H1 2013 Results July 31, 2013
Disclaimer This presentation contains statements that constitute forward-looking statements based on Il Sole 24 ORE S.p.A. s current expectations and projections about future events and does not constitute an offer or solicitation for the sale, purchase or acquisition of securities of any of the companies mentioned and is directed to professionals of the financial community. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of the customer base, estimates regarding future growth in the different business lines and the global business, market share, financial results and other aspects of the activities and situations relating to the Company. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those expressed in or implied by these forward looking statements as a results of various factors, many of which are beyond the ability of Il Sole 24 ORE S.p.A. to control or estimate precisely. Consequently it is recommended that they be viewed as indicative only. Analysts are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of this presentation. Il Sole 24 ORE S.p.A. undertakes no obligation to release publicity the results of any revisions to these forward looking statements which may be made to reflect events and circumstances after the date of this presentation, including, without limitations, changes in Il Sole 24 ORE S.p.A. business or acquisition strategy or to reflect the occurrence of unanticipated events. STATEMENT The Manager mandated to draft corporate accounting documents of Il Sole 24 ORE S.p.A. Massimo Luca Arioli, attests as per art.154-bis comma 2 of the Testo Unico della Finanza (dlgs.58/1998) that all the accounting information contained in this presentation correspond to the documented results, books and accounting of the Company. 2
Agenda Key Financial Data Financial data by divisions Appendix 3
Il Sole 24 ORE ranks as Italy's leading digital newspaper with 75,900 average digital copies. Total print + digital circulation (ADS figures May 2013) reaches 300,100 average copies and strengthens Il Sole 24 Ore s position as the third most widely-read newspaper in Italy, gaining 14.2% versus May 2012. The strategic decision to focus on the digital business (fee-based website, Il Sole 24 Ore is the only national daily newspaper to have adopted the metered system, with 8,000 subscriptions as of 30 June, circulation of the digital newspaper, business class offering, new products), together with the measures taken to streamline costs, products and the production structure (which is expected to come into full effect in the second half of the year), allows the Group to significantly improve (6 million euro) the Publishing Area's margin, net of advertising revenue Group digital revenue grows to 71.6 million euro (36.2% of total in H113 versus 30% of total in H112), driven by revenue from electronic publishing and IT services, by advertising on digital media and by the success of the newspaper's new digital offering. Tax & Legal digital revenue grows (+1.5%) and contributes 55% of the area s revenue (47% in H112), with the value on EBITDA in line with H112. Subscribers specifically to the digital versions of the Group s professional magazines increase by 27% Unique browsers of www.ilsole24ore.com in H113 increase by 16.8% System advertising sales drop by 17.1% but do better than the target market (-18.2%). Internet outperforms the market (-0.3%) gaining 5.3% (Nielsen Media Research January-May 2013) Costs fall by 21.4 million euro versus 1H12, thanks to Management and the whole Company s efforts focused on implementing the plan of action approved by the Board of Directors Radio 24 moves up one notch from 10 to 9 place in the national radio station ranking with 2,134,000 listeners on average day, gaining a position versus the 2012 total figure (+14.3% or 267,000 new listeners) Consolidated revenue amounts to 197.9 million euro, down 13.8%, due mainly to the advertising market trend and, specifically, to the enduring crisis of financial advertising on Il Sole 24 Ore Gross Operating Profit (EBITDA) comes to 13.8 million euro, down 9.6 million euro versus H112, as a result of the drop in consolidated revenue of 31.6 million euro and of the improvement in costs and in other income items for a total of 22 million euro Result attributable to the owners of the Parent comes to -21.3 million euro, down by 12.8 million euro versus H112 Net financial position -37.4 million euro at 30 June 2013. Compared to the first quarter, Group cash and cash equivalents almost double, while working capital absorption reverses the trend 4
Agenda Key Financial Data Financial data by divisions Appendix 5
Key Financial Data 6
Revenues & EBITDA Breakdown Starting from January 2013, the Group reorganized its business areas by reorganizing products and activities: the business unit Publishing and Digital has been established within the wider Publishing area to complete the integration between paper and digital. The division now includes the newspaper publishing division, the digital edition of the newspaper, the new digital products and the web site www.ilsole24ore.com To compare the figures of the two periods on a like-for-like basis, the results of H1 2012 have been reclassified according to the 2013 organisation (*) Other includes Fabbrica24 and E-commerce 7
Agenda Key Financial Data Financial data by divisions Publishing System (Advertising) Professional Publishing Tax & Legal Software Solutions Training & Events Radio Culture Appendix 8
