regards key management personnel, please refer to the list in Section I of the Remuneration Report approved by the Shareholders’ Meeting of April 27, 2017 and published on the website www.rcsmediagroup.it.

Information is provided below in aggregate form concerning the fees for the key management personnel identified:

(€/millions) Other current S ervice costs Personnel expense liabilities Board of Directors (1.1) - 0.5 Board of Statutory Auditors (0.1) - 0.2 Key management personnel 0.0 (1.7) 0.1 Total related parties (1.2) (1.7) 0.8 T otal RCS Group (265.0) (131.7) 84.6 Related party % of the RCS Group total 0.5% 1.3% 0.9%

"Personnel expense" includes €1.7 million in remuneration paid to key management personnel. Personnel expense referring to related parties accounted for 1.3% of total personnel expense.

There are also commitments to key management personnel amounting to €2.7 million and to other related parties amounting to €0.9 million. Furthermore, specifically as regards the additional commitments to the key management personnel of RCS MediaGroup S.p.A., please refer to the Remuneration Report (Section II - First Part) published on the website www.rcsmediagroup.it.

Related parties of RCS MediaGroup S.p.A.

The following table shows the amount and proportion of related party transactions and balances included in each relevant heading of the statement of financial position and income statement.

Statement of financial position - assets

Equi ty Other Current tax Current loan investments at Trade receivables receivables and assets assets cost current assets Parents - 0.2 - - - Subsidiaries 1,135.7 10.7 0.2 11.7 40.9 Associates 8.1 20.7 - - 3.9 Other group companies - 0.6 - - - Sub-holdings and their parents - 1.2 - - - Total related parties 1,143.8 33.4 0.2 11.7 44.8 Reported total 1,143.8 151.6 27.1 16.9 44.8 % of the reported total 100.00% 22.03% 0.74% 69.23% 100.00%

Statement of financial position - liabilities

Non-current Financial liabilities Other non-current Current loans Current tax Other current loans and recognised for Trade payables Commitments liabilities and borrowings liabilities liabilities borrowings de ri vati ve s Parent - - - - 0.1 - - Subsidiaries - - 1.1 540.6 5.8 10.8 1.6 17.5 Associates - - - 2.9 - 2.1 - - Other group companies - - - - - 0.9 - - Sub-holdings and their parents 11.5 0.6 - 1.7 - - - - Other related parties (1) ------0.8 - Total related parties 11.5 0.6 1.1 545.2 5.8 13.9 2.4 17.5 Reported total 278.8 2.8 2.0 600.7 6.3 154.0 58.5 66.3 % of the reported total 4.12% 21.43% 55.00% 90.76% 92.06% 9.03% 4.10% 26.40% (1) Refers mainly to transactions with key management personnel and their close family members, as specified below.

Income statement

Other gains (losses) Raw materials Personnel Other operating Financial Financial Revenue on financial and services expense income income expense assets/liabilities Parents - ( 0.1) - 0.1 - - - Subsidiaries 4.5 ( 30.7) - 3.9 0.7 ( 5.4) 17.7 Associates 103.2 ( 5.6) - 0.6 - - 1.7 Other group companies 0.4 ( 0.7) - 0.1 - - - Supplementary pension fund for executives - ( 0.2) - - - - Sub-holdings and their parents 1.2 - - - - ( 0.8) - Other related parties (1) - ( 1.2) ( 1.2) - - - - Total related parties 109.3 ( 38.3) ( 1.4) 4.7 0.7 ( 6.2) 19.4 Reported total 245.8 ( 152.2) ( 77.1) 11.2 1.3 ( 15.6) 20.6 % of the reported total 44.47% 25.16% 1.82% 41.96% 53.85% 39.74% 94.17% (1) Refers mainly to transactions with key management personnel and their close family members, as specified below.

Transactions between RCS MediaGroup S.p.A. and related parties primarily regard the provision of services, as already commented on in the note regarding the RCS Group, which should be referred to for a more detailed analysis. In addition, it executed transactions with subsidiaries (eliminated on consolidation), primarily regarding the exchange of goods (mostly the purchase of advertising space), the provision of services (largely administrative, IT, financial, legal/corporate and tax, relating to the centralisation of these functions within the Other Corporate activities area, as well as processing and printing services), the provision and use of funds, tax-related transactions as well as trade transactions relating to the lease of offices space and operations areas.

Please see above for key management personnel.

The required information on their ordinary remuneration in the various forms paid is shown below.

Service Other current Personnel expense costs liabilities Board of Directors - fees 1.1 - 0.5 Board of Statutory Auditors - fees 0.1 - 0.2 Chief Executive Officer, Chief Operating Officer, Key management personnel, -1.20.1 Manager in charge of Financial Reporting - other remuneration Total related parties 1.2 1.2 0.8 Reported total 96.5 77.1 58.5 % of the reported total 1.24% 1.56% 1.37%

13. Non-recurring income (expense) At June 30, 2017, no non-recurring income and expense or atypical transactions were recorded. In the first half of 2016, net non-recurring expense totalled €6.3 million, and there were no atypical transactions.

14. Property, plant and equipment

This item totalled €80 million, down €7 million compared to December 31, 2016. The decreases include €7.4 million in depreciation, only partly offset by increases deriving from new acquisitions of €0.4 million. Investments relate to the Pessano printing facilities (totalling €0.2 million) and the purchase of other assets (€0.2 million), mainly for IT and air conditioning equipment.

15. Intangible assets

Changes in intangible assets at June 30, 2017 are summarised below:

FINITE USEFUL LIFE INDEFINITE USEFUL LIFE DESCRIPTION Intellectual Concessions, Assets under Other Concessions, Goodwill Goodwill TO TA L property licenses, development intangible licenses, arising on rights trademarks and advances assets trademarks consolidation and similar and similar rights rights NET BALANCE AT DEC-31-2016 3.0 228.9 0.5 0.0 123.2 25.6 13.4 394.6 Additions 1.6 2.4 3.5 7.5 Additions - internally generated Decreases Amortisation (1.7) (15.6) (17.3) Impairment losses/Reversals of impairment losses Exchange rate differences Change in scope of consolidation Other movements 0.2 (0.2) NET BALANCE AT JUN-30-2017 2.9 215.9 3.8 0.0 123.2 25.6 13.4 384.8

