Gruppo Editoriale L Espresso Società per azioni. Interim Report at September 30, 2012

Transcription

1 Gruppo Editoriale L Espresso Società per azioni Interim Report at September 30, 2012 Gruppo Editoriale L Espresso SpA Via Cristoforo Colombo, Rome, Italy Share capital Euro 61,534, fully paid-in - Rome Ec. and Admin. Repertoire No VAT No Tax Code and Rome Companies Register enrolment No Company subject to the management and coordination of CIR SpA

2 CONTENTS Report of the Board of Directors at September 30, 2012 Operating performance and consolidated results at September 30, 2012 Page 4 Market Review Page 4 Operating performance for the first nine months of 2012 Page 5 Key results for the third quarter of 2012 Page 7 Subsequent events and outlook Page 7 Consolidated financial statements at September 30, 2012 Consolidated Income Statement and Consolidated Statement of Comprehensive Income Page 9 Consolidated Income Statement and Consolidated Statement of Comprehensive Income Third Quarter Page 10 Consolidated Statement of Financial Position Page 11 Changes in the Consolidated Net Financial Position Page 12 Consolidated Cash Flow Statement Page 13 Consolidated Net Financial Position Page 14 Notes to the Interim report at September 30, 2012 Foreword Page 16 Scope of consolidation Page 16 Income Statement Page 17 Statement of Financial Position Page 20 Certification pursuant to Art. 154 bis, paragraph 2 of Italian Legislative Decree No. 58 dated February 24, 1998 Page 24

3 Report of the Board of Directors at September 30, 2012

4 Gruppo Editoriale L Espresso Interim report at September 30, 2012 INTERIM REPORT OF THE BOARD OF DIRECTORS ON GROUP OPERATIONS AT SEPTEMBER 30, 2012 OPERATING PERFORMANCE AND CONSOLIDATED RESULTS AT SEPTEMBER 30, 2012 Consolidated results ( million) Jan.-Sep Jan.-Sep % 2012/2011 Revenues, of which: % circulation % advertising % add-on products % other % Gross operating profit % Operating profit % Pre-tax profit % Net profit % September 30, December 31, September 30, ( million) Net financial position (112.4) (110.2) (105.1) Shareholders equity before minority interests Group Shareholders equity minority interests (1.8) Employees 2,723 2,673 2,584 MARKET REVIEW The deterioration in the economic scenario, characterised by a decisively recessionary period and considerable uncertainty with regard to prospects, reflects heavily on the publishing sector. The advertising investments reported a sharp drop: in the first eight months of 2012, they were in fact down 10.5% compared to the same period in 2011 (Nielsen Media Research data). The negative trend in consumption led to significant cuts in advertising expenditure by all the important sectors (foodstuffs, transport, TLC, fashion and cosmetics, housing, etc.). The drop in advertising investments what is more deteriorated during the period, passing from -7.5% in the first quarter to -11.6% in the second quarter and, in conclusion, to -14.9% in the two-month period July-August (Nielsen Media Research data). This trend affected all the traditional media: in the period from January to August, press recorded a drop of 14.8%, television 10.9% (with -14.5% for traditional TV and % for satellite and digital terrestrial TV) and, in conclusion, radio 7.4%. The only sector which once again showed a favourable trend was Internet, which, excluding search engines since they are not surveyed, reported an increase of 11%. 4

