MEDIASET GROUP Half Year Financial Report at 30 June 2015 WorldReginfo - 207dae83-4e38-4794-8ac2-00ebe851a54b 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 WorldReginfo - 207dae83-4e38-4794-8ac2-00ebe851a54b INDEX Corporate Bodies .......................................................................................................................... 1 Financial Highlights ........................................................................................................................ 2 Introduction ...................................................................................................................... 3 Interim Report on Operations at 30 June 2015 ............................................................... 3 Significant events in the first half of the year ............................................................................... 10 Performance by geographical area and business segment .......................................................... 13 Financial results ........................................................................................................................... 14 The Balance Sheet and Consolidated Financial Situations ........................................................... 21 Group headcount ........................................................................................................................ 24 Related Parties transactions ........................................................................................................ 24 Opt-out of obligation for publication of information documents in connection with significant operations .................................................................................... 24 Subsequent events ....................................................................................................................... 25 Risks and uncertainties for the remaining part of the financial year ............................................ 26 Forecast for the year ................................................................................................................... 27 Interim Consolidated Financial Statements ................................................................... 29 Consolidated Accounting Tables ................................................................................................. 30 Explanatory Notes ....................................................................................................................... 36 Statement concerning the Condensed Half-Year Financial Statements in compliance with Art. 154-bis of Italian Law Decree 58/98 ........................................ 59 Auditors’ review report on the interim condensed consolidated financial statements ................................................................................. 61 WorldReginfo - 207dae83-4e38-4794-8ac2-00ebe851a54b WorldReginfo - 207dae83-4e38-4794-8ac2-00ebe851a54b CORPORATE BODIES Board of Directors Chairman Fedele Confalonieri Deputy Chairman and Chief Executive Officer Pier Silvio Berlusconi Directors Giuliano Adreani Marina Berlusconi Franco Bruni Pasquale Cannatelli Mauro Crippa Bruno Ermolli Marco Giordani Fernando Napolitano Gina Nieri Michele Perini Alessandra Piccinino Niccolo' Querci Stefano Sala Carlo Secchi Wanda Ternau Executive Committee Fedele Confalonieri Pier Silvio Berlusconi Giuliano Adreani Marco Giordani Gina Nieri Risk and Control Committee Carlo Secchi (Chairman) Franco Bruni Fernando Napolitano Compensation Committee Michele Perini (Chairman) Bruno Ermolli Fernando Napolitano Governance and Carlo Secchi (Chairman) Appointments Committee Michele Perini Wanda Ternau Committee of Independent Directors for Michele Perini (Chairman) Related-Party Transactions Alessandra Piccinino Carlo Secchi 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 WorldReginfo - 207dae83-4e38-4794-8ac2-00ebe851a54b MEDIASET GROUP: FINANCIAL HIGHLIGHTS Main Income Statement Data FY 2014 1H 2015 1H 2014 mio € % mio € % mio € % 3,414.4 100% Total net Revenues 1,721.1 100% 1,724.8 100% 2,483.4 72.7% Italy 1,243.7 72.3% 1,257.4 72.9% 932.1 27.3% Spain 478.5 27.8% 468.0 27.1% 248.8 100% EBIT 137.5 100% 109.5 100% 104.4 42.0% Italy 27.0 19.6% 29.4 26.8% 144.8 58.2% Spain 111.0 80.7% 80.1 73.2% 138.7 Profit before Tax and Minority Interest 129.9 8.4 23.7 Net Result 24.3 (20.5) Main Balance Sheet and Financial Data 31st December 2014 30th June 2015 30th June 2014 mio € mio € mio € 3,906.8 - Net Invested Capital 3,702.1 4,281.0 3,045.6 - Total Net Shareholders' Equity 3,073.9 