Intangible assets amounted to €384.8 million, marking a decrease of €9.8 million over December 31, 2016. This change reflects amortisation of €17.3 million, partially offset by new investments of €7.5 million. The latter was realised, for €2.5 million, by the subsidiary Digicast S.p.A., operating in the satellite television sector with the channels Lei, Dove and Caccia&Pesca for the purchase of television rights and executive production rights. An increase of €2.9 million (of which €1.7 million in the process of being realised) was also recorded by investments in the corporate sector of RCS MediaGroup S.p.A. and, in particular, by the IT department, primarily for the purchase of software licences in support of the various business units as well as for

developments on Group websites. Investments in the period by the subsidiary Unidad Editorial totalled €1.8 million, of which €1.5 million refers to Assets under development for IT projects. The investments made by the subsidiary Trovolavoro S.r.l. in the recruiting software platform also rose by €0.2 million. Intangible assets include goodwill of €39 million, and consolidation differences recorded during the acquisition of companies and allocated to intangible assets, particularly newspapers, in the course of the purchase price allocation, totalling €313 million (of which 39.4% with an indefinite life). The assets of the Direct cash-generating unit were merged with the assets of Sfera’s cash-generating unit. The remaining assets of the cash-generating unit did not undergo any changes with respect to December 31, 2016. The cash-generating units to which goodwill and intangible assets with an indefinite useful life have been allocated are as follows:

Goodwill arising on consolidation Goodwill Concessions, licenses and trademarks Geographic areas CGU Jun-30-2017 Dec-31-2016 Jun-30-2017 Dec-31-2016 Jun-30-2017 Dec-31-2016 Italy RCS Produzioni Padova 2.4 2.4 Ed. del Mezzogiorno 2.1 2.1 Sfera e Direct 23.2 23.2 RCS Digital Ventures 1.9 1.9 Spain Unidad Editorial 9.4 9.4 123.2 123.2

Total 13.4 13.4 25.6 25.6 123.2 123.2

The search for possible indicators of impairment regarded the main assumptions used to calculate the value in use at December 31, 2016. Accordingly, management analysed the trend in the financial figures for the year, to evaluate any repercussions on the provisional data used in the impairment testing at December 31, 2016, and analysed the trend in rates to evaluate the repercussions of said trend on the estimate of the discount rate (WACC) applied to expected cash flows.

Please see the notes to the Consolidated financial statements at December 31, 2016 for full details on the calculation of the WACC.

No impairment indicators emerged on conclusion of this analysis.

16. Financial assets and deferred tax assets

Jun-30-2017 Dec-31-2016 Change Available-for-sale financial assets 5.8 5.8 - Investments in associates and joint ventures 46.4 47.7 (1.3) Loan assets and other non-current assets 19.5 19.7 (0.2) Financial assets recognised for derivatives --- Total 71.7 73.2 (1.5) Deferred tax assets 113.1 119.1 (6.0) Total 184.8 192.3 (7.5)

Available-for-sale financial assets did not present any changes with respect to December 31, 2016. Available-for-sale financial assets are generally measured at fair value. Assets for which no fair value is available are recognised at cost, net of impairment losses, if any.

Equity-accounted investees amounted to €46.4 million, down €1.3 million with respect to December 31, 2016, owing to the distribution of dividends (€1.7 million) by m-dis Distribuzione Media S.p.A. and its subsidiaries. This decrease was partially offset by the positive results of investees of €0.4 million.

The carrying amounts relating to the investments in joint ventures and associates are provided below.

Investments in Investments in Total joint ventures associates Balance at Dec-31-2016 3.3 44.4 47.7 Share of profit 0.1 0.3 0.4 Dividends distributed (1.4) (0.3) (1.7) Balance at Jun-30-2017 2.0 44.4 46.4

Investments in joint ventures, totalling €2 million (€3.3 million at December 31, 2016), were accounted for at equity and include primarily the investment in m-dis Distribuzione Media S.p.A.. Investments in associates totalled €44.4 million (€44.4 million at December 31, 2016) were accounted for using the equity method and mainly include the equity investment in Corporacion Bermont.

Loan assets and other non-current assets amounted to €19.5 million at June 30, 2017, essentially stable. They mainly include loan assets from printing centres and non-current assets from the tax authorities.

Deferred tax assets decreased by €6 million, originating primarily from the use during the period of the positive result of the deferred tax assets allocated in previous years on tax losses.

17. Inventories Inventories amounted to €16.7 million at June 30, 2017, marking a decrease of €0.7 million compared to December 31, 2016, attributable to the paper warehouse (-€0.3 million), as well as work in progress (-€0.4 million). The decrease in the paper warehouse originated from the fall in the paper stocks of Unidad Editorial (down €1 million), partially offset by the increase in the stocks of Newspapers Italy (up €0.7 million) as a result of new publishing initiatives.

18. Trade receivables Trade receivables amounted to €256.4 million at June 30, 2017, essentially stable compared to December 31, 2016 (up €0.1 million). Trade receivables of the Advertising and Sport area recorded growth of €2 million, marking an increase of €25.2 million for the Sport segment, attributable to the seasonal nature of sporting events organised in Italy and abroad, partially offset by the drop in the trade receivables of the Group advertising concessionaire, also as a result of the termination of advertising contracts with third party publishers. The growth in the trade receivables of the Newspapers Italy, Magazines Italy and Other Corporate activities segments totalling €2.5 million was more than offset by the decrease of €4.4 million deriving from Unidad Editorial.

19. Other receivables and current assets Other receivables and current assets amounted to €35.9 million at June 30, 2017, falling by €1.8 million compared to December 31, 2016. The decrease in Agent advances (-€5 million) mainly relates to the Advertising and Sport segment as a result of the corresponding drop in payables to agents and tax assets (-€0.7 million), in contrast to the increase in advances to suppliers (+€2.3 million), mainly relating to the organisation of the Giro d’Italia by RCS Sport, as well as prepayments (+€1.7 million).

20. Total net financial debt The net financial debt was €363.2 million at June 30, 2017 compared to net financial debt of €366.1 million at December 2016.

Details of the net financial debt are provided below at carrying amount and fair value.