5 Gruppo Editoriale L Espresso Interim report at September 30, 2012 In greater detail, with regard to advertising investments in the press, both dailies and periodicals disclosed significant decreases, -13.9% and -16.2% respectively, with more or less identical drops for national and local advertising. With regard to circulation, the falling trend already seen in the last few years continued, both for dailies and periodicals (the current ADS data does not provide a comparison with the previous year, but internal estimates based on ADS reveal a drop in dailies of around 7%). OPERATING PERFORMANCE FOR THE FIRST NINE MONTHS OF 2012 Consolidated net revenues amounted to 594 million, down by 9.1% with respect to the same period in 2011 ( million). This decrease was due to the drop in advertising revenues, deriving from the market trend and the decrease in activities in the add-on products segment. Circulation revenues, excluding add-on products, amounted to million, with a drop of 3% with respect to the same period last year ( million); this decrease can be considered to be essentially contained in relation to a market context characterised by a significant reduction in consumption and a progressive decline in printed paper. On the basis of the latest ADS (August 2012) and Audipress (Survey 2012/II) figures, la Repubblica is confirmed in its leadership position in terms of newsstand sales and as the leading informative newspaper in terms of average number of daily readers (3.2 million). A public purchasing digital products of the newspaper also started to be seen and in September 2012 the number of active subscriptions exceeded 50 thousand. According to the latest Audipress surveys, L Espresso is in pole position among current affairs magazines with 2.7 million readers, up by 1.6% when compared with the previous survey. In conclusion, a vast renewal programme was completed in June 2012 for the 18 local newspapers which now present a new graphic layout common to all the publications and are in full colour; a new totally integrated, press-web, publishing system has also been introduced. Advertising revenues, totalling million, recorded a drop of 10.1% on the same period last year, in a decreasing market as of August down 10.5%. Changes per media form essentially reflect the general market trends, in any event disclosing indices slightly more favourable for the Group on all media. In the first nine months of the year, press lost 14.2% (-14.8% for the market in August) and radio 6.7% (-7.4% for the market in August). The progress of advertising on the internet was very positive, up 14.3%, in the face of a market at 11%, confirming the brilliant dynamics of the last few years even in a decidedly unfavourable general context. 5

6 Gruppo Editoriale L Espresso Interim report at September 30, 2012 The Group counts on a daily audience of 1.7 million users and Repubblica.it once again confirmed its position in 2012 as the leading information website in Italian, with an advantage on the second place of around 20%. The audiences of the local dailies as well as that of the female website D are also undergoing considerable growth. Add-on product revenues amount to 34 million and disclosed a significant drop (- 35.1%) with respect to the same period in 2011; this reflects the generalised depression in consumption and the progressive decrease in the specific market underway since 2007, after a period of intense activity. Other revenues amounting to 18.3 million increased by more than 20% with respect to the first nine months of 2011, as a result of digital terrestrial bandwidth leasing to third party operators and the first positive developments in the subscriptions for digital products. Total costs reported a reduction of 5.2%, due mainly to the new plans for reducing staff and costs undertaken during The average staff for the period fell 4.8% when compared with that in the same period last year, passing from 2,765 to 2,632 employees. The areas most greatly affected by the further reduction in costs registered in 2012 were the industrial and administrative sectors. Consolidated gross operating profit was 82.8 million, down 26.1% on the 112 million in the same period of Around 50% of this decrease was attributable to the reduction in the margin on collateral products and the remaining part derives from press and radio activities, hit by a decrease in advertising revenues. Internet results were by contrast better, thanks to the increase in revenues, as well as those for television, due to the greater bandwidth rental activities. Consolidated operating profit was 54.3 million, down 35.6% with respect to that for the same period last year ( 84.3 million). Consolidated net profit amounted to 26.4 million against 41.4 million in the first nine months of The consolidated net financial position, taking into account dividends of 25 million and the purchase of treasury shares for 1.6 million, came at September 30, 2012, to million, compared with million at September 30, The Group staff, including short-term contracts, amounted at the end of September to 2,584 employees, down 89 units with respect to December 31, The average staff for the period was 4.8% lower than in the first nine months of

7 Gruppo Editoriale L Espresso Interim report at September 30, 2012 KEY RESULTS FOR THE THIRD QUARTER OF 2012 Consolidated results ( million) III Quarter 2011 III Quarter 2012 % 2012/2011 Revenues % Gross operating profit % Operating profit % Pre-tax profit % Net profit % The performance in the third quarter confirms the trends noted already in the first half of the year, with a slightly more pronounced reduction in revenues and the result due to the more critical performance of advertising revenues. Net consolidated revenues decreased 11.3%, with advertising revenues down 14.2%; the remaining revenues disclosed changes in line with the first half of the year. The consolidated operating profit amounted to 12.2 million compared to 21.3 million for the third quarter of The consolidated net profit totalled 5.2 million ( 9.9 million in the same period of 2011). SUBSEQUENT EVENTS AND OUTLOOK The current situation of the economy, the uncertainty regarding short and mid-term prospects, as well as the structural transformations underway in the printed paper and communication sectors more generally, have led to significant reductions in revenues for the publishing sector once again in The first signs relating to the fourth quarter of the year, and regarding advertising revenues in particular, do not suggest any improvement. The negative impact of the situation described above on the results of publishing firms is extremely significant and well reflected by the interim financial statements published by the leading operators in the sector. Despite this, the Group closed the first nine months with a particularly positive result and confirms the forecast for a profit for the rest of the year as well, albeit down significantly with respect to The structural nature of the crisis underway requires the Group to once again commit itself with regard to measures for protecting its cost efficiency over the short and mid-term, measures which must involve further reductions in costs and the speeding up of digital development. 7

