Arnoldo Mondadori Editore S.p.A. · MIL:MN
Arnoldo Mondadori Editore — FY2010 Earnings Presentation
56 slides from Arnoldo Mondadori Editore's earnings presentation, Mar 21, 2011
Slide 1: Full Year Results 2010
Full Year Results 2010 Analyst’s Meeting Segrate, 21 March 2011
Slide 2: Key takeaways for 2010
Key takeaways for 2010 All All Mondadori Mondadori businesses outperformed their businesses outperformed their reference reference markets markets Fully Fully achieved achieved all all targets, targets, indicated indicated in in 2010; 2010; related related to to the the restructuring, restructuring,
Slide 3: Profit and loss FY2010
Profit and loss FY2010 Fv09 Fv10 Revenues 1,540.1 1,558.3 1.2% Labor costs (302.8) (271.5) -10.3% Cost of sales (1,131.1) (1,146.6) 0.9% EBITDA 106.2 140.2 32.0% Depreciation (34.4) (26.0) -23.5% EBIT 71.8 114.2 59.1% Financial charges (22.4) (23.9) Financial gains 14.5 ss4 - Profit before taxes 63.
Slide 4: From EBITDA reported to EBITDA adjusted
From EBITDA reported to EBITDA adjusted Strong EBITDA growth compared to 2009 also net of non recurring item €m 11.3 (0.7) 165.8 15.0 140.2 EBITDA Restructuring/ JVs results/ Capital Gains EBITDA FY 2010 Postal charges Non recurring adjusted 2010 +32.8 business 34.7 (6.7) (1.2) 133.0 106.2 EBITDA Re
Slide 5: Cost saving plan evolution
Cost saving plan evolution -690 Restructuring plan continued in 2010 together with the reorganization 4,112 -328 reaching in the year a reduction of -328 3,925 headcounts (approx. 700 in the three 3,750 years period). Further improvement 3,422 expected in 2011 Reached 93% of cost saving plan forecas
Slide 6: NFP and Covenants evolution
NFP and Covenants evolution In 2010 NFP improved by €30.5m to (€342.4m) Approx. €200m total debt reduction in the 2008-2010 680.1 714.5 518.3 473.9 535.3 566.8 NFP 372.9 393.0 454.2 342.4 416.9 358.2 .369,0 3.26 2.30 2.71 2.22 3.51 2.44 2.82 3.16 2.62 2.83 covenant 2.24 2.62 FY07 I Q08 II Q08 III Q0
Slide 7: Books: market highlights
Books: market highlights Total market +1.8% by value in 2010 Leadership confirmed with 27.1% market share Quality of the offer with the award of the following prizes: Strega (Pennacchi), Campiello (Murgia), Nobel (Vargas Llosa) Ebook catalogue: 1,500 titles (as of today over 1,700) distributed by al
Slide 8: Books: financial highlights
Books: financial highlights Trade revenues slightly below last year, but better 2 half (+2.5% vs 2H-’09) The decrease in Educational revenues is mainly due to the recent introduction of the school reform Adj. EBITDA for non recurring items mainly related to Mondadori Random House results (Mexico & V
Slide 9: Magazine Italy: market highlights
Magazine Italy: market highlights Circulation Circulation market market (copies) (copies) -5.8% -5.8% Circulation Circulation Mondadori Mondadori -4.8% -4.8% magazine (copies) magazine (copies) Others 17.7% Mondadori Espresso 34.2% Advertising Advertising market market (value) (value) -5.4% -5.4% 3.
