Mediaset: results approved for first nine months of 2014

Mediaset Board of Directors Meeting 11 November 2014

BOARD APPROVES THE GROUP'S RESULTS
FOR THE FIRST NINE MONTHS OF 2014

Consolidated Results
Net revenues: EUR 2,387.6 million
Gross Operating profit (EBITDA): EUR 895.7 million
Operating profit (EBIT): EUR 107.5 million
Net debt: down to EUR 968.4 million

Italy
Net revenues: EUR 1,730.4 million
Operating costs: down again to EUR 1,075.6 million
Operating profit (EBIT): EUR 23.7 million
Ratings: Canale 5 Italy's leading channel in prime time
and the 24 hours in the commercial target
Mediaset channels confirm their leadership
in all time bands among the audience in the 15-64 age range

Spain
Net revenues: EUR 658.2 million
Operating profit (EBIT): EUR 84.2 million
Ratings: Mediaset España channels
leaders in prime time and the 24-hours


The Board of Directors of Mediaset, which met today under the Chairmanship of Fedele Confalonieri, approved the company's interim report for the period to 30 September 2014.

In a difficult economic climate that continues to depress the advertising market and weaken the pay-TV market, the Mediaset Group continues to react energetically to contrast the situation and generate significant signals with further reductions in both operating costs and debt. The results of the third quarter of 2014, in particular, are better than those of the same period of 2013 in terms of EBITDA and net profit, while also advertising sales for the month of September in Italy show a better performance than that of the market as a whole. In Spain, the consolidation of the country's economic recovery has supported marked growth in all the major indicators of Mediaset España.
Performance in the first nine months of 2014 can be summarised as follows:


MEDIASET GROUP: CONSOLIDATED RESULTS

  • The consolidated net revenues of the Mediaset Group came to EUR 2,387.6 million, essentially in line with the EUR 2,390.1 million of the first nine months of 2013.
  • Gross operating profit (EBITDA) rose to EUR 895.7 million, compared with EUR 867.5 million in 2013.
  • EBIT for the period amounted to EUR 107.5 million, compared with the EUR 109.6 million the previous year.
  • The Group made a net loss of EUR 46.8 million, compared with -EUR 27.3 million in the same period of last year. The figure was affected by the sale during the year of a stake in Digital Plus, which had an impact of -EUR 16.0 million.
  • The Group's net debt fell from EUR 1,459.0 million on 31 December 2013 to EUR 968.4 million on 30 September 2014. This reduction was the result of an excellent level of free cash flow or EUR 214.4 million and net income of EUR 280.2 million from the sale of a stake in EI Towers in the second quarter of the year.


A BREAKDOWN OF RESULTS BY GEOGRAPHIC AREA
Italy

  • Consolidated net revenues amounted to EUR 1,730.4 million, compared with EUR 1,806.6 million in 2013. In particular:
    - The trend in advertising sales was affected in the first nine months by continuing negative trends in the market. In the period to 30 September, overall advertising sales by Publitalia '80 and Digitalia '08 amounted to EUR 1,161.3 million, compared with the EUR 1,220.7 million of the same period of the previous year, a fall of 4.9%. It should, however, be noted that in the same period of 2013 total advertising sales in Italy were down by13.5% and that in the month of September 2014, Nielsen figures indicate the Mediaset's sales (at -6.2% compared with September 2013) were better than both the TV market (-6.8%) and the advertising market as a whole (-6.4%).
    - Mediaset Premium revenues: sales generated by Premium's characteristic business - subscriptions and pre-paid cards - amounted to EUR 402.5 million, compared with the EUR 410.3 million of the first nine months of 2013.
    - EI Towers revenues were essentially stable at EUR 174.9 million (EUR 174.8 million in 2013).
  • There was a further reduction in operating costs (personnel, procurement, services and other charges) to EUR 1,075.6 million compared with EUR 1,105.6 million in the first nine months of 2013 (-2.7%), confirmation of the structural nature of the efficiency measures introduced over the last two years.
  • EBIT came to EUR 23.7 million, compared with EUR 64.2 million in the same period of 2013.
  • In the period the Group reported a net loss of -EUR 56.9 million, compared with the loss of -EUR 36.5 million in the first nine months of 2013.


Ratings: the Mediaset channels confirmed their leadership among viewers in the15-64 age range (the commercial target) in both prime time (35.8%) and the 24-hours (34.2%). Canale 5 was the most popular channel in the commercial target both in prime time (16.4%) and the 24-hours (15.6%).

Spain

  • In the first nine months of 2014 Gruppo Mediaset España generated consolidated net revenues of EUR 658.2 million, compared with EUR 583.9 million in the same period of the previous year (+12.7%).
  • Gross television advertising revenues came to EUR 628.3 million, compared with the EUR 564.5 million of the first nine months of 2013 (+11.3%).
  • EBIT for the period rose markedly to EUR 84.2 million, compared with EUR 45.4 million in 2013.
  • Net profit amounted to EUR 25,2 million, compared with EUR 22.1 million in the first nine months of 2013.


Ratings: In the first nine months of 2014 the TV channels of Gruppo Mediaset España achieved leadership in both prime time (29.5%) and the 24-hours (30.6%) share. Telecinco also confirmed its position as the most popular channel in the whole day (14.5%) and in prime time (15.4%).


FORECAST FOR THE YEAR

The overall economic scenario in Italy and the lack of any indications of a recovery in internal demand and consumer expenditure continue to make it difficult to make reliable estimates regarding advertising sales in the coming months. In October, advertising sales in Italy remained in line with those of the first nine months of the year.
Given the persistent lack of visibility concerning revenues, the Group remains focused on operational efficiency, cash generation and medium-term profitability, leveraging the structural cost cuts successfully carried out over the last two years.
Meanwhile, in Spain, where economic recovery is established, advertising revenues are expected to continue to grow also in the last quarter of the year.
Based on these indications and the assumption that the advertising market in the last part of the year will not be markedly different form that earlier in the year, the Group is nevertheless expected to end the year with a positive net result and to confirm that its consolidated net debt is essentially in line with the level recorded on 30 September.

The executive responsible for the preparation of the Mediaset S.p.A. accounts, Luca Marconcini, declares that, as per para. 2 art. 154-bis, of the Single Finance Bill, that the accounting information contained in this press release corresponds to that contained in the company's books.

Cologno Monzese, November 11, 2014

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