8 Financial statements

9 Espresso Group Consolidated Income Statement Jan-Sep Jan-Sep ( million) Revenues 653,7 594,0 Change in inventories 0,5 0,1 Other operating income 7,9 16,3 Purchases (71,5) (66,5) Services received (266,9) (251,8) Other operating charges (11,3) (18,2) Valuation of investments at equity 0,7 0,7 Personnel costs (201,1) (191,8) Depreciation, amortisation and write-downs (27,7) (28,5) Operating profit 84,3 54,3 Net financial income (expense) (10,8) (8,9) Pre-tax profit 73,5 45,4 Taxes (32,1) (19,0) Net profit 41,4 26,4 Minority interests 0,0 (0,0) GROUP NET PROFIT 41,4 26,4 Earnings per share, basic 0,104 0,067 Earnings per share, diluted 0,097 0,062 Consolidated Statement of Comprehensive Income Jan-Sep Jan-Sep ( million) NET PROFIT 41,4 26,4 Other comprehensive income components: Profit/(loss) on restatement of financial assets held for disposal (1,5) 2,1 Tax effect of Other profit/(loss) 0,4 (0,6) Other comprehensive income components, net of tax effect (1,1) 1,5 TOTAL COMPREHENSIVE INCOME 40,3 28,0 Total comprehensive income attributable to: Shareholders of the parent company 40,3 27,9 Minority interests (0,0) 0,0

10 Espresso Group Consolidated Income Statement - Third Quarter Q III Q III ( million) Revenues 196,3 174,2 Change in inventories (0,1) 0,1 Other operating income 1,4 1,2 Purchases (22,4) (19,7) Services received (81,6) (75,6) Other operating charges (2,3) (2,1) Valuation of investments at equity 0,2 0,2 Personnel costs (61,1) (56,5) Depreciation, amortisation and write-downs (9,2) (9,8) Operating profit 21,3 12,2 Net financial income (expense) (3,5) (3,1) Pre-tax profit 17,8 9,1 Taxes (7,8) (3,8) Net profit 9,9 5,3 Minority interests 0,0 (0,1) GROUP NET PROFIT 9,9 5,2 Consolidated Statement of Comprehensive Income - Third Quarter Q III Q III ( million) NET PROFIT 9,9 5,3 Other comprehensive income components: Profit/(loss) on restatement of financial assets held for disposal (1,0) 0,7 Tax effect of Other profit/(loss) 0,3 (0,2) Other comprehensive income components, net of tax effect (0,7) 0,5 TOTAL COMPREHENSIVE INCOME 9,2 5,8 Total comprehensive income attributable to: Shareholders of the parent company 9,2 5,7 Minority interests (0,0) 0,1

11 Espresso Group Consolidated Statement of Financial Position ASSETS 31-dic 30-set ( million) Intangible assets with an indefinite useful life 659,8 659,8 Other intangible assets 1,8 6,5 Intangible assets 661,7 666,3 Property, plant and equipment 162,8 149,7 Investments valued at equity 28,9 28,7 Other investments 2,5 2,6 Non-current receivables 1,1 1,1 Deferred tax assets 28,9 25,2 NON-CURRENT ASSETS 885,9 873,7 Inventories 22,0 18,9 Trade receivables 248,5 197,6 Marketable securities and other financial assets 48,7 40,9 Tax receivables 10,5 18,4 Other receivables 14,1 26,8 Cash and cash equivalents 141,4 132,4 CURRENT ASSETS 485,3 435,0 TOTAL ASSETS 1.371, ,6 LIABILITIES AND SHAREHOLDERS EQUITY 31-dic 30-set ( million) Share capital 61,5 61,5 Reserves 183,3 178,8 Retained earnings (loss carry-forwards) 259,8 299,3 Net profit (loss) 58,6 26,4 Group Shareholders Equity 563,3 566,1 Minority interests 1,7 1,7 SHAREHOLDERS EQUITY 565,0 567,8 Financial debt 285,1 250,2 Provisions for risks and charges 40,0 32,2 Employee termination and other retirement benefits 68,1 64,8 Deferred tax liabilities 118,2 122,6 NON-CURRENT LIABILITIES 511,3 469,7 Financial debt 15,2 28,2 Provisions for risks and charges 39,0 36,7 Trade payables 133,3 110,2 Tax payables 31,6 27,0 Other payables 75,7 69,1 CURRENT LIABILITIES 294,9 271,2 TOTAL LIABILITIES 806,2 740,9 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 1.371, ,6