Carrying amount Fair Value Jun-30-2017 Dec-31-2016 Jun-30-2017 Dec-31-2016 Financial assets Cash and cash equivalents 6.2 18.7 6.2 18.7 Other financial assets 3.9 0.1 3.9 0.1 Loan assets 0.5 0.5 0.5 0.5 Held-for-trading securities Total FINANCIAL ASSETS 10.6 19.3 10.6 19.3 Financial liabilities Current bank loans and overdrafts (79.9) (88.3) (79.9) (88.3) Other financial liabilities (2.9) (11.1) (2.9) (11.1) Loans: Fixed rate loans (0.8) (0.9) (0.8) (0.9) Non-current floating rate loans (275.4) (265.2) (275.4) (265.2) Current and non-current financial liabilities recognised for derivatives (2.8) (5.1) (2.8) (5.1) Floating rate finance lease payables (12.0) (14.8) (11.5) (14.1) Fixed rate finance lease payables Total FINANCIAL LIABILITIES (373.8) (385.4) (373.3) (384.7) Net financial debt (363.2) (366.1) (362.7) (365.4)

The improvement in net financial debt of €2.9 million is attributable to the highly positive contribution of ordinary operations (including the collection of dividends), only partially offset by outlays for non-recurring expense accrued in previous years and outflows for capital expenditure.

Note that the Company has a loan agreement in place, originally signed on June 14, 2013 and that the Company and the Financing Banks signed an Agreement on June 16, 2016 for the Restructuring of the Loan, composed of 2 credit lines for a total of €352 million, reduced to €332 million at June 30, 2017.

On July 4, 2017, the Company reached an agreement with Intesa San Paolo for a term-sheet for the organisation and direct underwriting of a loan of €332 million expiring on December 31, 2022, targeted at the full refinancing of the current loan agreement. For more details on the main terms and conditions in the term sheet, please refer to the section “Additional information required by CONSOB pursuant to Art. 114, paragraph 5 of Italian Legislative Decree no. 58/1998 of May 27, 2013” of this Half-year Report.

21. Employee benefits and provisions for risks and charges

These amounted to €90.3 million, marking a net decrease of €8.4 million over December 31, 2016.

Reclassifications Other provisions for Financial Dec-31-2016 Provisions Releases Utilisations Discounting and other Jun-30-2017 personnel expense expense movements from current from actuarial services calculations Employee benefits 40.2 1.0 (0.8) 0.3 (1.1) 39.6 Non-current portion of provisions for risks and charges 13.9 2.0 (0.8) (0.3) (1.2) 13.6 Current portion of provisions for risks and charges 44.6 0.7 (2.7) (3.2) (2.3) 37.1 Total 98.7 2.7 1.0 (0.8) 0.3 (3.5) (4.6) 0.0 (3.5) 90.3

The main movements in the period are analysed below:

 Provisions amounted to €3.7 million, including €2.7 million classified as provisions for risks and €1 million classified as personnel expense. Employee benefits also include financial expense of €0.3 million and income for the discounting of post-employment benefits of €0.8 million, as the lower personnel expense resulting from the discounting of the total amount of the revaluation of post-employment benefits. Allocations to the provision for risks and charges (€2.7 million) refer for €2.3 million to the legal disputes provision, for €0.3 million to other risks and for €0.1 million to the agents’ leaving indemnity.  Utilisations of €4.6 million, of which €1.1 million for payments of post-employment benefits due, €0.6 million for other costs related to employees leaving the group, in addition to €2.3 million for utilisations of previous provisions allocated primarily for the suspension of the broadcasting of Gazzetta TV, and, lastly, €0.6 million for utilisations relating to the settlement of legal disputes.  Releases totalled €3.5 million and relate primarily to ordinary releases concerning legal disputes with positive outcomes and releases of provisions for various risks, relating mainly to the Unidad Editorial Group and RCS MediaGroup S.p.A..  Reclassifications recorded a negative balance of €3.5 million and originate from the provisions that have become certain and therefore were classified under payables as a result of the changed circumstances underlying the allocations made in due course. They refer for personnel exits for roughly €1 million.

22. Trade payables

Trade payables amounted to €263.6 million at June 30, 2017, marking a decrease of €29.3 million over December 31, 2016. The fall in trade payables concerned almost all areas and totalled €47.8 million. The biggest variation is attributable to Unidad Editorial (-€22.9 million), also for lower payables due to associates of the Bermont Group. In addition, lower payables to agents were recorded (down €4.6 million), based on the offsetting against advances disbursed to them. Bucking this trend, the Sports segment recorded an increase of €18.5 million in trade payables, due predominantly to the seasonal nature associated with the organisation of sports events.

23. Other payables and current liabilities

They amounted to €84.6 million at June 30, 2017, marking a decrease of €10.9 million over December 31, 2016. The decrease mostly concerns payables due to social security institutions (-€5.7 million) as well as Deferred income (-€7.7 million). The decrease in the latter is mainly attributable to the Sport segment as a result of the organisation of sporting events abroad.

24. Increase (decrease) in employee benefits and provisions for risks and charges reported in the statement of cash flows

The overall decrease reported in the statement of cash flows excludes the effect of discounting provisions, which has also been netted of net financial income (expense). This item does not include the reclassification related to the recognition of the amounts due to employees and ordinary recoveries (see note 21).

Reclassifications and other Note Dec-31-2016 Jun-30-2017 movements Releases Discounting Change Employee benefits 21 40.2 39.6 (0.3) (0.9) Provisions for risks and charges 21 58.5 50.7 3.5 3.5 (0.8) Total 98.7 90.3 3.5 3.5 (0.3) (1.7)

25. Changes in working capital reported in the statement of cash flows

Jun-30-2017 Jun-30-2016 Change in working capital (36.5) (16.6) Adjustments to capital expenditure for cash outflows 0.1 5.7 Reclassification of provisions (3.5) (4.3) Reversal of non-monetary changes (2.3) 2.6 Total (42.2) (12.6)

The item does not include the non-monetary changes, such as the recognition of the payable relating to items previously posted to provisions for risks. This item has also been adjusted to exclude movements not attributable to operations deriving, in particular, from the adjustment of trade payables for capital expenditure not settled in cash in the period under review.

26. Capital expenditure in property, plant and equipment and intangible assets reported in the statement of cash flows

This refers to capital expenditure made in the first six months of 2017 (€7.9 million), which exclude purchases that did not involve changes in the cash flows, and include the capital expenditure recorded in the prior year but paid in the period under review. The capital expenditure reported in the statement of financial position is reconciled with that included in the statement of cash flows for the first half of 2017 as follows:

Note Jun-30-2017 Jun-30-2016 Capital expenditure in intangible assets 15 (7.5) (9.8) Capital expenditure in property, plant and equipment 14 (0.4) (1.0) Total (7.9) (10.8) Adjustments to capital expenditure for cash outflows (2.6) (10.4) Total (10.5) (21.2)

27. Proceeds from the sale of equity investments reported in the statement of cash flows

The item recorded a negative balance of €1 million and refers to the cash outlay for expenses incurred for the transfer of the equity investment in the previous year, partly offset by the collection for the transfer of a Spanish equity investment.

