Mediaset Group Interim Financial Report As at 31 March 2014
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Mediaset Group Interim Financial Report as at 31 March 2014 MEDIASET S.p.A. - via Paleocapa, 3 - 20121 Milan Share Capital Euros 614,238,333.28 fully paid up Tax Code, VAT number and inscription number in the Milan Enterprises Register: 09032310154 Website: www.mediaset.it INDEX Corporate Boards ......................................................................................................................... 1 Financial Highlights ........................................................................................................................ 2 Introduction ..................................................................................................................... 3 Interim Report on Operations at 31 March 2014 ........................................................... 3 Significant events in the first quarter ............................................................................................. 8 Performance by geographical area and business segment ............................................................ 9 Group Performance ...................................................................................................................... 9 Statement of Financial Position ................................................................................................... 17 Group headcount ........................................................................................................................ 20 Related-party transactions ........................................................................................................... 21 Right to opt-out of the obligation to publish reports in the event of significant transactions ......................................................................................... 21 Events after 31 March 2014 ........................................................................................................ 21 Forecast for the year ................................................................................................................... 23 Consolidated Accounting Tables and Explanatory Notes ............................................ 25 Consolidated Accounting Tables ................................................................................................ 26 Explanatory Notes ....................................................................................................................... 32 CORPORATE BOARDS Board of Directors Chairman Fedele Confalonieri Deputy Chairman Pier Silvio Berlusconi Chief Executive Officer Giuliano Adreani Directors Marina Berlusconi Pasquale Cannatelli Paolo Andrea Colombo Mauro Crippa Bruno Ermolli Marco Giordani Alfredo Messina Gina Nieri Michele Perini Niccolò Querci Carlo Secchi Attilio Ventura Executive Committee Fedele Confalonieri Pier Silvio Berlusconi Giuliano Adreani Gina Nieri Risk and Control Committee Carlo Secchi (Chairman) Alfredo Messina Attilio Ventura Compensation Committee Attilio Ventura (Chairman) Paolo Andrea Colombo Bruno Ermolli Governance and Appointments Committee: Attilio Ventura (Chairman) Paolo Andrea Colombo Carlo Secchi Committee of Independent Directors for Related-Party Transactions Michele Perini (Chairman) Carlo Secchi Attilio Ventura Board of Statutory Auditors Mauro Lonardo (Chairman) Francesca Meneghel (Regular Auditor) Ezio Maria Simonelli (Regular Auditor) Massimo Gatto (Alternate Auditor) Flavia Daunia Minutillo (Alternate Auditor) Riccardo Perotta (Alternate Auditor) Independent Auditors Reconta Ernst & Young S.p.A. 1 MEDIASET GROUP: FINANCIAL HIGHLIGHTS Main Income Statement Data FY 2013 1Q 2014 1Q 2013 mio € % mio € % mio € % 3,414.7 100% Total net Revenues 820.8 100% 831.6 100% 2,588.5 75.8% Italy 620.9 75.6% 635.4 76.4% 826.8 24.2% Spain 200.4 24.4% 196.6 23.6% 246.3 100% EBIT 29.6 100% 53.4 100% 176.1 71.5% Italy 7.0 23.6% 34.6 64.8% 70.2 28.5% Spain 22.6 76.4% 18.8 35.2% 100.2 Profit before Tax and Minority Interest 2.5 37.3 8.9 Net Result (12.5) 9.3 Main Balance Sheet and Financial Data 31st December 2013 31st March 2014 31st March 2013 mio € mio € mio € 4,436.7 Net Invested Capital 4,356.9 4,577.4 2,977.7 Total Net Shareholders' Equity 2,978.2 2,993.1 2,119.9 Net Group shareholders' Equity 2,108.2 2,139.6 857.8 Minorities Shareholders' Equity 870.0 853.5 (1,459.0) Net Financial Position (1,378.7) (1,584.3) 1,139.3 Operating Cash Flow 296.4 279.3 549.4 Investiments 168.6 223.7 - Dividens paid by the Parent Company - - 4.1 Dividens paid by Subsidiares - - Personnel FY 2013 1Q 2014 1Q 2013 % % % 5,693 100% Mediaset Group Personnel (headcount) 5,738 100% 5,800 100% 4,401 77.3% Italy 4,448 77.5% 4,472 77.1% 1,292 22.7% Spain 1,290 22.5% 1,328 22.9% 