Press Release: Board of Directors: Results at 30 September 2024 Approved

CorporateNovember 11, 2024 - 13:27

Press Release: Meeting of the Board of Directors of RCS MediaGroup

Results at 30 September 2024 approved[1]

In first nine months, consolidated revenue amounted to € 602.3 million (€ 606.8 million in first nine months 2023, which included non-recurring income of € 1.6 million).

EBITDA, EBIT and net profit grew respectively to € 91.4 million, € 51.5 million and € 32.1 million (respectively € 82.1 million, € 42.8 million and € 27.8 million in first nine months 2023).

Net financial position improves by € 3.7 million versus 31 December 2023, after distributing dividends of € 36.3 million.

At end September, the Group's titles reach an active digital customer base of over 1.1 million subscriptions, 645 thousand for Corriere della Sera, Italy's leading newspaper on newsstands, 246 thousand for Gazzetta, 154 thousand for El Mundo, and 101 thousand for Expansión.

RCS retains its position as the leading online publisher in Italy, with an aggregate figure of 30.9 million average monthly unique users (Audicom August 2024).

Milan, 11 November 2024 - The Board of Directors of RCS MediaGroup S.p.A. met today and reviewed and approved the Interim Management Statement at 30 September 2024.

Income statement (€ millions)	30/09/2024	30/09/2023
Consolidated revenue	602.3	606.8
EBITDA before non-recurring expense/income	92.6	82.7
EBITDA	91.4	82.1
EBIT	51.5	42.8
Net profit	32.1	27.8

Statement of financial position (€ millions)	30/09/2024	31/12/2023
Net financial debt1	19.7	23.4

Group performance

The first nine months of 2024 were dominated by the ongoing conflicts in Ukraine and the Middle East, with their repercussions extending to the economy and trade. These events persist in creating a state of significant overall uncertainty. Against this backdrop, the Group achieved higher margins (EBITDA, EBIT, and net profit) in first nine months 2024 than in the same period of 2023 and continued to generate positive cash flows, improving the net financial position by approximately € 3.7 million versus 31 December 2023, after distributing dividends to the market in May of approximately € 36.3 million. Mention should be made that RCS's seasonality factors generally impact on the income results of the first and third quarters of the year.

The Group's consolidated net revenue at 30 September 2024 amounted to € 602.3 million (€ 606.8 million at 30 September 2023). Digital revenue amounted to approximately € 150.4 million overall and makes for approximately 25% of total revenue.

Advertising revenue in first nine months 2024 amounted to € 237.1 million (€ 239.7 million in the same period of 2023). Total advertising sales on online media amounted to € 98 million in first nine months 2024, reaching approximately 41.3% of total advertising revenue.

Publishing and circulation revenue amounted to € 242.7 million (€ 249.5 million in first nine months 2023), down by € 6.8 million, attributable to a decline in revenue from add-ons (€ -1.9 million), m-dis circulation revenue (€ -3.3 million) for its third-party publisher distribution business, and print circulation revenue, partly offset by growth in digital subscription revenue.

Both Italian newspapers retained their circulation leadership in their respective market segments at September 2024 (ADS January-September 2024). La Gazzetta dello Sport, with the Audipress 2024/II survey, retained its position as the most-read Italian newspaper with 2,086,000 readers, followed in second place by Corriere della Sera with 1,697,000 readers. At end September, the total active customer base for Corriere della Sera (digital edition, membership and m-site) reached 645 thousand subscriptions (595 thousand at end 2023). The customer base of Gazzetta's pay products (which includes G ALL, G+, GPRO and Fantacampionato products) closed at end September 2024 with 246 thousand subscriptions (214 thousand at end 2023) (Internal Source). The main digital performance indicators confirm the top market position of RCS, with the Corriere della Sera and La Gazzetta dello Sport brands which counted, in the period January-August 2024, 29.1 million and 15.6 million average monthly unique users, and in the period January-September 2024, 3.9 million and 2.1 million average daily unique users (Audicom). In first eight months 2024 too, RCS ranks as the top online publisher in Italy with an aggregate figure of 30.9 million average monthly unique users (net of duplications - Audicom). The main social accounts of the Corriere System at 30 September 2024 reached approximately 13.3 million total followers (considering Facebook, Instagram, X, LinkedIn and TikTok - Internal Source). The growth of social profiles also continues for La Gazzetta dello Sport, topping a total social audience of 6.6 million at end September (considering also Facebook, Instagram, X, TikTok and YouTube - Internal Source).