28. Net change in loans and borrowings and other financial assets reported in the statement of cash flows

This item refers to the monetary changes included in net financial debt. As required by IFRS, current bank loans and overdrafts form part of the change in cash and cash equivalents.

The reconciliation with the changes in the net financial debt is provided below:

Note Jun-30-2017 Jun-30-2016 Change in net financial debt 20 (2.9) (108.5)

Change in cash and cash equivalents 3.2 (0.2) Non-monetary change in derivatives 1.9 2.0 Adjustments to investments for lease principal 2.5 4.7 Reversal of non-monetary changes 0.8 (0.7) To t a l 5.5 (102.7)

29. Cash and cash equivalents The balance of cash and cash equivalents in the statement of cash flows, net of the negative balance of current accounts, was a negative €17 million at June 30, 2017 (a negative €28.7 million at June 30, 2016).

30. The “Treasury shares and Equity Transactions” reserve

This reserve is recognised as a deduction from equity and amounted to €170.3 million. The value of treasury shares at June 30, 2017, unchanged with respect to last December 31, amounted to €27.1 million, while the “equity transactions” reserve arising from the acquisition of the non-controlling interests in already controlled investees, amounted to €143.2 million. The decrease of €0.3 million compared to December 31 originates from the acquisition of non-controlling interests from the shareholders of Editoriale Veneto S.r.l..

31. Valuation reserves

The valuation reserves amounts to -€2.2 million. It refers, for €1.7 million, to the hedging reserve including the tax effect, for a total of €0.5 million to the translation reserve, as well as the actuarial reserve, inclusive of the related tax effect.

32. Tax effect of other interim consolidated comprehensive income (expenses) The tax effect of other comprehensive income (expenses) is composed as follows:

First half 2017 First half 2016

Gross Tax Net Gross Tax Net Other comprehensive income (expense): amount benefit/(charge) amount amount benefit/(charge) amount

Reclassifiable to profit or loss: Gains (losses) on foreign currency translation of foreign operations 0.0 0.0 0.0 (8.3) 0.0 (8.3) Gains (losses) on cash flow hedges 1.9 (0.5) 1.4 1.9 (0.5) 1.4 Share of comprehensive income (expense) of equity- accounted investees ------Fair value gains (losses) on available-for-sale financial assets ------Not reclassifiable to profit or loss: Actuarial (loss)/gain on defined benefit plans 0.0 0.0 0.0 0.0 0.0 0.0

Total other comprehensive income (expense) 1.9 (0.5) 1.4 (6.4) (0.5) (6.9)

33. Income statement: analysis by quarter In order to appreciate the seasonality of the Group’s activities, the performances by quarter are summarised below:

(€/millions) 1st quarter 2nd quarter 3 rd quarter 4 th quarter Year 2017 2016 2017 2016 2016 2016 2016

Revenue 213.4 219.8 258.3 284.3 205.3 258.9 968.3 Distribution revenue 86.1 94.7 86.7 98.6 97.4 89.6 380.4 Advertising revenue 92.8 97.4 119.7 138.6 82.0 133.2 451.2 Other publishing revenue 34.5 27.7 51.9 47.1 25.9 36.1 136.7 Operating expenses (131.4) (151.0) (135.4) (175.6) (131.4) (141.0) (598.8) Personnel expense (67.5) (71.1) (64.2) (68.9) (65.7) (62.3) (268.2) Provisions for risks (1.4) (1.6) (1.3) (2.2) (1.1) (7.5) (12.4) Allowance for impairment (1.3) (0.4) (0.6) (0.6) (1.0) 0.2 (1.8) Share of profits (losses) of equity-accounted investees 0.3 0.6 0.1 0.6 0.4 1.2 2.8 EBITDA 12.1 (3.7) 56.9 37.6 6.5 49.5 89.9 Amortisation of intangible assets (8.8) (9.2) (8.5) (9.3) (9.2) (8.9) (36.6) Depreciation of property, plant and equipment (3.8) (4.4) (3.6) (4.2) (4.2) (4.2) (17.0) Depreciation of investment property (0.1) (0.2) (0.2) (0.2) (0.1) (0.1) (0.6) Other impairment losses on non-current assets - - - (0.1) (0.1) (0.5) (0.7) Operating profit (loss) (0.6) (17.5) 44.6 23.8 (7.1) 35.8 35.0 Net financial income (expense) (6.4) (8.0) (6.6) (8.1) (7.6) (6.6) (30.3) Gains (losses) on financial assets/liabilities - 0.1 1.2 0.7 (0.6) 0.1 0.3 Profit (loss) before tax (7.0) (25.4) 39.2 16.4 (15.3) 29.3 5.0 Income taxes 1.3 3.2 (9.5) (4.7) - (8.3) (9.9) Profit (loss) from continuing operations (5.7) (22.2) 29.7 11.7 (15.3) 21.0 (4.9) Profit (loss) from assets held for sale - - - 8.4 - - 8.4 Profit (loss) before non-controlling interests (5.7) (22.2) 29.7 20.1 (15.3) 21.0 3.5 (Profit) loss attributable to non-controlling interests - 0.2 - (0.2) - - - Profit (loss) for the period (5.7) (22.0) 29.7 19.9 (15.3) 21.0 3.5

34. Commitments Commitments were detailed in the notes to the consolidated financial statements at December 31, 2016, to which reference should be made for a more in-depth analysis.

In the first six months of 2017, the main guarantees given highlighted the following trends:  Sureties and endorsements provided amounted to €42.7 million and increased by €1.2 million compared to December 31, 2016, mainly as a result of the organisation of sporting events.  Other guarantees totalled €29.3 million, down €0.1 million compared to December 31, 2016. This item includes €0.9 million in other guarantees with related parties.  Commitments amounted to €2.7 million, and did not record any changes. The entire amount is entered into with related parties.

As part of disposals or contributions of equity interests or businesses, the RCS Group has given guarantees still in force in relation to tax, social security and employment. Such guarantees have been given in accordance with standard market practice.

