Company Presentation
Milano, Star Conference, March 21st 2019
Laura Cioli – Chief Executive Officer Stefano Canu - Investor Relations Disclaimer
➢ This document has been prepared by GEDI S.p.A for information purposes only and for use in the presentation of the
Group’s results and strategies.
➢ For further details on GEDI S.p.A , reference should be made to publicly available information, including the Annual
Report, the Semi-Annual Report and Quarterly Reports.
➢ Statements contained in this document, particularly the ones regarding any possible or assumed future performance of
GEDI S.p.A , are or may be forecasts and in this respect they involve some risks and uncertainties.
➢ Any reference to the past performance of GEDI S.p.A shall not be taken as an indication of future performance.
➢ This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall
form the basis of or be relied upon in connection with any contract or commitment whatsoever.
2 Agenda
1 Positioning and FY 2018 Results 2 Business Units 3 Digital, advertising and operations
3 GEDI at a glance
NATIONAL PRESS GEDI NEWS NETWORK RADIO
Digital
GNN Local websites Radio websites
Advertising
Manzoni multimedia sales organization (Gedi properties and third parties)
Printing facilities
5 + 1 (external) printing facilities
4 GEDI’s leadership
NATIONAL PRESS GEDI NEWS NETWORK RADIO
N°1 National & Local circulation N°1 Advertising collection
N°1 Online News and Video N°1 Local Advertising N°3 Audience (Private)
Leader in engagement in live events of the different brand (e.g., Deejay Ten, Rep Idee)
Digital
N°1 Repubblica is the first online news website in Italy by audience (+24% on key competitor) and video streaming N°1 Social engagement (Repubblica) N°2 Globally by reach of news website (Repubblica)
Advertising N°1 Multimedia sales organization for diversification with € 95m gross online revenues (30% third parties) and €120m gross radio revenues (35% third parties) N°4 Player in Italy after the two large TV groups and Google
5 GEDI’s organization
LE SCIENZE 50%
HuffingtonPost Italia 49%
PERSIDERA 30%
100% 99,85% 100% 82,07% 68,39%
Circulation La Stampa and Local Press Radio Digital Advertising National Press GEDI GEDI NEWS ELEMEDIA SPA GEDI DIGITAL MANZONI DISTRIBUZIONE NETWORK
17,93% 31,61%
100% 83% Production My Movies GEDI PRINTING MONET
ITEDI:
Main recent corporate actions: • Merger of Itedi into the Local press legal entity and creation of GNN (Gedi News Network) • Itedi printing facility transferred to Gedi Printing • Merger between Manzoni and PK in advertising collection • All group digital activities concentrated in Gedi Digital
6 2018 FY results
2017(1) 2018
Revenues 615.8 648.7 Circulation 262.7 284.6 Advertising 303.1 318.0 Add-ons & 50.0 46.2 others EBITDA adj. (2) 57.4 51.7 EBITDA 9.3% 8.0% margin EBITDA reported 52.8 33.1 EBIT adj. (3) 41.1 33.1 EBIT margin 6.7% 5.1% Net income (4) (123.3) (5) (32.2)
NFP (115.1) (103.2)
(1) Including Itedi consolidation from July 1, 2017 (2) EBITDA 2018 before restructuring expenses and other non-ordinary items totaling €18.7m (3) EBIT 2018 before €1.3m of write-downs of printing plants and €24.2m of write-downs on goodwill (4) Net Income net of charges mentioned in Note 2 & 3 and additional € 12m write-downs on assets (5) Includes extraordinary fiscal charge of € 143.2 Mn 7 2018 Results by business unit
NATIONAL PRESS (€m) FY'17 FY'18 Δ % Revenues 276,4 253,8 -8,2% Circulation 129,6 117,2 -9,6% Advertising 115,7 110,2 -4,7% Add-ons & Others 31,1 26,3 -15,3% EBITDA Adj 3,6 (6,9) n.m Ebitda Margin 1,3% -2,7% -4,0% GEDI NEWS NETWORK FY'17 FY'18 Δ % (€m) Revenues 204,0 254,1 24,6% Circulation 133,1 167,6 25,9% Advertising 61,0 76,5 25,3% Add-ons & Others 9,8 10,0 2,3% EBITDA Adj 23,6 25,3 7,3% Ebitda Margin 11,6% 10,0% -1,6%
RADIO (€m) FY'17 FY'18 Δ % Revenues 59,0 62,0 5,2% Advertising 57,6 61,0 6,0% Others 1,4 1,0 -29,6% EBITDA Adj 18,1 19,1 5,9% Ebitda Margin 30,6% 30,8% 0,2%
Adv, Interco & Other FY'17 FY'18 Δ % Services (€m) Revenues 76,4 78,8 3,1% EBITDA Adj 12,1 14,2 16,5% Ebitda Margin 15,9% 18,0% 2,1%
8 Our strengths