In Spain, Marca and Expansión confirmed their print circulation leadership in their respective market segments at September 2024 too (OJD). The latest survey of Estudio General de Medios confirms, at June 2024, Unidad Editorial's leading position in Spanish daily news reaching approximately 1.6 million overall daily readers with the titles El Mundo, Marca and Expansión. Marca with 950 thousand readers is the most widely-read daily newspaper in Spain, and El Mundo the second among generalists and third among dailies reaching over 500 thousand readers. Digital subscriptions continued to grow, amounting at September 2024 to approximately 154 thousand subscriptions (136 thousand at end 2023) for El Mundo and 101 thousand subscriptions for Expansión (82 thousand at end 2023) (Internal Source). As part of the online activities, elmundo.es, marca.com and expansión.com reached 39.7 million, 81.7 million and 8.9 million average monthly unique browsers in first nine months 2024, comprising both domestic and foreign browsers and including apps (Google Analytics). The international English-language version of Marca achieved 21.1 million average monthly unique browsers at September 2024 (Google Analytics), including in the marca.com browsers mentioned above. The social audience of Unidad Editorial Group titles stands at 11.4 million followers for El Mundo, 19.7 million for Marca and 2.5 million for Telva (considering Facebook, Instagram, X and TikTok) and 1.5 million for Expansión (considering Facebook, Instagram, X, TikTok and LinkedIn) (Internal Source).

Sundry revenue closed at € 122.5 million, increasing by € 4.9 million versus first nine months 2023 (€ 117.6 million). In the comparable period of 2023, Unidad Editorial's sundry revenue included non-recurring income of € 1.6 million.

EBITDA in first nine months 2024 came to a positive € 91.4 million, up by € 9.3 million versus the same period of 2023 (€ +82.1 million). All business areas reported improved margins; specifically, for Newspapers Italy and Unidad Editorial, the improvement in EBITDA is attributable mainly to the growth in margins from digital product circulation, as well as cost reductions, particularly in raw materials (paper). Mention should be made that the Group's seasonality factors generally impact on the income results of the first and third quarters of the year. Net non-recurring expense and income came to € -1.2 million (€ -0.6 million at 30 September 2023).

In first nine months 2024, initiatives continued on maintaining and developing revenue, boosting the publishing systems' range of products, developing the digital platforms and enhancing the vertical publishing systems.

In Italy, regarding the main initiatives only, the new services "Chiedi all'Esperto" and "Sportello Cancro" for Corriere della Sera were launched, new video columns were created, the Fast channel "Talks by Corriere della Sera" was launched, podcast offerings were expanded, the new channel "Figli & Genitori" debuted, the Instagram profile was restyled, the new L'Economia app was launched, also featuring an AI-based virtual assistant, the new Salute app was released in subscription with corriere.it. Important events were also organized, including Obiettivo5, Italia Genera Futuro, the Pact4Future International Forum, the series of meetings Le Economie d'Italia, Premio Bilancio di Sostenibilità, Women in Food, for the Milan Design Week and together with the interior decorating publications Living and Abitare a scenic installation inside the courtyard of the historic headquarters in Via Solferino, Civil Week, Tech Emotion, Festival Pianeta 2030, Barbera Wine Festival, "L'Economia del mare", Trento DOC Festival, and Il Tempo delle Donne, which garnered over 30 thousand live attendances and over 6.5 million streams online and on social networks. The fifth edition of Campbus kicked off on 23 September. In the nine months, major sporting events in the portfolio were held: Giro d'Italia, Milano Sanremo, Tirreno Adriatico, Next Gen, Milano Torino, Strade Bianche, UAE Tour, Milano Marathon and Giro d'Italia Women. La Gazzetta dello Sport opened two new social channels, LinkedIn and YouTube, launched a new app that provides access to both the site's news and the newspaper's browser in digital format, opened new podcast columns, revamped the organization of the cross-platform video area (site and social channels), restyled Sportweek, expanded the offering for the 2024 European Football Championship, launched the new multi-platform video project "Guida con Noi", and organized the Milano Football Week event. Since May, Dove has appeared on newsstands with a refreshed design and updated content, and starting 9 July, Andrea Biavardi has taken over as the new editor-in-chief of the weekly magazine Oggi.