Milan, August 3, 2017

On behalf of the Board of Directors:

Chairman and Chief Executive Officer

Urbano Cairo (Signed on the original)

STATEMENT PURSUANT TO ARTICLE 154 BIS, PARAGRAPH 5 OF THE CONSOLIDATED FINANCE ACT

Statement on the Condensed interim consolidated financial statements pursuant to Art. 154 bis of Legislative Decree no. 58/98

1. The undersigned, Urbano Cairo, Chairman and Chief Executive Officer, and Riccardo Taranto, Manager in charge of Financial Reporting for RCS MediaGroup, hereby attest to, also taking account of the provisions of paragraphs 3 and 4, Art. 154-bis of Legislative Decree no. 58 dated February 24, 1998: - the adequacy in relation to the company's characteristics and - the effective application, of the administrative and accounting procedures in preparing the condensed interim consolidated financial statements, during the first half of 2017.

2. The assessment of the adequacy of the administrative and accounting procedures for preparing the condensed interim consolidated financial statements at June 30, 2017 was carried out on the basis of the process defined by RCS MediaGroup, in line with the Internal Control – Integrated Framework model issued by the Committee of Sponsoring Organisations of the Treadway Commission as the reference framework generally accepted at international level.

3. It is also stated that: 3.1 the condensed interim consolidated financial statements of RCS MediaGroup at June 30, 2017: a) have been prepared in accordance with the International Financial Reporting Standards endorsed by the European Union pursuant to EC Regulation no. 1606/2002 of the European Parliament and Council dated July 19, 2002; b) correspond to the books and accounting records; c) are suitable to give a true and fair view of the issuer's statement of financial position and results of operations of the issuer and of the group of companies included in the consolidation;

3.2 the report on operations contains a reliable analysis of references to significant events that occurred in the first six months of the year and their impact on the Condensed interim consolidated financial statements, together with a description of the principal risks and uncertainties for the remaining six months of the year. The report on operations also includes a reliable analysis of the information on significant transactions with related parties.

Milan, August 3, 2017

Chairman and Chief Executive Officer Manager in charge of Urbano Cairo Financial Reporting (Signed on the original) Riccardo Taranto (Signed on the original)

ANNEXES

LIST OF THE GROUP’S EQUITY INVESTMENTS AT JUNE 30, 2017

Fully consolidated companies

REGISTERED BUSINESS SHARE/QUOTA % consolidated HELD % held COMPANY NAME CURRENCY OFFICE SEGMENT CAPITAL by Group BY directly

Geographical area - Italy RCS Investimenti S.p.A. Milan Finance EUR 39.129.066,00 99,69 RCS MediaGroup S.p.A. 99,69 RCS Factor S.r.l. in liquidation Milan Factoring EUR 100.000,00 90,00 RCS MediaGroup S.p.A. 90,00 RCS Digital Ventures s.r.l. Milan Multimedia EUR 118.000,00 100,00 RCS Mediagroup S.p.A. 100,00 MyBeautyBox S.r.l. Milan Multimedia EUR 10.000,00 60,00 RCS Digital Ventures s.r.l. 60,00 Blei S.r.l. in liquidation Milan Advertising EUR 1.548.000,00 100,00 RCS Mediagroup S.p.A. 100,00 RCS Produzioni S.p.A. Rome Production EUR 1.000.000,00 100,00 RCS MediaGroup S.p.A. 100,00 RCS Produzioni Milano S.p.A. Milan Production EUR 1.000.000,00 100,00 RCS MediaGroup S.p.A. 100,00 RCS Produzioni Padova S.p.A. Milan Production EUR 500.000,00 100,00 RCS Mediagroup S.p.A. 100,00 Consorzio Milano Marathon S.r.l. Milan Services EUR 20.000,00 100,00 RCS Sport S.p.A. 100,00 RCS Sport S.p.A. Milan Services EUR 100.000,00 100,00 RCS Mediagroup S.p.A. 100,00 Società Sportiva Dilettantistica RCS Active Team–SSD RCS AT a r.l. Milan Services EUR 10.000,00 100,00 RCS Sport S.p.A. 100,00 RCS Gaming Srl Milan Multimedia EUR 10.000,00 100,00 RCS MediaGroup S.p.A. 100,00 Digital Factory S.r.l. Milan Television EUR 500.000,00 100,00 Digicast S.p.A. 100,00 Sfera Service S.r.l. Milan Services EUR 52.000,00 100,00 RCS Mediagroup S.p.A. 100,00 Planet Sfera S.r.l. Milan Services EUR 40.000,00 51,00 Sfera Service S.r.l. 51,00 RCS Edizioni Locali S.r.l Milan Publishing EUR 1.002.000,00 100,00 RCS Mediagroup S.p.A. 100,00 Editoriale Fiorentina S.r.l. Florence Publishing EUR 1.000.000,00 50,09 RCS Mediagroup S.p.A. 50,09 Editoriale Del Mezzogiorno S.r.l. Naples Publishing EUR 1.000.000,00 100,00 RCS Mediagroup S.p.A. 100,00 Editoriale Veneto S.r.l. Padua Publishing EUR 1.840.000,00 100,00 RCS Mediagroup S.p.A. 100,00 Trovolavoro S.r.l. Milan Advertising EUR 674.410,00 100,00 RCS Mediagroup S.p.A. 100,00 Digicast S.p.A. Milan Television EUR 211.560,00 100,00 RCS MediaGroup S.p.A. 100,00