Slide 10: Magazine Italy: financial highlights
Magazine Italy: financial highlights Revenues decline by 4.1%, in line with the market The strong Adj. EBITDA growth for non recurring items (postal charges, restructuring and Attica JV devaluation) is mainly related to: − cost reduction plan − good profitability of all magazines and an increase in
Slide 11: Magazine France: market highlights
Magazine France: market highlights Total revenues +0.2% including magazines closed or disposed of , the growth is for: − Advertising +4.1% (+19% Grazia included) − Circulation +1.7% (+3.9% Grazia included) Results better than the market − Total +1.3% (+6.2% Grazia included) Strong growth in adj. EBI
Slide 12: Advertising: market highlights
Advertising: market highlights Total advertising market +3.8% compared to 2009 thanks to good results in TV, Radio (7.7%) and internet (+20.1%) while magazines continue to suffer Among all segments , best performance is registered by the female segments (fashion & cosmetics) while autos, tourism and
Slide 13: Advertising: financial highlights
Advertising: financial highlights Revenues decline by 6.6% due to − Expiration of the IL Giornale advertising collection -6.6% − Move to Mediamond JV the internet 250.4 advertising 233.9 Other rev. 21.8 − collection 8.1 Radio 25.5 − Reduction of third parties adv. collection 29.7 Magazine third part
Slide 14: Direct & Retail: financial highlights
Direct & Retail: financial highlights +30.2% Strong revenue growth thanks mainly to: 279.7 Other rev. 3.3 Mondolibri consolidation (May 2010), 58.1 increase of CEMIT +14,3% and Franchising 214.8 Direct 20.9 +9.2% E commerce revenues with Bol.it increase strongly +28% compared to last year 218.3 Reta
Slide 15: Radio: financial highlights
Radio: financial highlights Advertising Radio Market registered +7.7% compared to 2009 confirming a positive trend +5.1% Revenues increased by 5.1% compared to last year with 2H better than the total market 14.5 Profitability at EBITDA level continue to 13.8 improve reducing losses to €-1.2m (€-3.3m
Slide 16: Proposal to AGM
Proposal to AGM \. s achieved the Board resolved the AGM approves a dividend € per share and cancellation of 5% of Mondadori share capital 16
Slide 17: Three years plan overview: Introduction
Three years plan overview Introduction M. Costa (CEO) 17
Slide 18: Our Goals … our Strengths
Our Goals … our Strengths Confirm Mondadori’s leadership in its reference markets continuously improving quality and product innovation Develop a business model focused on continuous expansion of its core business, based on coherent diversification with, in line with the Mondadori approach Consolida
Slide 19: Our Goals … our Strengths
Our Goals … our Strenghts … a solid financial position recorded in 2009 and consolidated in 2010 IN preparation for: - Develop a consistent dividend policy over time - Take advantage of the consolidation process in both traditional and digital businesses 19
Slide 20: Books
BOOKS R. Cavallero (GM Trade Books) 20
Slide 21: Books: Actions
Books: Actions Confirm our leadership in Italy with a 27-30% market share both in paper books andBOOKS in ebooks where Mondadori is a first mover (Telecom Italia, Google, etc) Reliable and extensive talent scouting (almost all authors have signed agreements for both paper and digital rights) Re-bala
Slide 22: Books: market evolution
Books: market evolution % on total CAGR 0,9% CAGR 2,7% Source: IDPF, Cefriel, AIE Editech 22
Slide 23: Cost Structure evolution
Cost Structure evolution Cover Cover Cover MAGAZINEAvg. IT Price 20 € Avg. Price 12 € Avg. Price 12 € Author 11% 20% Production 8% 31% Author Marketing 3% 2% 2% 5% Distribution 2% Inventory 1% Production 3% Marketing Retail 39% 42% 20+10% Retail Returns 20% 31% 35% Publisher Publisher 15% 23
Slide 24: Books: Targets
Books: Targets Sales to grow in line with market trend (increasing weight of trade books) BOOKS Education is expected to recover from 2013 thanks to the new adoptions e-book contribution will gradually pick up reaching 7-10% of total sales Profitability is expected to remain high thanks to: − Confir