➢ A portfolio of strong brands with great identity and affiliation potential ➢ High quality of the editorial content, in terms of breadth and depth, proven over time ➢ Scale and coverage/reach focused on areas with higher GDP/capita built on a portfolio of more resilient local newspapers ➢ Undisputed leadership on digital, both on audience and reach, that constitutes a solid ground for the business transformation ➢ Encouraging initial results on digital subscriptions (Rep:, Top news, etc..) ➢ Strong and growing Radio business, yet showing some areas for further profit generation ➢ Proven ability to simplify, stream-line and cut costs
9 KeyKey actionsactions
Product enrichment Newsroom’s organization and costs
• New editor-in-chief on Repubblica and improvement of the newspaper • Trade union agreements with significant reduction in • Review of the weekly/monthly offering to streamline the editorial costs newspapers and support advertising and circulation • Reduction of external collaborations revenues (Espresso, RMotore, new paid product - Live) • New newsroom’s organization (desk mergers and • Synergies on national content of local newspapers synergies between newsrooms, focus on main sectors) leveraging on La Stampa as central “factory” • Integration of Content Management System (CMS) to • Relaunch and repositioning of two radios (Radio Capital enable stronger editorial synergies and IT cost reduction and M2O)
Printing and distribution Digital
• Development of existing pay products (Rep:, Top News & membership of local newspapers) through newsletters, • Closure of two printing facilities in Nov ‘18 and of two verticals, production/content optimization, ARPU additional in ‘19 increase, and stronger integration with local newspapers’ • Set-up of a new distribution footprint based on a series events of “local” contracts creating an independent channel • Further focus on verticals (economy, innovation, art) • Additional centralization/synergies in GNN • Enrichment of data architecture (new CRM Platform) to enable marketing automation for acquisition and churn prevention
10 Agenda
1 Positioning and FY 2018 Results 2 Business Units 3 Digital, advertising and operations
11 National press – key results
N°2 National circulation
NATIONAL PRESS (€m) FY'17 FY'18 Δ % Revenues 276,4 253,8 -8,2% • Circulation underperforming the market in Circulation 129,6 117,2 -9,6% 2018, but improving over time Advertising 115,7 110,2 -4,7% Add-ons & Others 31,1 26,3 -15,3% EBITDA Adj 3,6 (6,9) n.m • Trade union agreements for editorial costs Ebitda Margin 1,3% -2,7% -4,0% reduction approved − Working time reduction and exits − Reduction of external collaborations Repubblica vs Corriere − New editorial organization in the newsroom (desk mergers and synergies between newsrooms, focus on main sectors)
• New products to support advertising and circulation revenues
• New Editor-in-Chief from February 2019 and improvement of the newspaper
12 National press – product enrichment
• New Espresso (weekly) out on Sunday Product enrichment February 24, bundle with la Repubblica (at €2.5, +67%) • Significant positive impact on Repubblica’s • Review of the weekly copies during the first weeks offers (Espresso)
• Further focus on • RMotore (monthly) out on March 6 verticalizations on • Story telling on the revolution of mobility and specific sectors/themes the transition from the era of combustion to as Motors (advertising sustainable mobility revenues)
• Launch of new paid • LIVE first monthly synergic (all group products as Live newspapers) magazine focus on lifestyle out on (circulation revenues) February 14, bundle with la Repubblica (at €2.0, +33%) • Total circulation of ca. 500 K copies
13 GEDI News Network – key results
N°1 Local circulation & advertising
GEDI NEWS NETWORK FY'17 FY'18 Δ % • Synergies and efficiencies triggered by the (€m) merger with Itedi : Revenues 204,0 254,1 24,6% Circulation 133,1 167,6 25,9% Advertising 61,0 76,5 25,3% − Admin cost reduction through staff Add-ons & Others 9,8 10,0 2,3% functions and insourcing of Itedi's EBITDA Adj 23,6 25,3 7,3% administrative activities Ebitda Margin 11,6% 10,0% -1,6% − Integration with GEDI IT systems Pricing, €/copy − Editorial offices − Merger between Manzoni and PK in Price increase in Jan 2019 advertising collection Price increase (0.1) in 2018 Pricing − Contents’ synergies (common pages for 1,40 Power local newspapers, digital, videos, 1,20 events)
1,00 • New organization enabling additional 0,80 centralization/ efficiencies
0,60 • Pricing power in local newspaper (increase 0,40 in the cover price in Jan 2019 in some local newspapers)