Geographical area - Spain Canal Mundo Radio Cataluna S.L. Barcelona Radio EUR 3.010,00 99,90 Unidad Editorial S.A. 99,99 Corporación Radiofónica Informacion y Deporte S.L.U. Madrid Radio EUR 900.120,00 99,91 Unedisa Comunicaciones S.L.U. 100,00 Ediciones Cónica S.A. Madrid Publishing EUR 432.720,00 99,31 Unidad Editorial S.A. 99,40 Ediservicios Madrid 2000 S.L.U. Madrid Publishing EUR 601.000,00 99,91 Unidad Editorial Revistas S.L.U. 100,00 Editora De Medios De Valencia, Alicante Y Castellon S.L. Valencia Publishing EUR 72.055,00 99,90 Unidad Editorial Informaciòn General S.L.U. 99,99 A Esfera dos Livros S.L.U. Lisbon Publishing EUR 5.000,00 74,93 La Esfera de los Libros S.L. 100,00 La Esfera de los Libros S.L. Madrid Publishing EUR 48.000,00 74,93 Unidad Editorial S.A. 75,00 Información Estadio Deportivo S.A. Seville Publishing EUR 154.339,91 84,89 Unidad Editorial Informaciòn Deportiva S.L.U. 84,97 Last Lap S.L. Madrid Services EUR 6.010,00 99,91 Unidad Editorial Informaciòn Deportiva S.L.U. 100,00 Last Lap Organiçao de eventos S.L. Lisbon Services EUR 30.000,00 99,91 Last Lap S.L. 99,67 Unidad Editorial Informaciòn Deportiva S.L.U. 0,33 Logintegral 2000 S.A.U. Madrid Distribution EUR 500.000,00 99,91 Unidad Editorial S.A. 100,00 Rey Sol S.A. Palma de Mallorca Publishing EUR 68.802,00 99,91 Unidad Editorial S.A. 66,67 Unidad Editorial Informaciòn General S.L.U. 33,33 Unedisa Comunicaciones S.L.U. Madrid Multimedia EUR 610.000,00 99,91 Unidad Editorial S.A. 100,00 Unedisa Telecomunicaciones S.L.U. Madrid Multimedia EUR 1.100.000,00 99,91 Unidad Editorial S.A. 100,00 Unedisa Telecomunicaciones de Levante S.L. Valencia Multimedia EUR 3.010,00 51,11 Unedisa Telecomunicaciones S.L.U. 51,16 Unidad Editorial S.A. Madrid Publishing EUR 125.896.898,00 99,91 RCS International Newspapers B.V. 73,75 RCS Investimenti S.p.A. 26,24 Unidad Liberal Radio S.L. Madrid Multimedia EUR 10.000,00 54,95 Unidad Editorial S.A. 55,00 Unidad de Medios Digitales S.L. Madrid Advertising EUR 3.000,00 49,95 Unidad Editorial S.A. 50,00 Unidad Editorial Informaciòn Deportiva S.L.U. Madrid Multimedia EUR 4.423.043,43 99,91 Unidad Editorial S.A. 100,00 Unidad Editorial Informaciòn Economica S.L.U. Madrid Publishing EUR 102.120,00 99,91 Unidad Editorial S.A. 100,00 Unidad Editorial Formacion S.L.U. Madrid Television EUR 1.693.000,00 99,91 Unedisa Telecomunicaciones S.L.U. 100,00 Unidad Editorial Informaciòn General S.L.U. Madrid Publishing EUR 102.120,00 99,91 Unidad Editorial S.A. 100,00 Unidad Editorial Juegos S.A. Madrid Multimedia EUR 100.000,00 99,91 Unidad Editorial S.A. 100,00 Unidad Editorial Información Regional S.L. Madrid Publishing EUR 4.109.508,00 98,07 Unidad Editorial S.A. 94,03 Unidad Editorial Informaciòn General S.L.U. 4,12 Unidad Editorial Revistas S.L.U. Madrid Publishing EUR 1.195.920,00 99,91 Unidad Editorial S.A. 100,00 Veo Television S.A. Madrid Television EUR 27.328.752,00 99,91 Unidad Editorial S.A. 100,00 Feria Bebe S.L. Barcelona Publishing EUR 10.000,00 60,00 Sfera Editores Espana S.L. 60,00 Sfera Direct S.L. Barcelona Publishing EUR 3.006,00 100,00 Sfera Editores Espana S.L. 100,00 Sfera Editores Espana S.L. Barcelona Publishing EUR 174.000,00 100,00 RCS Mediagroup S.p.A. 100,00

Geographical area - Other countries RCS International Newspapers B.V. Amsterdam Publishing EUR 6.250.000,00 100,00 RCS Mediagroup S.p.A. 100,00 Sfera Editores Mexico S.A. Colonia Anzures Publishing/Services MXN 8.807.100,00 100,00 RCS Mediagroup S.p.A. 99,99 Sfera Service S.r.l. 0,01 Sfera France SAS Paris Publishing EUR 240.000,00 66,70 Sfera Editores Espana S.L. 66,70 Hotelyo S.A. Chiasso Digital CHF 100.000,00 51,00 RCS Mediagroup S.p.A. 51,00 RCS Sports and Events DMCC Dubai Services EUR 100.000,00 100,00 RCS Sport S.p.A. 100,00

Equity-accounted investees REGISTERED BUSINESS SHARE/QUOTA HELD % held COMPANY NAME CURRENCY OFFICE SEGMENT CAPITAL BY directly

Geographical area - Italy Quibee S.r.l. Turin Digital EUR 15.873,02 RCS Digital Ventures s.r.l. 37,00 Gold 5 S.r.l. in liquidation Milan Advertising EUR 250.000,00 RCS MediaGroup S.p.A. 20,00 Consorzio C.S.I.E.D. Milan Distribution EUR 103.291,00 M-Dis Distribuzione Media S.p.A. 20,00 Liguria Press S.r.l. Genoa Distribution EUR 240.000,00 M-Dis Distribuzione Media S.p.A. 40,00 GD Media Service S.r.l. Milan Distribution EUR 789.474,00 M-Dis Distribuzione Media S.p.A. 24,00 M-Dis Distribuzione Media S.p.A. Milan Distribution EUR 6.392.727,00 RCS MediaGroup S.p.A. 45,00 MDM Milano Distribuzione Media S.r.l. Milan Distribution EUR 611.765,00 M-Dis Distribuzione Media S.p.A. 51,00 Pieroni Distribuzione S.r.l. Milan Distribution EUR 750.000,00 M-Dis Distribuzione Media S.p.A. 51,00 TO-dis S.r.l. Milan Distribution EUR 510.000,00 M-Dis Distribuzione Media S.p.A. 55,00 Trento Press Service S.r.l. Trento Distribution EUR 260.000,00 M-Dis Distribuzione Media S.p.A. 36,92