Slide 25: Magazine Italy
BOOKS MAGAZINE ITALY S. De Alessandri (GM Magazine Italy) 25
Slide 26: Italian Magazine Portfolio (1/2)
Italian Magazine Portfolio (1/2) 35% market share, 35 magazines 3,1 Mio. copies sold weekly, 2,8 monthly, 192 million yearly 17,6 Mio. weeklies readers, 16 million monthlies readers One out of 2 Italians reads a Mondadori magazine every week o months Mondadori publishes the best seller and the most
Slide 27: Italian Magazine Portfolio (2/2)
Italian Magazine Portfolio (2/2) Tv guides Leader TV Sorrisi e canzoni, Tele+, Guida TV, Weeklies women Leader Donna Moderna, Chi Grazia, Tu Style, Confidenze Newsmagazines Leader Panorama Science Leader Focus Interior decoration Leader Casaviva, Casa Facile, G Casa, Interni, Casabella, Ville & Giar
Slide 28: Magazine & Advertising Italy: Actions
Magazine & Advertising Italy: Actions Confirm: − Market leadership in weekly magazines (80% of total) − “Best in class” in adds on sale increasing market share − No magazines with negative profitability Renewal/ repositioning of all existing magazines without significant investments Develop synergie
Slide 29: Magazine & Advertising Italy
Magazine & Advertising Italy Advertising Uncertainties but sign Stable rates. Recovery expected of improvement over time MAGAZINE IT Circulation Limited decline Product reshaping Adds on sale Structural decline 40% market share Focus on home video, music, book and gadgets Leverage on existing relati
Slide 30: Magazine & Advertising Italy
Magazine & Advertising Italy MAGAZINE IT Sales to grow in line with market trend Adds on sales decline below market expectations Break even of digital activities Profitability expected to improve thanks to cost controls 30
Slide 31: Digital
BOOKS DIGITAL V. Veltroni (GM Digital) 31
Slide 32: Digital Division Goals
Digital Division Goals − Increase, through customer knowledge and intelligence, the company’s ARPU − N. 1 in female digital segment − N. 1 in digital cultural consumption − N. 1 in tablet specific products − Enter new areas arising from customer intelligence 32
Slide 33: Customer at the center
Customer at the center We build customers’ narrative MAGAZINES EDUCATION DIGITAL BOOKS RETAIL Data Info Data Info Data Info Data Info Data Info Business Intelligence CRM Customer Database 33
Slide 34: How to increase ARPU
How to increase ARPU Increasing the number of € interactions with the € customer € Increase the € amount of time spent in each interaction € € Increase the depth of interaction to gather more € € data 34
Slide 35: To grow Mondadori digital activities
To grow Mondadori digital activities Italian digital peculiarity In 2010, 70% of Italians used Internet (65% from home), only 30% on daily basis +44% users from mobile/smart phone/IPAD (13% of population) Only 30% had broad band from home. As of today around 600k IPAD sold in Italy Digital revenues
Slide 36: N. 1 in female digital segment
N. 1 in female digital segment Develop a segmented, international offer aimed at our female customers using the breadth of our properties; Launch or Relaunches : − New Grazia − Relaunch Donna Moderna − New video cooking channel − Relaunch Cosmopolitan − Tustyle as social brand − Introduce high stree
Slide 37: N. 1 in digital cultural consumption
N. 1 in digital cultural consumption Transforming BOL from an online shop to an online cultural consumption experience New editorial contents, social engagement and live events THE ITALIAN Enrich product categories (digital movies, CULTURAL ticketing) CONSUMPTION Stimulating users in displaying cult
Slide 38: N. 1 in Apps development
N. 1 in Apps development Adding new distribution platforms (Android and Samsung TV) Build on serial approach for apps: − Virtual History: Rome (already on sale: as of today 11.900 downloads), Venice, Florence, Milan, and the last supper − Collectibles: Soldiers, Paintings and Personalities − Cooking
Slide 39: Financial goals