12 Espresso Group Changes in the Consolidated Net Financial Position Jan-Sep Jan-Sep ( million) SOURCES OF FUNDS Net profit (loss) for the period, including minority interests 41,4 26,4 Depreciation, amortisation and write-downs 27,7 28,5 Fair value of stock options 1,9 1,4 Net change in provisions for personnel costs (4,6) (3,3) Net change in provisions for risks and charges 0,4 (10,1) Losses (gains) on disposal of fixed assets (2,6) (0,0) Adjustment for investments valued at equity 0,0 0,1 Self-financing 64,1 43,1 Decrease (Increase) in non-current receivables (0,0) (0,0) Increase in deferred tax payables/decrease in deferred tax assets 8,6 8,2 Increase in tax payables/decrease in tax receivables 6,2 (12,5) Decrease (Increase) in inventories (2,8) 3,1 Decrease (Increase) in trade and other receivables 28,3 38,2 Increase (Decrease) in trade and other payables (29,3) (29,8) Changes in current assets 10,9 7,1 CASH FLOW FROM OPERATING ACTIVITIES 75,0 50,2 Increases in capital and reserves 0,6 - Other changes - 1,5 TOTAL SOURCES OF FUNDS 75,6 51,7 USES OF FUNDS Net investments in fixed assets (15,8) (20,0) Net equity investments (2,2) (0,0) Purchase of own shares (3,9) (1,6) Dividends paid (29,8) (25,0) Other changes (1,3) (0,0) TOTAL USES OF FUNDS (53,0) (46,6) Financial surplus (deficit) 22,6 5,1 BEGINNING NET FINANCIAL POSITION (135,0) (110,2) ENDING NET FINANCIAL POSITION (112,4) (105,1)

13 Espresso Group Consolidated Cash Flow Statement Jan-Sep Jan-Sep ( million) OPERATING ACTIVITIES Net profit (loss) for the period, including minority interests 41,4 26,4 Adjustments: - Depreciation, amortisation and write-downs 27,7 28,5 - Fair value stock option 1,9 1,4 - Net change in provisions for personnel costs (4,6) (3,3) - Net change in provisions for risks and charges 0,4 (10,1) - Losses (gains) on disposal of fixed assets (2,6) (0,0) - Losses (gains) on disposal of investments and securities 0,1 0,2 - Adjustment for investments valued at equity 0,0 0,1 - Dividends (received) (0,0) (0,0) Self-financing 64,1 43,2 Changes in current assets and other flows 19,2 13,4 CASH FLOW FROM OPERATING ACTIVITIES 83,4 56,6 of which: Interest received (paid) 0,4 0,9 Income taxes (paid) received (14,0) (26,9) INVESTING ACTIVITIES Outlay for purchase of fixed assets (20,7) (20,4) Outlay for purchase of investments (2,2) (0,0) Received on disposals 4,8 0,4 (Purchase) sale of marketable securities, available-for-sale assets (6,4) 11,7 Dividends received 0,0 0,0 CASH FLOW FROM INVESTING ACTIVITIES (24,4) (8,3) FINANCING ACTIVITIES Increases in capital and reserves 0,6 - (Purchase) sale of own shares (3,9) (1,6) Issue (repayment) of bonds (10,6) (28,8) Issue (repayment) of other financial debt (7,0) (5,5) (Dividends paid) (29,8) (25,0) Other changes (0,3) (0,0) CASH FLOW FROM FINANCING ACTIVITIES (51,0) (60,9) Increase (decrease) in cash and cash equivalents 8,0 (12,6) Cash and cash equivalents at beginning of the period 134,5 141,4 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 142,4 128,8

