Annual Report 2016
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ANNUAL REPORT 2016 INTRODUCTION MODEL GOVERNANCE FINANCIAL INFORMATION MODEL BUSINESS CORPORATE RESPONSIBILITY CONSOLIDATED FINANCIAL STATEMENTS, REPORT 2016 MANAGEMENT REPORT AND CORPORATE GOVERNANCE REPORT 2016 FINANCIAL STATEMENTS, REPORT MANAGEMENT REPORT AND CORPORATE ABOUT THIS GOVERNANCE REPORT 2016 REPORT 2016 RESPONSIBILITY CORPORATE INTRODUCTION MODEL BUSINESS REPORT ABOUT THIS GOVERNANCE MODEL INDEX IV CORPORATE RESPONSIBILITY REPORT 2016 V 4 71 161 INTRODUCTION GOVERNANCE BUSINESS ABOUT THIS MODEL MODEL REPORT Letter from the Chairman VI Ownership Structure of the Company 5 Industry Outlook 71 Scope 162 Letter from the Chief Executive Officer VIII Corporate Governance System 11 Strategy 72 International Standards 162 Business Context 1 Risk Management 20 Business model 75 Preparation of this Report 162 Key Performance Indicators 3 Data Protection 35 Key Success Elements 76 Materiality analysis 166 Cybersecurity 37 Other Performance Indicators 78 Dialogue 167 Supply Chain Management 39 Audiovisual Business 82 External Assurance 167 Content Management 45 Advertising Business 114 GRI Content Index 169 Management of Corporate Communication 53 Workforce 118 Glossary 179 Advertising Management 55 Shareholders Value 133 Directory 181 INTRODUCTION Team Management 58 Economic and Financial Results 140 Shareholders and Investors relation Tax Transparency 141 Management 65 Social Cash Flow 146 MODEL Stakeholders Relations 66 Value for Society 147 GOVERNANCE Participation in Public Policy Development 68 Global Compact Compliance 150 Participation in Corporate Responsibility Commitment with the Sustainable Initiatives 69 Development Goals 151 MODEL Environmental Performance 154 BUSINESS REPORT ABOUT THIS INTRODUCTION VI CORPORATE RESPONSIBILITY REPORT 2016 LETTER FROM THE CHAIRMAN Alejandro Echevarría Dear shareholders: The summary of our economic balance shows that we are once again Chairman leaders of the Spanish audio-visual companies: net profit of €171 mi- We hereby present to you the results of a year in which Mediaset Es- llion, with a 2.9% increase since 2015; EBITDA of €241.1 million, which TV ADVERTISING paña has maintained a leadership position amongst all Spanish TV is 24.3% of the total net revenue, and a 8.3% increase since 2015; EBIT HAS SHOWN companies in all management indicators of our field – audience rates, of €224.4 million, showing a 9.4% increase since 2015 and a 22.6% ONCE AGAIN ITS market share, advertising revenue, operating margins and profitabili- margin. All in all, we can confirm that we are now the third most pro- ty--showing the best annual operating results since the beginning of the fitable audio-visual company in all Europe, after ITV (Great Britain) and STRENGTH AS economic crisis in 2008. ProSieben (Germany). THE MAIN TOOL FOR COMMERCIAL Regardless of the economic evolution being affected by the lack of po- Regarding our stock market performance, the earnings per share have litical stability in Spain during 2016, the Spanish economy has doubled been of 0.51€, which are 5.9% higher that the ones obtained in 2015 COMMUNICATION, the growth of the European Union and it is amongst the most improved (0.48€). Our capitalisation is once again the highest amongst all the AND MEDIASET INTRODUCTION of the Eurozone. Regarding investments in the advertising field, the re- Spanish media companies, with a difference of €1,400 million in com- ESPAÑA HAS covery tendency is still on going, which is great news. parison with our biggest competitor, and 29% higher than the joint value ONCE AGAIN of all the other companies of our sector. The shares of the company OBTAINED THE In this context, TV advertising has shown once again its strength as the ended the year being one of the ten best values of IBEX 35, with a listing MODEL main tool for commercial communication, and Mediaset España has of 11.5€ and 11% of annual growth. BIGGEST MARKET GOVERNANCE once again obtained the biggest market share: 43.3%. SHARE: 43.3%. Concerning our main business, 2016 has ended with Mediaset España being the no.1 company regarding audience rates for the sixth year in a row, in addition to being the main reference when it comes to online MODEL media and social impact. The average audience rates have been of BUSINESS 30.2% of share. REPORT ABOUT THIS VII CORPORATE RESPONSIBILITY REPORT 2016 With regards to our social responsibility policy, we have maintained our I firmly believe that 2016 has been a good financial year in all aspects, well-known campaign 12 months (’12 Meses’), and, during 2016, we and it has been proven that this Company has reached its cruising have promoted initiatives that touch upon different issues that are im- speed, and is now ready to make the most of any improvement that DURING 2016, portant to us, and that, once again, have been very positively welcomed may arise on a macroeconomics level. by our audience and private and