In Spain, regarding the main initiatives only, in January the new version of La Lectura was launched, in February Escuela de Formacion launched a new web portal offering access to its educational offerings, and in March Marca revamped its print edition with a new layout and expanded content offerings. In March again, Expansión launched a new series of video interviews with key players in Spanish entrepreneurship, since April El Mundo has bolstered its weekend offerings by introducing the option to purchase the Hola magazine with the Sunday edition, in late May the new Telva Living magazine was launched, and in July Expansión launched the new Expansión Business School. Work also continued on the organization of major events, including participation with El Mundo and La Lectura in the International Contemporary Art Fair in Madrid, the Foro Internacional de El Mundo "Europa, un año decisivo", which inaugurates a series of initiatives aimed at celebrating the 35th anniversary of the title, the start of the "España está de moda" series of meetings organized by Telva, and "El foro económico internacional Expansión".

EBIT came to a positive € 51.5 million, improving by € 8.7 million versus first nine months 2023 (€ +42.8 million), reflecting the above phenomena commenting on EBITDA. The increase in amortization is attributable mainly to expenditure in digital business development.

Group net profit at 30 September 2024 amounted to € 32.1 million (€ +27.8 million at 30 September 2023), increasing by € 4.3 million.

At 30 September 2024, net financial debt stood at € 19.7 million, improving by € 3.7 million versus € 23.4 million at 31 December 2023. The improvement is attributable mainly to the positive contribution from ordinary operations, partly offset by outlays for dividend distribution of approximately € 36.3 million and for technical expenditure and non-recurring expense of approximately € 19.1 million. Additionally, it should be noted that at 30 September 2024, projected tax receivables for the publishing industry totaling approximately € 26.6 million (including residual receivables from 2021, 2022, and 2023) are recorded in the balance sheet assets.

Total net financial debt, which includes financial payables from leases pursuant to IFRS 16 (mainly property leases), totaling € 133.6 million at 30 September 2024, amounted to € 153.3 million (€ 151.4 million at 31 December 2023).

Business outlook

The first nine months of 2024 were dominated by the ongoing conflicts in Ukraine and the Middle East, with their repercussions extending to the economy and trade. These events persist in creating a state of significant overall uncertainty. The Group has no direct exposure and/or business activities towards the markets affected by the conflicts and/or sanctioned entities. These conflicts, and their impacts, are still ongoing even at the date of approval of this Interim Management Statement. In the first nine months of 2024, the Group met the public's strong need to stay informed through its information offering, ensuring a timely service to its readers. The daily editions of Corriere della Sera and La Gazzetta dello Sport in Italy, and of El Mundo, Marca and Expansión in Spain, the Group's magazines and web and social platforms have played a pivotal role in informing, focusing on their mission as a non-partisan, trustworthy public service, and establishing themselves as authoritative players in daily print and online information, with strong digital traffic figures. The developing situation and the potential effects on the business outlook, which are constantly monitored, are unforeseeable at this time as they depend, inter alia, on the evolution, developments and duration of the conflicts in Ukraine and the Middle East and their geopolitical effects. In consideration of the actions already implemented and those planned, in the absence of a deterioration of the consequences from the ongoing conflicts and their developments in Ukraine and the Middle East, the Group believes that it can confirm the goal of achieving strongly positive margins (EBITDA) in 2024, up from those achieved in 2023, and of continuing with further cash generation from operations. Developments in the ongoing conflicts, the overall economic climate and the core segments could, however, affect the full achievement of these targets.

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Under paragraph 2, Article 154-bis of the Consolidated Finance Law (TUF), Roberto Bonalumi, in his capacity as Financial Reporting Manager, attests that the financial information contained herein is consistent with the Company's document results, books and accounting records.

([1]) For the definitions of Group EBITDA, EBIT and Net Financial Position or Group net financial debt (liquidity), reference should be made to the section "Alternative Performance Measures" in this Press Release.