14 Espresso Group Consolidated Net Financial Position 30-set 31-dic 30-set ( million) Financial receivables from Group companies 0,2 0,2 0,2 Financial payables to Group companies Cash and bank deposits 142,4 141,3 132,2 Current account overdrafts (0,2) (0,0) (3,6) Net cash and cash equivalents 142,4 141,4 128,8 Marketable securities and other financial assets 67,8 48,7 40,9 Bond issue (277,4) (261,7) (241,4) Other bank debt (45,1) (38,5) (33,4) Other financial debt (0,2) (0,1) (0,0) Other financial assets (liabilities) (254,9) (251,6) (233,9) NET FINANCIAL POSITION (112,4) (110,2) (105,1)

15 Notes to the Interim report at September 30, 2012

16 Gruppo Editoriale L Espresso Interim report at September 30, 2012 NOTES TO THE INTERIM REPORT OF THE BOARD OF DIRECTORS AT SEPTEMBER 30, 2012 Foreword This interim report of the Board of Directors of the Espresso Group at September 30, 2012, which has not been subject to audit, was prepared in accordance with IFRS international accounting standards. The valuation criteria applied to the statement of financial position and income statement are in line with those adopted in the financial statements at December 31, The interim report was prepared in accordance with Art. 154 ter, subsection 5 of the Italian Consolidated Law on Finance ( TUF ). Therefore the international accounting standards for interim financial statements (IAS 34 Interim Financial Reporting ) were not adopted. Scope of consolidation There has been no change to the consolidation area since the end of the first nine months of With regard to the subsidiaries, in October 2011 (but with backdated effect to January 1, 2011), the transaction for the incorporation of the former Editoriale FVG SpA within Finegil Editoriale SpA was finalised; the absorbed company is the publisher of the newspapers Il Piccolo in Trieste and Messaggero Veneto in Udine and Pordenone. During the same month, Finegil Editoriale acquired the business segment relating to the newspaper Corriere delle Alpi, sold in the province of Belluno, from S.E.T.A. SpA. 16

17 Gruppo Editoriale L Espresso Interim report at September 30, 2012 INCOME STATEMENT Revenues Jan.-Sep Jan.-Sep Circulation revenues Advertising revenues Other revenues TOTAL REVENUES The performance of circulation and advertising revenues has already been fully discussed in the first part of the report, to which reference should be made. The increase of 3.3 million in other revenues is due to the additional revenues from the rental to third parties of digital terrestrial TV bandwidth. Other operating income /(charges) Other operating income/(charges) include contingent assets and liabilities, gains from asset disposals, the various forms of grants as well as the provisions to risk reserves and the writedown of receivables. At September 30, 2012 the item amounted in total to 2 million in net charges compared with 3.4 million in the same period last year. Purchases Jan.-Sep Jan.-Sep Cost of paper (55.2) (48.8) Other production purchases (16.3) (17.7) TOTAL PURCHASES (71.5) (66.5) The cost of paper decreased by 6.4 million (- 11.6%) when compared with the same period last year, essentially due to the reduction in the circulation of daily publications and periodicals of the Group as well as the minor quantities of collateral initiatives produced in paper format. Other production purchases, which include printing materials (ink, inking slabs and film) and the purchase costs for add-ons products were up 1.4 million (+8.7%) due to the additional volumes of add-on products purchased, as well as the increase in costs for the printing materials due to the extension to full colour for all the local papers. 17