public organizations: we have maintai- MEDIASET ESPAÑA ned our perseverance in our fight against gender-based violence (‘Con Our leadership position –which we have maintained for years now--, HAS OBTAINED la trata no hay trato’); we have kept showing our full support for organ requires that we keep a high level of self-strictness in all areas. However, A BETTER donation (‘Eres perfecto para otros’); and we have brought awareness our very reliable staff --which serves as a reference in our field due to ASSESSMENT about the rights of socially rejected children (‘Los Comprometidos’), their skills and determination—helps us be positive that these quality amongst other important initiatives. levels will be maintained at all times. REGARDING THE CARBON It should also be emphasized that during 2016, Mediaset España has Lastly, I would like to take this opportunity to thank our biggest su- DISCLOSURE obtained a better assessment regarding the Carbon Disclosure analy- pporters: our audience, which chooses us every day as a means of ANALYSIS ABOUT sis about Climate Change: A-, while in 2015 it was a B. This makes information and entertainment; our advertisers, for believing that we are of Mediaset España one of the leader companies of its field when it their most efficient commercial communicators; our suppliers, who help CLIMATE CHANGE. comes to the inclusion of measures for reducing greenhouse gas emis- us grow in this industry; our shareholders, for believing in us; and our THIS MAKES sions. Likewise, we have strengthen our commitment to know more employees, who are the soul and the engine of Mediaset España. To all OF MEDIASET about and reduce these kind of emissions, and for this purpose, we of you, thank you. have reviewed all of the types of Scope 3 emissions, calculated in ac- ESPAÑA ONE cordance with the Greenhouse Gas (GHG) Protocol, which has been OF THE LEADER developed by the World Resources Institute (WRI) and the World Busi- COMPANIES OF ness Council on Sustainable Development (WBCSD). Lastly, we believe ITS FIELD WHEN that the participation of Mediaset España in Forética’s Transparency, Good Management and Integrity Cluster, whose purpose is to promote IT COMES TO healthy practices, should also be noted. Mediaset España has shown THE INCLUSION its commitment to making continuous improvement in the ranges of OF MEASURES INTRODUCTION transparency and good management. FOR REDUCING GREENHOUSE GAS EMISSIONS. MODEL GOVERNANCE MODEL BUSINESS REPORT ABOUT THIS VIII CORPORATE RESPONSIBILITY REPORT 2016 LETTER FROM THE CEO Paolo Vasile Mediaset España re-established itself in 2016 as the no.1 Spanish TV In-house production has, once more, been the undeniable trademark of Chief Executive Officer company regarding audience rates, market share, advertising revenue, Telecinco: almost 93% of its contents are internally produced. operating margins and profitability, achieving its best annual operating IN-HOUSE results since 2008 and becoming the third most profitable audio-visual Mediaset España has also established itself as the no.1 audio-visual PRODUCTION company in Europe. company regarding views of digital videos. Its main platforms (Tele- HAS, ONCE cinco.es, Cuatro.com, Divinity.es and the content platform Mitele.es, Indeed, with the dividend that we proposed to the General Board for an which has been completed this year with the video channel Mtmad, MORE, BEEN THE amount of €175.7 million, equivalent to a 100% pay-out of the annual amongst others) have rocketed for the second year in a row to the first UNDENIABLE adjusted net income, Mediaset España has distributed, since going position, by streaming more than one thousand million videos in 2016. TRADEMARK public in 2004, an approximate amount of € 1,940 million by way of Also, Mediaset España has led the social media impact in all months of dividends and has performed a share buy-back, which was later amor- the year, gathering 55% of TV impact on social media, with almost 50 OF TELECINCO: tised, for an approximate amount of €790 million, which is a total of € million comments, almost doubling those of our competitors. ALMOST 93% OF INTRODUCTION 2,730 million. ITS CONTENTS On the other hand, all the film productions that premiered in 2016 (‘A ARE INTERNALLY The ensemble of TV channels of Mediaset España has achieved its six- monster calls’, ‘To steal from a thief’, ‘Kiki, Love to Love’, etc.) establi- PRODUCED. th annual triumph in a row, proving the success of the most complete shed Telecinco Cinema as no.1 in the Spanish Box office for the third MODEL multichannel system in Spain, which became bigger in 2016 with the year in a row, with an audience measurement of 42.8%. GOVERNANCE addition of Be Mad. In this multichannel system, Telecinco and its dis- tinct leadership stand out for the fifth year in a row, as well as Cuatro, Mediaset España directly employs 1,275 people, and indirectly, tens of which is the third most viewed TV channel amongst people under 65 thousands.