Financial goals Quick organic growth to reach Digital Division break-even in 2013 Quick organic growth to reach cruising speed in 5 years producing at least 15% on Group revenue and... Evaluate accelerating organic growth through acquisitions in the years 2011-2013 39
Slide 40: International
INTERNATIONAL & R. Briglia (Chief Content Officier) 40
Slide 41: Mondadori France
_A\ MONDADORI FRANCE 41
Slide 42: International businesses: France … 4 pillars
International businesses: FRANCE …4 pillars Grazia success as the most innovative and successful launch of the last 15 years − Major driver of the transformation of Mondadori France as: • Revenue growth driver in highly profitable segment (women upscale) • New revenue mix reducing weight of TV Guide
Slide 43: France: targets
France: targets MAGAZINE IT Sales overperforming market trend − increasing contribution of advertising focusing on upscale female segment (Grazia and BIBA to contribute to 35% by 2013 in adv revenues from 27% in 2010) Digital contribution will peak over the period (>5% of total sales) Strong improve
Slide 44: Mondadori International
AN OBMYAM NOAAPBLLM CES3OHbT HA VSHEHADMTE 3ANOUBA f
Slide 45: International: International Network
International: International Network In only six years the fastest growing network among global players MAGAZINE IT 45
Slide 46: International: Grazia International network
International: Grazia International network 15 editions in the world Total turnover over Euro 100 million Investments in “BRIC” countries. Russia, China, India, already existing, Brazil in 2012 By 2015 additional countries to reach a total of 25 Reinforcing the European footprint (Poland / Spain) De
Slide 47: International: Focus on China
International: Focus on China By 2012 launch of weekly edition of Grazia (currently fortnightly) Exploit the advertising booming market (+12% in 2011) mainly in fashion and cosmetics Distribution development in 2nd tier cities By 2011 launch of Grazia Web site and mobile version Create the “Grazia S
Slide 48: International
International MAGAZINE IT Further strong growth of sales Maintaining the current profitability (59%) in licensing Positive EBITDA of Russia and China JVs by end of 2012 48
Slide 49: Conclusion
BOOKS Conclusion M. Costa (CEO) 49
Slide 50: Our targets
Our targets Forecasted sales include only organic growth - BOOKS Traditional business in line with market trend - Digital to progressively pick up boosting at the end of the period While is more performing both in terms of profitability and value creation: Safeguarding profitability of core business
Slide 51: Annexes
Annexes 51
Slide 52: 2010 Net debt evolution
2010 Net debt evolution 372.9 342.4 21.2 47.8 116.3 6.7 6.1 11.3 35.1 Net debt Cash flow WK / others Taxes Mondolibri Treasury Investi- Cash out Net debt 2009 shares ments ristrutturing 2010 52
Slide 53: Results by business units
Results by business units Revenues 2009 - 2010 EBITDA reported roo | ev10 roo | vio | A Books 423.1 413.9 -2.2% Books 81.5 68.7 (12.8) Magazine Italia 491.8 471.4 -4.1% Magazine Italia 28.4 48.4 20.0 Magazine Francia 343.5 344.2 0.2% Magazine Francia 13.0 28.6 15.6 Advertising 250.4 233.9 -6.6% Adve
Slide 54: Market evolution by segment/country
Market evolution by segment/country Sector in term of FY09 1Q10 1H10 9M10 FY10 Books Trade Value 1,8 ND 1,8 1.7 1.8 Magazines circulation Volume (6.7) (10.6) (9.3) (9.1) (5.8) Add sales Value (22.1) (32.5) (30.8) (22.0) (23.6) Magazine advertising Value (28.7) (10.3) (9.3) (8.4) (5.4) Radio advertis
Slide 55: Disclaimer
Disclaimer Certain statements contained herein may be statements of future expectations and other forward-looking statements based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ mate
Slide 56: Forthcoming events
Forthcoming events 21 April 2011 Annual General Meeting 9 May 2011 Q1-11 Results 27 July 2011 H1-11 Results 10 November 2011 9M-11 Results Dario Dario Fumagalli Fumagalli Head Head ofof Investor Investor Relations Relations Tel. Tel. +39 +39 0202 7542.3695 7542.3695 Mobile Mobile +39 +39 3355638019
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