Publishing Starting from January 2013, the business unit Publishing and Digital has been set up to complete the integration between paper and digital. The division now includes the newspaper publishing division, the digital edition of the newspaper, the new digital products and the web site www.ilsole24ore.com Il Sole 24 ORE is the first national digital newspaper with >75.000 average digital copies and it ranks third in ADS national digital and paper circulation with > 300.000 average copies (source ADS Jan May 2013), +14.2% vs. May 2012 Focus on the strengthening of print and paper integration and launch of new paid products aimed at increasing Group s offer: January: launch of the paid version of the web site www.ilsole24ore.com and of new paper subscription offers. As of June 30 th 2013 the web site subscribers were >8.000 and unique users increased by 16.8% vs. H112 April: launch of the subscription offer Business Class, exclusive products and services multiplatform system End of June: launch of Business Class Commercialisti the new platform that collects Group s products for taxation professionals (spanning from newspaper to magazines and data bases) On going release of special issues, e-books and online dossiers focused on tax, labour and welfare reforms and weekly tax and legal in-depth analysis guides to which online forums and radio programs are related Magazine portfolio rationalization led to the closing of English 24 and I Viaggi del Sole Radiocor revenues up 15.2% vs. H112 thanks to the partnership with LSE Group/Borsa Italiana, Bloomberg, VWD, Dow- Jones Factiva and Microsoft-MSN 9
System (Advertising) Advertising yoy by Area vs Market* (*) Source Nielsen Media Research Jan May 2013 for market data (**) Internet revenues net of funds G. 24 ORE Online +5.3% (**) Newspaper - 29.6% Radio - 15.3% VS.. Market - 0.3% - 23.3% -14.6% Despite the negative trend in revenues (-17.1%), System outperforms the reference market (-18.2%) thanks to actions put in place at the end of 2012 to strengthen its position in the market Positive trend in revenues from internet advertising collection: +5.3% vs. market (-0.3%) Negative trend in Radio 24 advertising collection (-15.3%) due to the decrease in expenditure levels of its main clients (car, finance/insurance and professional services industries, which represent 46% of total radio advertising collection) 10
Professional Publishing: Breakdown 11
Professional Publishing: Tax & Legal Decrease in revenues (-12.4% vs. H112) due to the ongoing decline in sales of paper products (-28.2% books, - 24.8% magazines yoy) Increase in business area digital revenues +1.5% (electronic publishing and IT services). Digital Revenues on total business unit revenues shift from 47% in H112 to 55% in H113 Subscribers specifically to the digital versions of the Group s professional magazines increase by 27% Steady profitability (29.7% Ebitda Margin) despite market transition Focus on digital: on going digitalization of paper products and online portfolio products development 12
Professional Publishing: Software Solutions In 2013, the process of integration of all Group software properties under a single company, 24 ORE Software, has been completed Economic turmoil still strongly hits Italian companies and their expenditure levels, thus also affecting the overall division performance (-6.7% in revenues vs. H112), particularly affected by the crisis which involves the construction and SME IT markets Launch of 24ORE Cloud in the month of June: it is a professional marketplace which collects apps and softwares for micro & small enterprises including products and services developed by companies complying with Group s standards. Gruppo 24ORE has been the first publishing company to develop and launch on the domestic market this kind of innovative business model for micro & small enterprises and professionals 13
Professional Publishing: Training & Events Decrease in revenues (-2.7% vs. H112) mostly due to the performance of Annual and Events (-32.5% yoy) and Professionals and SMEs courses (-17.6% yoy) Business school increase in revenues (+3.1%) due to the positive performances of Full Time Masters (+15% yoy) boosted by the launch of new on line masters Part Time Masters in line vs. H112: 62 Specialization Masters, 4 Executive Masters and 4 Master24 classrooms for managers and professionals Increase in revenues for Newton Management Innovation and Newton Lab (+3.3% yoy) due to the acquisition of new clients 14
Radio Radio 24 rises from 10 th to 9 th place in the rank of national radio stations with 2.134.000 average daily listeners (+14.3% vs. 2012,+267k new listeners) Despite decrease in revenues (-14.3% vs. H112), market share in seconds is steady at 9% (source: Nielsen, analysis by seconds) After the launch in February of the new web site, a strong increase in average monthly users has been recorded: approx. 567.000 average monthly users (+99% vs. H112) and average monthly page views >6.9Mn (+28% yoy, source: Nielsen Site Census, March June) 15
Culture Overall revenues at 4.5M down 39.6% yoy mainly due to the impact of the liquidation process of Alinari 24ORE S.p.a. started in August 2012 and a decrease in the number of exhibitions launched in H113 vs. H112 New Art Exhibitions launched in H113: Modigliani, Soutine e gli artisti maledetti (Milano) The Desire for freedom. Arte in Europa dal 1948 (Milano) Manet (Venezia) Homo Sapiens (Novara) 16
Agenda Key Financial Data Financial data by divisions Appendix 17
Key Financial Data 18
Consolidated Balance Sheet 19
Consolidated Cash Flow 20
Consolidated Net Financial Position 21