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Mediaset: Board approves Results of the First 9 months of 2009

Mediaset Board Meeting 10 November 2009


BOARD APPROVES RESULTS OF THE FIRST 9 MONTHS OF 2009

Consolidated Results
Net revenues: EUR 2,652.1 million
Net profit EUR 184.2 million

Italy
Net revenues: EUR 2,220.7 million
Net profit: EUR 156.0 million
Television costs: -3.7%
Mediaset Premium pay TV revenues +63.6%
Ratings: Canal 5 Italy's most popular channel in the 24-hours
Mediaset channels confirm leadership
in the 15-64 year-old audience

Spain
Net revenues: EUR 432.2 million
Net profit: EUR 62.2 million
Operating profitability: 19.1%
Ratings: Telecinco Spain's leading channel in prime time


The Board of Directors of Mediaset, met today under the Chairmanship of Fedele Confalonieri, to approve the company's quarterly report to 30 September 2009.

Also during the third quarter of this year the Group's results continued to be affected, particularly in Spain, by the deep recession in the world economy. A generalised difficulty that has led to a marked fall in advertising investments in the two countries in which the Mediaset Group operates.

In this context, the Group in Italy was nevertheless able to contain the fall in advertising revenues compared with its competitors, while consolidating its market share. In terms of ratings, leadership was confirmed in the commercial target of reference and the absolute primacy of Canale 5 across the entire TV audience in the current autumn guarantee period.

Moreover, strenuous efforts to control TV costs and the excellent performance of Mediaset Premium have made it possible to significantly mitigate, above all in Italy, the negative impact on margins created by the reduction in advertising revenue.


MEDIASET GROUP: CONSOLIDATED RESULTS

Performance in the first nine months of 2009 can be summarised as follows:

  • the Mediaset Group's consolidated net revenues amounted to EUR 2,652.1 million a reduction of 11.4% on the EUR 2,993.9 million of the first nine months of 2008.
  • the Group's EBIT came to EUR 380.9 million, compared with EUR 705.2 million in the first nine months of the previous year.
  • operating profitability was 14.4%, compared with 23.6% in the first nine months of 2008.
     
  • profit before taxation and that attributable to third-party shareholders, amounted to EUR 329,4 million compared with EUR 609.0 million to 30 September 2008.
  • net profit attributable to the Group came to EUR 184.2 million, compared with the EUR 355.8 million of the first nine months of the previous year.
  • the Group's net financial position went from - EUR 1,371.7 million on 31 December 2008 to - EUR 1,601.5 million on 30 September 2009.
  • in the first nine months of the year net cash generation amounted to EUR 300.3 million compared with EUR 548.4 million in the first nine months of the previous year.

It should be noted that, following the partnership agreement finalised on 30 June 2009 between RTI SpA and the private equity fund 21 Partner, the Mediaset Group's stake in Medusa Cinema SpA and Mesusa Multicinema SpA (businesses that in the first nine months of 2008 generated revenues of EUR 35.6 million) has gone from 100% to 49%.
Consequently the consolidated financial statements, both for the first half of 2008 and the first half of 2009 have been reclassified to show separately the contribution of these businesses and the economic impact of the operation.


A BREAKDOWN OF RESULTS BY GEOGRAPHIC AREA

Italy

  • In the first nine months of 2009 consolidated net revenues amounted to EUR 2,220.7 million, a fall of 1.7% on the EUR 2,259.5 million of the same period of the previous year. In the third quarter revenues grew by 2.5% thanks to the excellent performance of Mediaset Premium and a combination of other non-television activities (including Mediashopping and film distribution).

    gross television advertising revenues came to EUR 1,823.0 million, a fall of 10.8% on the EUR 2.043,2 million of the first nine months of 2008. This result highlights the progressive improvement achieved during the second and third quarters. In particular, in the third quarter revenues recorded a more limited fall of -7%.
    According to Nielsen data for the first nine months of the year, the trend in advertising sales for Mediaset channels was markedly better that the overall trend in the advertising market as a whole (-18.4%) and the television advertising market (-17.4%), both net of Mediaset's contribution.

    Mediaset Premium revenues: total revenues generated by Mediaset Premium came to EUR 379.9 million, compared with EUR 269.5 million in the first nine months of 2008 (+41.0%). Revenues from the characteristic business (sale of cards, recharges and Easy Pay) were up by 63.6%.
    Active cards as of 30 September 2009 totalled around 2.9 million, compared with around 2.5 million in the same period of the previous year. A more than brilliant achievement, given that by 30 June 2009 more than 2 million Premium cards has expired.
  • EBIT came to EUR 298.4 million, compared with the EUR 380.9 million of the first nine months of 2008, a reduction of 21.7%.
  • Total television costs were down by 3.7% compared with the first nine months of 2008. In the third quarter there was a reduction of 5.9% compared with the same period of last year. This result confirms the scrupulous efficiency policy that reduces costs without having a negative impact of the appeal of the schedule or on the ratings of the Mediaset channels.
  • net profit amounted to EUR 156.0 million, compared with EUR 248.5 million for the same period of the previous year.

TV ratings: in the first nine months of the year Mediaset channels confirmed their national leadership in all the time bands among viewers in the 15 to 64 year-old age range (the commercial target). During the period, Mediaset recorded a 41.4% share in prime time and 41.6% in the 24 hours.
Canale 5 is Italy's most popular channel in the commercial target, both in prime time (23.5%) and in the 24 hours (22.3%). And at 20.8%, the channel confirmed its position as the leading channel in the 24 hours during the guarantee period (6 September - 9 November 2009).


Spain

  • In the first nine months of 2009 consolidated net revenues generated by the Telecinco Group came to EUR 432,2 million, compared with EUR 734.9 million in the same period of the previous year. This result was obviously due to the impact of the unfavourable trading and financial climate, at both a national and international level, which in Spain has been particularly dramatic.
  • Despite this difficult background, there was a reduction in total costs of 14.8% compared with the same period of the previous year. This trend was also affected by the use of risk provisions booked in the first half of the year. Net of these measures, the reduction was of 7.8%, thanks to rigorous actions aimed at containing both scheduling and management costs.
  • EBIT for the period came to EUR 82.5 million, compared to EUR 324.3 million in 2008.
  • Operating profitability was 19.1% (44.1% in the first nine months of 2008).
  • Pre-tax profit came to EUR 58.5 million, compared with EUR 292.4 million the previous year.
  • Net profit amounted to EUR 62,2 million compared with EUR 228.4 million for the first nine months of 2008.
  • TV ratings: Telecinco consolidated its position as Spain's absolute leader with a prime time share of 16.8%.


FORECAST FOR THE FULL YEAR

Despite what is expected to be a slight improvement in the short term, the economic scenario, as far as advertising investments are concerned in both Italy and Spain,  is expected to remain extremely difficult for the remainder of the year.

In Italy, at the end of the first ten months of the year, gross advertising revenues for Mediaset channels had recorded a fall of 10.2%, compared with the -10.8% recorded at the end of nine months.
In the same period, total advertising sales, in other words including other media sold in concession by the Group, recorded a fall of 9.6% (-10.3% after nine months).

In line with the trends recorded in the second and third quarters, current evidence suggests that advertising sales in the last two months of 2009, which will be compared to the most critical period of the previous year, will continue to show an improving trend compared with the previous nine months of the year.

In the light of such trends, the results at the end of the first nine months, despite continued efforts to control television costs in recent months, at year end the Group is expected to post operating and consolidated net profits markedly lower than those of the previous year.


The executive responsible for the preparation of the Mediaset S.p.A. accounts, Andrea Goretti, 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 10, 2009

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