Geographical area - Spain Planet Sfera SL Barcelona Services EUR 40.000,00 Sfera Editores Espana S.L. 50,00 Corporacion Bermont S.L. Madrid Printing EUR 21.003.100,00 Unidad Editorial S.A. 37,00 Bermont Catalonia S.a. Barcelona Printing EUR 60.101,21 Corporacion Bermont S.L. 100,00 Bermont Impresion S.L. Madrid Printing EUR 321.850,00 Corporacion Bermont S.L. 100,00 Calprint S.L. Valladolid Printing EUR 1.856.880,00 Corporacion Bermont S.L. 39,58 Escuela de Cocina Telva S.L. Madrid Training EUR 61.000,00 Ediciones Cónica S.A. 50,00 Fabripress S.A.U. Madrid Publishing EUR 961.600,00 Corporacion Bermont S.L. 100,00 Impresiones y distribuciones de Prensa Europea S.A. Madrid Printing EUR 60.101,21 Corporacion Bermont S.L. 100,00 Lagar S.A. Madrid Printing EUR 150.253,03 Corporacion Bermont S.L. 60,00 Bermont Impresion S.L. 40,00 Madrid Deportes y Espectáculos S.A. Madrid Multimedia EUR 600.000,00 Unidad Editorial Informaciòn Deportiva S.L.U. 30,00 Newsprint Impresion Digital S.L. Tenerife Printing EUR 93.000,00 TF Print S.A. 50,00 Santa Maria del Omniprint S.A. Printing EUR 2.790.000,00 Corporacion Bermont S.L. 100,00 Cami Radio Salud S.A. Barcelona Radio EUR 200.782,08 Unedisa Comunicaciones S.L.U. 30,00 Recoprint Dos Hermanas S.L.U. Madrid Printing EUR 2.052.330,00 Corporacion Bermont S.L. 100,00 Recoprint Güimar S.L.U. Madrid Printing EUR 1.365.140,00 Corporacion Bermont S.L. 100,00 Recoprint Impresiòn S.L.U. Madrid Printing EUR 3.010,00 Corporacion Bermont S.L. 100,00 Recoprint Pinto S.L.U. Madrid Printing EUR 3.652.240,00 Corporacion Bermont S.L. 100,00 Recoprint Rábade S.L.U. Madrid Printing EUR 1.550.010,00 Corporacion Bermont S.L. 100,00 Recoprint Sagunto S.L.U. Madrid Printing EUR 2.281.920,00 Corporacion Bermont S.L. 100,00 Santa Cruz de TF Press S.L. Printing EUR 3.005,06 Corporacion Bermont S.L. 100,00 Tenerife Santa Cruz de TF Print S.A. Printing EUR 1.382.327,84 Corporacion Bermont S.L. 75,00 Tenerife Bermont Impresion S.L. 25,00 Unidad Liberal Radio Madrid S.L. Madrid Multimedia EUR 10.000,00 Unidad Editorial S.A. 45,00 Libertad Digital S.A. 55,00

Geographical area - Other countries Inimm Due S.à.r.l. Luxembourg Real Estate EUR 240.950,00 RCS MediaGroup S.p.A. 20,00

Available-for-sale companies SHARE/QUOTA HELD % held COMPANY NAME REGISTERED OFFICE BUSINESS SEGMENT CURRENCY CAPITAL BY directly

Geographical area - Italy Ansa Società Cooperativa Rome Publishing EUR 10.783.361,63 RCS Mediagroup S.p.A. 4,38 Cefriel S.c.a.r.l Milan Research EUR 1.057.797,70 RCS Mediagroup S.p.A. 5,46 Consuledit S.c.a.r.l. (in liquidation) Milan Publishing EUR 20.000,00 RCS Mediagroup S.p.A. 19,55 Emittenti Titoli S.p.A. Milan Finance EUR 4.264.000,00 RCS MediaGroup S.p.A 1,46 H-Farm Ventures S.p.A. Roncade (TV) Services EUR 5.003.000,00 RCS MediaGroup S.p.A 1,35 Immobiliare Editori Giornali S.r.l. Rome Publishing EUR 830.462,00 RCS MediaGroup S.p.A 7,49 Istituto Europeo di Oncologia S.r.l. Milan Scientific research EUR 80.579.007,00 RCS MediaGroup S.p.A 5,08 ItaliaCamp S.r.l. Rome Services EUR 10.000,00 RCS MediaGroup S.p.A 3,00 SAS Mode et Finance Paris Apparel EUR 6.965.714,00 RCS MediaGroup S.p.A 4,62 Mach 2 Libri S.p.A. Peschiera B. Publishing EUR 646.250,00 RCS MediaGroup S.p.A 19,09 Digital Magics S.p.A. Milan Multimedia EUR 4.929.839,00 RCS Digital Ventures s.r.l. 0,86 Mperience S.r.l. Rome Digital EUR 26.718,00 RCS Digital Ventures s.r.l. 2,00 Trova La Zampa s.r.l Milan Digital EUR 10.000,00 RCS Digital Ventures s.r.l. 5,00 Webentually S.r.l. Brescia Digital EUR 10.000,00 RCS Digital Ventures s.r.l. 15,00 The Gira s.r.l. Milan Services EUR 11.111,11 RCS Sport S.p.A. 9,25 Consorzio Edicola Italiana Milan Digital EUR 60.000,00 RCS Mediagroup S.p.A. 16,66 Onering S.r.l. (in liquidation) Montegrotto Terme (PD) Digital EUR 10.000,00 RCS Mediagroup S.p.A. 15,00 Premium Publisher Network (Consortium) Milan Advertising EUR 19.425,77 RCS Mediagroup S.p.A. 20,51 Giorgio Giorgi Srl Calenzano (FI) Distribution EUR 1.000.000,00 M-Dis Distribuzione Media S.p.A. 5,00

Geographical area - Spain Cronos Producciones Multimedia S.L.U. Madrid Publishing EUR 3.010,00 Libertad Digital Television S.A. 100,00 Digicat Sis S.L. Barcelona Radio EUR 3.200,00 Radio Salud S.A. 25,00 Libertad Digital S.A. Madrid Multimedia EUR 2.582.440,00 Unidad Editorial S.A. 1,16 Libertad Digital Publicidad y Marketing S.L.U Madrid Advertising EUR 3.010,00 Libertad Digital S.A. 100,00 Libertad Digital Television S.A. Madrid Television EUR 2.600.000,00 Libertad Digital S.A. 99,66 Medios de Azahar S.A. Castellon Services EUR 825.500,00 Editora De Medios De Valencia, Alicante Y Castellon S.A. 6,12 Palacio del Hielo S.A. Madrid Multimedia EUR 1.617.837,91 Unidad Editorial S.A. 8,53 Suscribe S.L. Palma de Mallorca Publishing EUR 300.000,00 Logintegral 2000 S.A.U. 15,00 Wouzee Media S:L Madrid Multimedia EUR 14.075,00 Unidad Editorial S.A. 10,00 13 TV S.A Madrid Multimedia EUR 2.953.140,00 Unidad Editorial S.A. 0,77