18 Gruppo Editoriale L Espresso Interim report at September 30, 2012 Services received Jan.-Sep Jan.-Sep Printing costs (40.9) (36.1) Promotions (13.2) (16.7) Distribution costs (19.3) (19.5) Publisher fees (28.0) (25.7) Agent and agency fees (27.6) (23.7) Rights (15.1) (11.0) Other operating costs (122.8) (119.1) TOTAL SERVICES RECEIVED (266.9) (251.8) Printing costs, which include outsourced production processing for Group dailies and periodicals and related add-on initiatives, totalled 36.1 million, down 4.8 million (-11.6%) when compared with the first nine months of 2011 due to both the minor quantities produced and the additional efficiencies obtained with regard to services rendered by third party suppliers. Promotional costs increased 3.6 million with respect to the first nine months of 2011 as a consequence of the costs incurred for the La Repubblica delle idee event, held in Bologna in mid June, and for the event organised at the end of January to celebrate 30 years of Radio Deejay. Distribution costs, amounting to 19.5 million, remained more or less unchanged with respect to the same period in Publisher fees, amounting to 25.7 million, include amounts for advertising revenues of the Group concessionaire, A. Manzoni & C., charged back to third party publishers. Rights include royalties paid for add-on product publishing and for radio and television rights. The 4.1 million drop from the figure for the same period in 2011 is due to lower rights being paid to produce the books, CD and DVD series sold through La Repubblica and L Espresso. The 3.8 million decrease (-3.1%) in other operating costs compared to the first nine months of 2011 is attributable to the additional measures undertaken to contain general expenses, which have made it possible to offset the increase in costs for the development of the activities on digital platforms (web, mobile and tablet) and for operating digital terrestrial TV systems. 18

19 Gruppo Editoriale L Espresso Interim report at September 30, 2012 Personnel costs Personnel costs totalled million, down 9.3 million (-4.6%) with respect to the same period last year, thanks to the additional action for staff cuts that allowed the absorption of contractual pay indexing. Depreciation, amortisation and write-downs This item amounts to 28.5 million, up 0.8 million on the first nine months of Since 2012, the item also includes the amortisation of the TV rights acquired from Disney amounting in the period to 0.7 million which, as per sector practices, has been capitalised under intangible fixed assets. Net financial income /(expense) Net financial expense amounted to 8.9 million compared with 10.8 million in the first nine months of last year; the decrease of 1.9 million is essentially due to the lower expense on the bond loan further to the repurchases made during the period. 19

20 Gruppo Editoriale L Espresso Interim report at September 30, 2012 STATEMENT OF FINANCIAL POSITION Intangible assets, amounting to million, rose 4.7 million when compared with December 31, 2011 ( million) mainly as a result of the capitalisation, carried out according to sector practices, of the TV rights acquired from Disney made available during the first nine months of the year. Property, plant and equipment amounted to million, down by 13.1 million compared to the end of 2011 ( million), as a result of net investments for the period of 14 million and depreciation charges of 27 million. Investments amounted to 31.3 million, more or less in line with December 31, 2011 ( 31.4 million). Non-current receivables, amounting to 1.1 million and consisting of security deposits, remained unchanged with respect to December 31, Deferred tax assets amount to 25.2 million and include temporary differences between amounts recorded in the financial statements and those recognized for tax purposes. The reduction of 3.8 million with respect to the balance of 28.9 million at December 31, 2011 is mainly the result of the use of prior losses by the subsidiary Elemedia. Inventories amount to 18.9 million and include inventories of paper, printing materials, publications and add-on products. The decrease of 3.1 million with respect to December 31, 2011 is due to targeted inventory rationalisation activities, which is leading to a significant reduction in quantities of paper and materials in stock. Trade receivables amount to million, down 50.9 million on December 31, 2011 mainly as a result of the drop in advertising revenues. Marketable securities and other financial assets amount to 40.9 million, up 7.8 million on December 31, 2011, following the purchase of securities during the period, only partly offset by the revaluation of the outstanding portfolio. Tax receivables amounted to 18.4 million, up 7.8 million with respect to the 10.5 million at December 31, 2011 mainly due to the effect of the IRES and IRAP credit accrued in the period; at December 31, 2011, advances were in fact reported net of the theoretical tax liability, while at September 30, 2012 the tax receivable emerging at the time of payment of the first advance instalment and the tax payable were reported separately. This effect was only partly balanced by the netting, for a total of 8.6 million, between amounts due from the tax authorities and the tax bill referring to the years 1993 and 1994, in relation to which the Company has an appeal outstanding; the amount netted was therefore recorded under Other receivables. Other receivables amount to 26.8 million and include advances to suppliers, agents and freelance associates, prepaid rent and prepaid distribution rights for add-on products and radio/tv programmes to be launched in the last quarter of the year. The increase of