3,254.7 2,322.8 - Net Group shareholders' Equity 2,363.8 2,346.2 722.7 - Minorities Shareholders' Equity 710.1 908.5 (861.3) - Net Financial Position (628.2) (1,026.4) 1,226.5 - Operating Cash Flow 646.2 606.4 1,705.2 - Investiments 450.3 1,494.4 - - Dividens paid by the Parent Company (22.7) - - - Dividens paid by Subsidiares (44.2) - Personnel FY 2014 1H 2015 1H 2014 % % % 5,559 100% Mediaset Group Personnel (headcount) 5,584 100% 5,748 100% 4,299 77.3% Italy 4,314 77.3% 4,465 77.7% 1,260 22.7% Spain 1,270 22.7% 1,283 22.3% 5,711 100% Mediaset Group Personnel (average) 5,610 100% 5,734 100% 4,437 77.7% Italy 4,345 77.5% 4,449 77.6% 1,274 22.3% Spain 1,265 22.5% 1,285 22.4% Main Indicators FY 2014 1H 2015 1H 2014 7.3% - EBIT/Net Revenues 8.0% 6.3% 4.2% - Italy 2.2% 2.3% 15.5% - Spain 23.2% 17.1% 4.1% - EBT/Net Revenues 7.5% 0.5% 0.7% - Net Profit/Net Revenues 1.4% -1.2% 0.02 - EPS (euro per share) 0.02 (0.02) 0.02 - Diluted EPS (euro per share) 0.02 (0.02) 2 WorldReginfo - 207dae83-4e38-4794-8ac2-00ebe851a54b INTRODUCTION This Interim Financial Report, prepared pursuant to Art. 154-ter of Italian Legislative Decree no. 58/1998, includes the Report on Operations, the half-yearly condensed consolidated financial statements and the Certification pursuant to Article 154-bis of Italian Legislative Decree no. 58/98. The half-yearly condensed consolidated financial statements are prepared in accordance with International Accounting Standards (IAS/IFRS) applicable under the EC Regulation 1606/2002 of the European Parliament and of the Council dated 19 July 2002 and in particular IAS 34 - Interim Financial Reporting, as well as the regulations issued to implement Article 9 of Italian Legislative Decree no. N.38/2005. The presentation of the reclassified consolidated financial statements and of the statutory financial statements provided in this Interim Financial Report corresponds to the presentation adopted for the annual financial statements. The notes have been prepared in accordance with the content prescribed by IAS 34 - Interim Financial Reporting, also taking into account the provisions issued by Consob Communication No. 6064293 dated 28 July 2006. As such, the information disclosed in this report is not comparable to that of complete financial statements prepared in accordance with IAS 1. INTERIM REPORT ON OPERATIONS AS AT 30 JUNE 2015 Group Highlights The first half of the financial year saw a strengthening of the trend in operating performance for the Group's main activities that had already emerged in first quarter. Specifically, in Italy, the performance of advertising revenue gradually normalised itself in the second quarter, which, together with the ongoing and robust growth of advertising revenue in Spain - now unabated for seven quarters in a row - and coupled with a stringent cost control policy in both territories, enabled the Group to deliver significant growth in terms of both operating results and profitability. Operating performance, together with the reduction in financial expenses and improvement in the earnings of investees, enabled the achievement of a positive consolidated net profit, compared to the net loss recorded in the same period of 2014. During the half-year, moreover, the Group further strengthened its content availability and completed the repositioning exercise that, starting from July 1, led to the launch of Premium Mediaset, the Group's revamped editorial and commercial Pay offering focussed on high-end, exclusive content for the next seasons. Premium Mediaset, as a matter of fact, will offer live broadcasts of Serie A League matches of the best clubs, with exclusivity over images, comments and pre-match, post-match and pitch interviews, exclusivity over the entire Champions League, the best International film offering since 2016 thanks to exclusive multi-platform agreements with Warner and Universal and the best national film offering, guaranteed by the subsidiaries Medusa and Taodue: all the above delivered both in linear and non-linear mode and enriched by a cutting-edge application for simplified web access to all high-definition contents, with the creation of a unique and distinctive Pay offering on the national market. 3 WorldReginfo - 207dae83-4e38-4794-8ac2-00ebe851a54b Half Year Financial Report at 30 June 2015 – Interim Report on Operations Key consolidated financial figures for the half-year compared to the corresponding period of the previous year are provided below. Consolidated net revenues amounted to EUR 1,721.1 million, essentially stable on the EUR 1,724.8 million for