1H 2014 Results July 31, 2014
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 asaresultsofvariousfactors,manyofwhicharebeyondtheabilityofilsole24ores.p.a.tocontrolorestimate 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. Valentina Montanari, 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
Group consolidated revenue grows by 6.2 million euro(+3.9% versus 1H13), driven by the innovation strategy pursued for the products and services offering, specifically in the digital versions. Circulation revenue from the daily rises by 4% (+1.4 million euro), electronic publishing revenue from the Tax&Legal Area climbs by 14.4% (+2.8 million euro), revenue from the Training Area advances by 25.7% (+3.1 million euro) and revenue from the CultureAreamovesupby6.2millioneuro Gross operating profit(ebitda) improves significantly by 15.1 million euro(+92.4%), reaching-1.2 million euro(-16.3 million euro in 1H13), thanks to the growth of(mainly digital) revenue, the continuing cost containment measures, the optimization of the organizational, productive and distribution structure, and process efficiency. Costs fall by 7.4 million euro, or 4.1%, versus 1H13, despite the increase in revenue Il Sole24OREretainsitsrankingasItaly sleadingdigitalnewspaperwithover184thousanddigitalcopiesatmay2014(+141%versusmay2013) and reaches a substantial breakeven result with the distribution of its print version. Total print + digital circulation in 1H14 exceeds 363 thousand copies (+24.8% versus January-June 2013), bucking the market s -3.3%(ADS May 2014) and making Il Sole 24 ORE, once again, the third major newspaper in Italy. Circulation revenue from the daily grows by 4%, or 1.4 million euro, and the Publishing Area EBITDA returns positive to +0.1 million euro in 1H14, increasing sharply by 8.4 million euro(+101.8% versus-8.2 million euro in 1H13), thanks to the innovation strategy pursued for the offering, the switch to digital operations, and the implementation of cost rationalization measures System advertising sales, against the persisting negative backdrop of the advertising market, are in line with 1H13 (relevant market -8.5%), thanks to the positive performance of online sales, up 6.9% (versus the market s -2.1%), of Radio 24, up 1.5% (versus the market s overall -0.3%) and of advertising sales on the Group s print media, which outperform the market (-6.7% versus the market s -12.4%). This confirms the ability to showcase the Group s quality and unique features of its editorial offering on the market.(nielsen January-May 2014) www.ilsole24ore.com, the first fee-based website in Italy, with over 18 thousand users who have purchased a subscription formula at 30 June 2014, reports an average of almost 680 thousand unique browsers, up +5.6%, and a 2.1% increase in page views versus the 1H13 average (Nielsen Site Census / Omniture Sitecatalyst). The mobile version of the website in 1H14 sees unique browsers increase by 85.2% on average day and page views increase by 32.9%(Nielsen Site Census/ Omniture Sitecatalyst), thanks to the graphical restyling and optimized utilization of content Culture Area revenue increases(+6.2 million euro), spurred by the success of the exhibitions, which confirm the supremacy of 24 ORE Cultura. Profits (EBITDA margin +7.3%) return to positive versus 1H13 Revenue (25.7%) and profits (EBITDA +90.8%) from the Education and Events Area are on the rise, thanks to the expansion of the Business School master offering and the increase in events organized by Newton Operating profit(ebit), improving by 15.5 million versus 1H13(+64.1%), comes to-8.7 million euro(-24.2 million euro in 2013) The net result attributable to the owners of the parent shows a positive figure of 8.8 million euro (-21.3 million euro at 30 June 2013), benefitting from the result of discontinued operations amounting to 21.3 million euro from the disposal of the Software Area TheNetFinancialPositionshowsapositivefigureof21.1millioneuro(-48.6millioneuroat31December2013),thankstotheinflowofatotalof96.6 million euro from the disposal of the Software Area, partly offset by the payment of non-recurring charges of 17.3 million euro 4
Agenda Key Financial Data Financial data by divisions Appendix 5
Key Financial Data During 1H 14 the disposal of Business Media and 24ORE Software have changed the scope of consolidation. Financial data are presented on a like-for-like basis. 6
Agenda Key Financial Data Financial data by divisions Publishing Publishing&DigitalandAgency&P.A. Tax&Legal Radio System(Advertising) Training& Events Culture Appendix 7
Publishing 1H 14 Revenue split Thedivisionheadsup: Publishing & Digital which includes the daily newspaper Il Sole 24 ORE (paper and digital version) and its bundled add-ons and magazines, the new digital products, the www.ilsole24ore.com web site and the paid online contents Radiocor news agency Tax & Legal: develops integrated product systems of technical and regulatory content targeting professionals, companies and the Public Administration Thenational news&talk radiostationradio24 Decrease in revenues has affected the area performance (-4.9% yoy) mainly due to a decrease in Agency, Tax&Legal paper products revenues and add-ons and tabloid revenues partially offset by a relevant increase in digital revenues(tax& Legal and newspaper) Strong increase in profitability(+101.8% yoy) mainly due to the focus on the implementation of the innovation and digital strategy, integration of the platforms and cost cutting measures put in place 8