Geographical area - Other countries Yoodeal Ltd Crowborough Digital GBP 12.004,00 RCS Digital Ventures s.r.l. 2,00

EXCHANGE RATES AGAINST THE EURO

The main exchange rates used to translate financial statements drawn up in currencies other than the euro are as follows:

Exact Average Exact Average exchange rate exchange rate exchange rate exchange rate Jun-30-2017 Jun-30-2017 Dec-31-2016 Jun-30-2016

Swiss franc CHF 1.09300 1.07664 1.07390 1.09605 British pound GBP 0.87933 0.86059 0.85618 0.77877 Mexican peso MXN 20.58390 21.04407 21.77190 20.17313 United Arab Emirates dirham AED 4.18935 3.97578 3.86960 4.09661

RELATED PARTIES

Current loans and Parents Trade borrowings and financial Trade payables F ina nc ia l tra ns a c tio ns re c e iva ble s lia bilitie s

Cairo Communication S.p.A. 0.2 - 0.1

U.T. Communication S.p.A. - - -

TOTAL 0.2 - 0.1

Current loan J o intly c o ntro lle d c o m pa nie s Trade assets and Trade payables F ina nc ia l tra ns a c tio ns re c e iva ble s financial assets

M-dis Distribuzione Media S.p.A. 20.7 3.8 2.2

TOTAL 20.7 3.8 2.2

Current loans and Associates Current loan assets Trade receivables borrowings and Trade payables Commitments F ina nc ia l tra ns a c tio ns and financial assets fina nc ia l lia bilitie s

Fabripress S.A. (Bermont Group) 0.2 - - 2.4

MDM Milano Distribuzione Media S.r.l. - - 2.4 -

To -dis S.r.l. - - 0.5 -

Calprint S.l. (Bermo nt Gro up) - - - 1.2 0.9

Recoprint Dos hermanas S.L.U. (Bermont Group) - - - 0.5

Radio Salud SA 0.1 - - 0.5

Bermont Catalonia S.a. (Bermont Group) - - - 0.5

TF P rint S .a . (B e rm o nt Gro up) - - - 0.3

Recoprint Sagunto S.L.U. (Bermont Group) - - - 0.3

Recoprint Ràbade S.L.U. (Bermont Group) - - - 0.2

Go ld 5 S .r.l. - 0.1 - - -

Omniprint S.A. (Bermont Group) - - - 0.1 -

TO TA L 0.3 0.1 2.9 6.0 0.9

Non-current loans and Current loans and Other group companies (1) Trade receivables borrowings and borrowings and Trade payables Financial transactions financial liabilities financial liabilities

Cairo group companies 0.8 0.9

Mediobanca group companies - 11. 5 2 . 3 -

Della Valle group companies 1. 1

P ire lli gro up c o m pa nie s 0.3 - - -

Unipo lS a i S .p.A. gro up c o m pa nie s 0.1 - - TO TAL 2.3 11.5 2.3 0.9

Other operating Parents Raw materials and Revenue expense and Trade transactions services inc o m e

Cairo Communication S.p.A. (0.1) 0.1 U.T. Communication S.p.A.

TOTAL - (0.1) 0.1

Other operating J o intly c o ntro lle d c o m pa nie s Raw materials Revenue expense and Trade transactions and services inc o m e

M-dis Distribuzione Media S.p.A 10 3 . 3 (5.5) 0.6

TOTAL 103.3 (5.5) 0.6

Associates Raw materials and Revenue Trade transactions services

Fabripres s S.A. (Bermo nt Gro up) 0.9 (6.1)

Calprint S.l. (Bermont Group) - (2.1)

Bermont Catalonia S.a. (Bermont Group) - (1.9)

Recoprint Dos hermanas S.L.U. (Bermont Group) - (1.4)

Recoprint Sagunto S.L.U. (Bermont Group) - (1.1)

TF Print S.a. (Bermont Group) - (0.6)

Recoprint Pinto S.L.U. (Bermont Group) - (0.5)

Recoprint Rábade S.L.U. (Bermont Group) - (0.5)

Radio Salud S.A. 0.1 (0.4)

Omniprint S.A. (Bermont Group) - (0.3)

MDM Milano Distribuzione Media S.r.l. - (0.1)

Dis tribuido ra Co rdo bes a de Medio s Edito riales S.L. - -

Other associates - - TO TAL 1 . 0 (15.0)

Other group companies (1) Raw materials and Other operating Financial income Revenue Trade transactions services expense and income (expense)

Cairo group companies 0.5 (0.7) 0.2 -

Mediobanca group companies ---(0.8)

P ire lli gro up c o m pa nie s 0.0---

De lla Va lle gro up c o m pa nie s 1.2---

P ire lli gro up c o m pa nie s 0.2---

Unipo lS a i S .p.A. gro up c o m pa nie s 0.2--- TO TAL 2.1 (0.7) 0.2 (0.8)

Commitments and guarantees to related parties (€/millions) Parents - Associates 0.9 Other group companies - Other related parties 2.7 To t a l 3.6

(Translation from the Italian original which remains the definitive version)

Report on review of condensed interim consolidated financial statements

To the shareholders of RCS MediaGroup S.p.A.

Introduction We have reviewed the accompanying condensed interim consolidated financial statements of the RCS MediaGroup Group comprising the income statement, statement of comprehensive income, statement of financial position, statement of cash flows, statement of changes in equity and notes thereto, as at and for the six months ended 30 June 2017. The parent’s directors are responsible for the preparation of these condensed interim consolidated financial statements in accordance with the International Financial Reporting Standard applicable to interim financial reporting (IAS 34), endorsed by the European Union. Our responsibility is to express a conclusion on these condensed interim consolidated financial statements based on our review.

Scope of review We conducted our review in accordance with Consob (the Italian Commission for Listed Companies and the Stock Exchange) guidelines set out in Consob resolution no. 10867 dated 31 July 1997. A review of condensed interim consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA Italia) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the condensed interim consolidated financial statements.

RCS MediaGroup S.p.A. Report on review of condensed interim consolidated financial statements 30 June 2017

Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed interim consolidated financial statements of the RCS MediaGroup Group as at and for the six months ended 30 June 2017 have not been prepared, in all material respects, in conformity with the International Financial Reporting Standard applicable to interim financial reporting (IAS 34), endorsed by the European Union.

Milan, 4 August 2017

KPMG S.p.A.

(signed on the original)

Fabio Vittori Director