21 Gruppo Editoriale L Espresso Interim report at September 30, 2012 million with respect to December 31, 2011 is essentially attributable to the amount receivable following the appeal as indicated above. Cash and cash equivalents amounted to million, down 9 million on December 31, The reduction is firstly due to the transaction for the partial repurchase of Group bonds maturing in October 2014 for an equivalent nominal value of 28.8 million, at a price equating to 99.85% of the nominal value. Secondly, the positive cash flow from operations, equal to 56.6 million, was more than absorbed by the payment of dividends for 25 million, the purchase of own shares for 1.6 million and the other investing and financing activities, amounting to a total of 10.3 million. Shareholders Equity at September 30, 2012 amounted to million ( 565 million at December 31, 2011), of which million belonging to the Group ( million at the end of 2011), and 1.7 million relating to minority interests (unchanged from December 31, 2011). Own shares held by the parent company at September 30, 2012, whose value is subtracted from shareholders equity, were 14,554,969, representing 3.55% of the share capital. Non-current financial debt amounted to million and included 300 million (now decreased to a nominal value of million further to repurchases and the related cancellations) of bonds issued on October 27, 2004, as well as the residual value of subsidized 10-year loans extended in the last quarter of Provisions for current and non-current risks and charges amounted in total to 68.9 million, down by 10.1 million with respect to December 31, 2011 mainly as a result of the release of a tax-related provision associated with share beneficial interest transactions; this release took place further to the sentence of the Supreme Court of Cassation which declared the trial in which the Company and the Tax Authorities were involved with regard to the dispute on beneficial interests for 1992, as discharged. With regard to the disputes relating to the other years under dispute (1991, 1993 and 1994), the provisions present at December 31, 2011 remain, since the Company has not changed its opinion on the degree of risk attributed to the same. Employee termination indemnities and other retirement benefits amounted to 64.8 million in total ( 68.1 million at December 31, 2011). The 3.3 million decline is due to the employee termination indemnities and fixed indemnities for managers of newspapers paid out in the period ( 6.4 million), offset only in part by the financial effect of the valuation of provisions (interest cost) and the discounted-back value of accruals relating to Fixed Indemnities (service cost), equal in total to 3.1 million. Deferred tax liabilities amount to million ( million at December 31, 2011) and include 36.6 million relating to the tax impact of the recording of TV broadcasting frequencies. 21

22 Gruppo Editoriale L Espresso Interim report at September 30, 2012 Current financial debt, totalling 28.2 million, recorded a 13 million increase compared to the figure for December 31, 2011, primarily due to the effect of accrued interest payable on the bond loan and on subsidized loans. Trade payables amounted to million, involving a decrease of 23.1 million essentially linked to the lower costs incurred during the third quarter of 2012 when compared with those in the last few months of Tax payables, amounting to 27 million, reported a reduction of 4.7 million at December 31, 2011 due to the effect of the payment to the Parent Company CIR, as part of the tax consolidation scheme, of the residual debt relating to the previous year, only partly offset by the IRES and IRAP tax amounts due accrued in the period. You are in fact hereby reminded that in all the interim accounts, tax receivables and payables accrued in the period are reported separately. Other payables amount to 69.1 million, down 6.6 million on 75.7 million at December 31, 2011, mainly due to the settlement of employee termination indemnities to supplementary pension funds, offset only in part by payables to personnel for thirteenth monthly wage. 22

23 Certification pursuant to Art. 154bis, paragraph 2 of Italian Legislative Decree No. 58 dated February 24, 1998

24 Gruppo Editoriale L'Espresso Spa Certification pursuant to Article 154 his, paragraph 2 of Italian Legislative Decree No. 58 dated February 24, 1998 The undersigned Gabriele Aquistapace, Executive appointed to draw up the company accounting documents of Gruppo Editoriale L'Espresso S.p.A., certifies, having also considered the provisions of Article 154 bis of Italian Legislative Decree No. 58 dated February 24, 1998 that the accounting disclosure contained in the interim report of Gruppo Editoriale L'Espresso S.p.A. at September 30, 2012 complies with the documental results, the books and the accounting records. Rome, October 24, 2012 Gruppo Editoriale L'Espresso SpA. Registered office Via Cristofaro Colombo n Rome, Italy Tel. 06/84781 Fax 06/ Share capital Euro 61,534, fully paid-in. Rome Ec. and Admin. Repertoire No VAT No Tax Code and Rome Companies' Register enrolment No Company subject to the management and coordination of CIR SpA