14 GEDI News Network – positioning
80%
70% IL PICCOLO MESSAGGERO VENETO GAZZETTA DI MANTOVA 60%
LA STAMPA 50% (in Piedmont) LA PROVINCIA PAVESE IL MATTINO DI PADOVA 40% IL SECOLO XIX IL TIRRENO Market share Market IL CORRIERE DELLE ALPI 30% GAZZETTA DI REGGIO LA NUOVA FERRARA LA TRIBUNA DI TREVISO 20% GAZZETTA DI MODENA
LA NUOVA VENEZIA 10%
0% 0 20 40 60 80 100 120 140 Average copies sold daily Source : ADS 2017 15 Radio – key results
N°3 Radio private Group N°1 Radio advertising Group • Strong fundamentals and growth in RADIO (€m) FY'17 FY'18 Δ % usage and revenues in the last 3 Revenues 59,0 62,0 5,2% years Advertising 57,6 61,0 6,0% Others 1,4 1,0 -29,6% • Radio market gaining share on the EBITDA Adj 18,1 19,1 5,9% total advertising market Ebitda Margin 30,6% 30,8% 0,2%
• Despite the recent grow the Italian Daily Listeners 1 market is one of the most Age-group target: underdeveloped countries in Europe • under 44 years old (71%) 5.0m in terms of value (~400m vs 700m in • under 34 years old (44%) • 54 % are college / France) university graduates Age-group target: 1.6 m • under 44 years old • Most of profitability is on Radio Deejay (85%) while Radio Capital and M2O’s • under 34 years old • 25 – 54 years old (61%) (63%) performance can be improved • 43% are 18-44 years old 1.6m • 64% high/medium-high • Consolidation ongoing education
1) RadioTer research
16 Radio – key initiatives
Objectives Initiatives
• Sustain performance, audience and • Maintain current programming, talents and events’ ranking calendar • Maintain current premium adv price • Leverage on strong brand to enter new segment (i.e. positioning Sport) and new events • Leverage on DeeJay TV to sustain radio’s audience
• Grow number of listeners and their loyalty New Editor-in-Chief (June ’18) Massimo Giannini, formerly in • Increase of average spot value above “La Repubblica” with the objectives to : market average • Re-focus the radio on information leveraging on Group’s assets and adding 22 hours of News and “breaking news” every 15 minutes • Maintain the current focus on high quality music
• Reposition the radio to improve power New editorial project under new Editor-in-Chief (Dec ’18) ratio Albertino, leveraging his Radio DJ experience to: • Drive average spot value to market • Improve brand’s “coolness” average • Increase use of social media In addition, enrichment/improvement of the radio network to increase coverage
17 Agenda
1 Positioning and FY 2018 Results 2 Business Units 3 Digital, advertising and operations
18 Key priorities on digital
Local Off-Site Audience Video Strategy Development
•Further focus on Repubblica.it •Rep: and Top News digital «real time news» positioning and subscriptions new offer •Google Additional multiplatform usage growth •Adding native digital products to •YouTube revenue •Dedicated organization for video replica products •Facebook stream production •Local membership •MSN
•Set-up of a single infrastructure to collect all data managed at group level •New CRM platform •Users subscription strategy for adv profiling and conversions
Continuing the strategy of partnering with the most innovative global digital media
Building brand awareness and trust, also abroad, through prestigious awards: ONA Award 2017 Sport Category for “Totti Re di Roma” – Prix Italia 2018 Cross-platform special prize for “Chronicle of an abduction” – Prix Italia 2018 Signis Special Prize for “A sea of shame” – Prix Italia 2018 TV Documentary for “Daphne”
19 Portfolio of leading digital assets
Daily audience Comment • Repubblica.it • 3,0 mio • Top news website in Italy
N • La Stampa • 1,0 mio • Leading news website in North-west E W S • GNN* • 671K • Leading local news in Center-north
• HuffPost • 587K • Thought-leader for political news
V E • Business Insider • 138K • Focused on business and technology R T • MyMovies • Leader in movies’ reviews I • 246K C A • TvZap • 111K • Focused on TV shows and series L S
R • Deejay • 202K • Best performing radio on social A D • Capital • 13K • Focused on information/music I O • M2o • 7K • Focused on young audience
Including Secolo XIX Source: AWDB, 2H 2018, reach daily 20 Repubblica.it – KPIs
Italy – Online Daily Reach
N°1 in news
Source: AWDB, 2H 2018, reach daily
International – Facebook engagement International - Reach % vs peers
N°2 in news N°1 in social engagement Worldwide Worldwide
