Press release: RCS MediaGroup – Board of Directors

Results at 30 September 2016 approved[1]

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EBITDA before non-recurring expenses increased EUR 32.3 million: exceeding the increase expected for 2016.
EBITDA after non-recurring expenses improved EUR 34.5 million.
Efficiency measures for EUR 51.7 million.
Debt improved by more than EUR 100 million versus 31/12/2015 (more than EUR 117 million versus 30/09/2015)

Milan, 9 November 2016 - The Board of Directors of RCS MediaGroup, meeting today chaired by Urbano Cairo, examined and approved the consolidated results at 30 September 2016.

(1) Official figures retreated for uniformity to include the classification of net income from equity investments measured at equity in an income statement line before EBITDA.

The Group's consolidated net revenue at 30 September 2016 was EUR 709.4 million, reporting a decrease of 4.5% on a like-for-like basis with 2015, due to the drop in publishing and advertising revenue, partly offset by an increase in other revenue (EUR +8.9 million).

Advertising revenue stood at EUR 318 million, showing a decrease of 2.9%, which drops to 2.1% excluding the disposed assets Gazzetta TV and Sfera Cina from the comparison. The negative change is primarily the result of the performance of News Italy, offset for the most part by the EUR 9 million growthfrom the Sport area, including thanks to the positive effect of the European Football Championship. Specifically, sport advertising revenue benefited from +15.5% reported by the LaGazzetta dello Sport system, +11% by the Marca System and +21% achieved by RCS Sport, thanks to the revenue correlated with the Giro d'Italia, Color Run and the Dubai Tour.

Publishing revenue totalled EUR 290.8 million, reporting a decrease of EUR 33 million compared to the same 2015 period, mainly due to a different publishing plan for add-on products without an effect on profit and drop of reference markets both in Italy and Spain, only partly compensated by the cover prices of La Gazzetta dello Sport, El Mundo and Expansion.

Other revenue stood at EUR 100.6 million, reporting a 9.7% growth, primarily due to the good results of the Sport Area and in particularly thanks to events organised by RCS Sport and Last Lap.

EBITDA is positive for EUR 40.4 million, showing a EUR 34.5 million improvement mainly from cost containment actions and business focus strategy. By excluding non-recurring expenses totalling EUR 10.6 million (EUR 12.8 million of non-recurring expenses in the same 2015 period) from the comparison, the improvement of EBITDA totals EUR 32.3 million, thanks to cost containment actions that resulted in benefits for EUR 51.7 million (EUR 37.7 million in Italy and EUR 14 million is Spain).

Non-recurring expenses at 30 September 2016 include EUR 8.3 million related to expenses required for the offers on the RCS MediaGroup S.p.A. shares and expenses incurred for the turnover of top management.

EBIT reported an improvement of more than EUR 73 million thanks to the performance described above and lower amortisation totalling EUR 3 million. It should also be noted that various write-downs were performed during the same 2015 period related to the Unidad Editorial publications (EUR 35.9 million).

The netresult for the first nine months of 2016 improved EUR 109 million compared to the same 2015 period, reaching EUR -17.4 million (EUR -126.4 million in the same 2015 period) and reflects the trends described above.

Net financial debt reported a decrease of more than EUR 117 million compared to 30 September 2015 and more than EUR 100 million compared to 31 December 2015, totalling EUR 382.9 million, mainly due to the effect of the disposal of the shareholding in RCS Libri and the positive contribution of operations (EUR +46 million compared to 30 September 2015) partly offset by technical investments and non-recurring expenses.

Outlook

In a context which is still difficult and characterised by uncertainty, the Group's performance in the first nine months shows results better than expected.

The increase in EBITDA before non-recurring expenses and income of the first nine months (EUR +32.3 million compared to 30 September 2015) exceeds the improvement expected by the RCS Group for all of 2016, primarily thanks to the strong commitment to reduce costs (EUR 51.7 million in efficiency measures reported in the first nine months compared to the previous year).

Net financial debt at 30 September 2016 stood at EUR 382.9 million, reporting an improvement compared to forecasts for the considered period.

It should be noted that due to the effect of the activities performed for the offers on the RCS MediaGroup S.p.A. shares and costs incurred to renew the Board of Directors unexpected non-recurring expenses were incurred for an amount of approximately EUR 8.3 million.

Based on the above and with no currently unpredictable events, we believe that RCS Group can confirm the objectives forecast for 2016.

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Riccardo Taranto, the Director responsible for drawing up the company's statements, hereby declares, pursuant to article 154-bis, paragraph 2 of the Consolidated Law on Finance (Testo Unico della Finanza, TUF), that the information contained in this press release accurately represents the figures contained in the Group's accounting records.

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