5,882 100% Mediaset Group Personnel (average) 5,760 100% 5,952 100% 4,574 77.8% Italy 4,473 77.7% 4,626 77.7% 1,308 22.2% Spain 1,287 22.3% 1,326 22.3% Main Indicators FY 2013 1Q 2014 1Q 2013 7.2% EBIT/Net Revenues 3.6% 6.4% 6.8% Italy 1.1% 5.4% 8.5% Spain 11.3% 9.6% 0.0 EBT/Net Revenues 0.3% 4.5% 0.0 Net Profit/Net Revenues -1.5% 1.1% 0.01 EPS (euro per share) (0.01) 0.01 0.01 Diluted EPS (euro per share) (0.01) 0.01 2 INTRODUCTION This Interim Report on Operations at 31 March 2014 (the “Quarterly Report”) has been prepared in accordance with article 154-ter of Legislative Decree 58/1998 and amendments thereto and Consob Communication DEM/8041082 of 30 April 2008 and in compliance with the international accounting and financial reporting standards (IAS/IFRS) applicable under Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002, in particular with IAS 34—Interim Financial Reporting. The presentation of the reclassified consolidated financial statements and of the statutory financial statements provided in the Interim Report on Operations corresponds to the presentation adopted for the annual financial statements. The Explanatory Notes have been prepared in compliance with the minimum requirements of IAS 34—Interim Financial Reporting. As such, the information disclosed in this report is not comparable to that of complete financial statements prepared in accordance with IAS 1. This Quarterly Report has not been audited. INTERIM REPORT ON OPERATIONS AT 31 MARCH 2014 Group Highlights The Group’s consolidated earnings in the first quarter of the year were affected, as expected, by the Italian advertising market, which posted a slightly negative performance, anyway showing greater stability compared to previous quarters. The advertising market in Spain instead performed positively year-on-year for the second consecutive quarter, buoyed by more favourable conditions in the television advertising segment and a macroeconomic climate showing clearer signs of moderate economic growth and of recovery in private consumption. In both geographical segments the Group has adopted a policy of adapting its broadcasting offering on the basis of forecast advertising revenues, which are expected to show progressive improvement over the course of the year. Such measures have enabled a structural reduction to be achieved over the last two years in running costs, keeping EBITDA for the quarter substantially at first quarter 2013 levels and lowering consolidated financial debt compared to 31 December 2013 through free cash flow generated in the period. The measures did not have an adverse impact on the audience share figures of the Group’s channels in the reporting period. Key consolidated financial figures for the quarter compared to the corresponding quarter of the previous year are provided below. Consolidated net revenues amounted to EUR 820.8 million, down on the EUR 831.6 million recorded in 2013; EBITDA amounted to EUR 322.8 million, up from the EUR 321.5 million recorded in 2013; EBIT amounted to EUR 29.6 million compared to EUR 53.4 million for the corresponding period of the previous year; the figure was driven by higher amortisation expense on television broadcasting rights due to the different scheduling of sports events broadcast in the first quarter of 2014 compared to the first quarter of the previous year. Operating profitability fell to 3.6% from the 6.4% recorded in 2013; 3 Interim Financial Report at 31 March 2014 – Interim Report on Operations Earnings from operating activities, before tax and minority interests, amounted to EUR 2.5 million, compared to EUR 37.3 million at 31 March 2013; Net earnings of the Group amounted to EUR -12.5 million, compared to the EUR 9.3 million profit posted in the first quarter of 2013; Consolidated net financial debt fell from EUR 1,459.0 million at 31 December 2013 to EUR 1,378.7 million at 31 March 2014, due to a free cash flow for the period of EUR 87.7 million. Performance review by geographical area: Italy In the first quarter of 2014 consolidated net revenues from the Group’s Italian operations totalled EUR 620.9 million, down from the EUR 635.4 million posted in the corresponding period of the previous year. As was expected, advertising revenues in the first quarter of the year continued to show slightly negative growth, as despite the greater stability witnessed in the macroeconomic climate there are still no clear signs of a sustainable recovery in domestic demand and consumption. Gross advertising revenues in the first quarter for media licensed to the Group (free-to-air and pay television channels and the relative share of sub-licensing on websites) fell by 1.8%, although the figure suggests that the advertising market is progressively returning to normal compared to previous quarters. In the first quarter