Source: Reuters Institute “Private Sector News, Social Source: Reuters Institute “Digital News Report 2018” Media Distribution, and Algorithm Change”, sep 2018 21 Leadership position on video
We have invested to build the N°1 video asset position in Italy
User needs Need to Know Need to Understand Need to Remember
• Live coverage (6/8 • Explainers • Webseries hours per day) • Minidocs • Docs Format • On demand clips • Agenda setting • Interactives (120 per day) • Fact checking • 360° • Crowdsourced • Data/infographics • AR / VR
• GEDI websites • Virtual cinemas • GEDI websites • GEDI websites • SVOD Distribution • External platforms • External platforms • Traditional Broadcasters
• Sponsorship • Advertising • Advertising • Subscription Monetization • Sponsorship • Rights
In 2018 average monthly video views have been 58,5 million N°1 In video news
22 Active digital subscribers
GEDI Active Subscribers
Replica REPLICA 2018 (average >110K ARPU >10€) Digital Native Repubblica 55% Magazines Quotidiani11% Locali 22% Ca. 72K La StampaLa Stampa 14% 13% Periodici 10% Repubblica Local 53% Newspapers 23%
Replica Digital Native
2017 2018
• Expanding the offer adding to replica products a • Long Term Market Potential: ~1% of the monthly range of native digital products (in depth articles, unique visitors of repubblica.it = ~300K analysis, investigative journalism, customized content, audio and podcast versions): • Benchmark 2018:
- Repubblica • Germany: Bild ~390K
- La Stampa • UK: The Guardian ~300K
- Local Membership • France: Le Monde ~160K
23 Local membership: subscription funnel
Subscription funnel of all GNN local Objective mermberships (exc. La Stampa and Secolo XIX) User Profile Offering example
Awareness • Up to 3 articles/month 613k daily Anonymous visitors
• Up to 5 articles/month Interest 320k Registered Users
2.3k Light Members • Unlimited access to website • Daily Newsletters • Special events and meetings 11.4k Top Members • PDF Replica Purchase • Member «Light» benefits
Source: AWDB, 2H 2018, reach daily 24 GEDI’s leadership in the advertising industry
• N°4 player in Italy after the two large TV groups and Google • N°1 multimedia sales organization for diversification with € 95m gross online revenues (30% third parties) and €120m gross radio revenues (35% third parties) • N°1 International Brands represented (Huffington Post, Business Insider, Taboola)
[B€]
[100%]
Source: Internal Data Source: Balance Sheet 2017, Internal Data, For Google/ Facebook estimation, Sky June 17-18 period * Market Share based on Net Adv Market Data (6,6M€) 25 Manzoni is the largest Radio advertising network Manzoni is the N°1 Radio advertising agency with the better segmentation and lower overlapping within the core target, Radios managed by Manzoni are the N°1 in most of the audience KPIs
Vs Total Listeners 70% 60% 50% Daily Listeners 35% (last 7 days) 30% 31% 30.5 m
AMC MEDIAMOND OPENSPACE RADIO RAI RDS 24 ORE SYSTEM 45% ADVERTISING Daily Listeners 33% (Daily average) 25% 18% 15.4 m 16% 15%
AMC MEDIAMOND OPENSPACE RADIO RAI RDS 24 ORE 26% ADVERTISING SYSTEM Daily Listeners 19% 13% (Average quarter-hour) 10% 1.6 m 8% 7%
AMC MEDIAMOND OPENSPACE RADIO RAI RDS 24 ORE SYSTEM ADVERTISING Source: TER 2018.1 Ind.+14. 26 Manzoni’s go-to-market strategy
Self-service recently introduced to serve local business through small local web agencies N°1 in terms of territorial coverage
TAILORED DIRECT SALES SPECIAL SELF (national and PROJECTS PROGRAMMATIC PERFORMANCE SERVICE local) «Fuori Format» PLATFORM
INSIDE (BIG DATA PLATFORM)
2,500 National Clients
1,500 Digital
35,000 Local Clients
15,000 Digital
27 Printing facilities’ rationalization
Printing facilities in 2017 Printing facilities in 2019
Closed / Outsourced in ’18-’19 Active at the end of ‘19 • Closing of two printing facilities in 2018
Milano − Gorizia, activity transferred to existing facilities Gorizia − Livorno after an outsourcing agreement Padova (Poligrafici Printing to print La Torino Mantova Repubblica and Il Tirreno of Tuscany) Livorno • Expected closure of other two printing facilities in 2019 Bari Sassari Roma − Milano & Bari activities transferred to existing facilities
• Possible further consolidation in the future
Catania (1) • All Group intercompany printing contracts are concentrated in a single legal entity (Gedi Printing)
(1) External Printing services 28