Publishing: Publishing & Digital and Agency & P.A. Publishing& Digital 1H 14 Revenue split Positive trend for newspaper circulation revenues (+4.0% yoy), + 1.4m): Il Sole 24 ORE retains its first place as digital newspaper (>184k copies in May 14, +141% vs. May 13) and its third place in ADS national digital and paper circulation with >363k copies www.ilsole24ore.com: first Italian fee based website (>18.000 digital subscribers at 30 June 2014) reports an average 680k unique browsers(+5.6%yoy)anda+2.1%inpageviewsvs.1h13 (*).Restyling of the web site mobile version and user experience optimization have led to a growth in average daily unique browsers (+85.2% yoy) and in pageviews(+32.9%vs.1h13) (*) Despite decrease in total revenues (-4.4% yoy, mainly due to tabloid and add-ons decrease), division still improves in profitability(+ 8.9m in Ebitda) Strengthening of synergies between newspaper and professional market through improvement in services and offers related to Business Class Agency&P.A. Decreaseinrevenues:-21.4%vs.1H13 Publishing & Digital (*) Source: Nielsen Site Census/Omniture Site Catalyst Agency & P.A. 9
Publishing: Tax & Legal Decrease in revenues (-5.2% yoy) mainly due to paper products (-30% vs.1h13) In addition to the turmoil of paper publishing market, revenues are also affected by: 1H 14 Revenue split portfolio magazines rationalization shifting to the sole digital version for some products closing of products having negative profitability books editorial plan rationalization Positive trend in digital revenues (+14.4% yoy) as results of the shift to digital model based on integration process of Group s contents into Business Classes Digitalrevenuesontotaldivisionat67%in1H14(55%in1H13) Stable profitability despite decline in revenues (Ebitda margin at 29%), due to marketing and editorial costs contain and driven by the measures adopted for the transition from print to online platforms 10
Publishing: Radio 1H 14 Revenue split Total revenues at 7.3m (+2.7% yoy): advertising revenues (also including radio website revenues) increased by 2.4% Radio 24 steadily ranks 9 th among national radios market with over1.9millionslistenersonaveragedaywitha2.8%share Web site unique users at approx. 423k and average daily page views atapprox.5,200k (*) (*) Source: Omniture Site Catalyst 11
System (Advertising) Advertising yoy by Area vs Market* (*) Source Nielsen Media Research Jan May 2014 for market data G. 24 ORE Radio + 1.5% Online + 6.9% Paper Publishing - 3.2%... VS. Market -0.3% -2.1% -12.4% Revenuesinlinewith1H13(-0.1%yoy):Systemstilloutperformsthereferencemarket(-8.5%vs.1H13) Although still negative, advertising collection on newspaper products has recorded a single digit decrease -4.4% vs. reference market at-12.8% Radio24 outperforms the reference market(+1.5% yoy vs.-0.3% yoy) Positive trend in revenues also from internet advertising collection: +6.9% yoy vs. market(-2.1% yoy) 12
Education & Events Increase in revenues (25.7% vs. 1H 13) and boost in profitability (+90.8% vs. 1H 13) due to a new product mixandcostcuttingmeasuresputinplace Business school revenues at 6.7m up 19.1% vs. 1H 13 thanks to positive trend both in Full Time Masters (+13.7% yoy) and Part Time Masters(+25.0% yoy) Positive performance also for Newton Management Innovation and Newton Lab products and services (+44.6% yoy) mainly due to new clients acquisition 13
Culture Overall revenues at 10.7m (+139.9% vs. 1H 13) due to a more inflow in the exhibitions and an increase in the number of exhibitions launched Profitability turns positive (+ 3.0m yoy) supported by improvement in business performance and costs recovery 14
Agenda Key Financial Data Financial data by divisions Appendix 15
Consolidated Balance Sheet 16
Consolidated Cash Flow 17
Consolidated Net Financial Position 18
Revenues & EBITDA Breakdown At the end of 2013, the Group reorganized its business areas consistently to the Group s innovation model focus on reader/customer and his key role in the core business and on digital development. The new organization led to a unique editorial and publishing supervision and to the gathering of newspaper (paper + digital), web site, professionals publications, radio and press agency activities within the Publishing area. During the 1H 14 the disposal of Business Media and 24ORE Software have changed the scope of consolidation. Figures of the two periods are presented on a like-for-like basis. (*) Other includes Fabbrica24 and E-commerce Data in m rounded figures 19
1Q 2013/2014 like-for-like ( m rounded figures) During 1H 14 the disposal of Business Media and 24ORE Software have changed the scope of consolidation. 1Q2013and2014financialdataarepresentedonalike-for-likebasis. 20