The De Agostini S.p.A. shareholders'meeting approves the 2010 financial statements

CONSOLIDATED NET REVENUES RISE TO EUR 4,318 MILLION, EBITDA UP 9% AT EUR 876 MILLION, RECURRING EBIT 21% HIGHER AT EUR 428 MILLION

IMPAIRMENTS AND OTHER NON-RECURRING ITEMS (MAINLY NON-CASH) TOTAL MORE THAN EUR 600 MILLION

 

Novara, 13 July 2011. The De Agostini S.p.A. shareholders’ meeting, which met under Chairman Marco Drago, approved the annual financial statements to 31 December 2010 and reviewed the consolidated financial statements for the same period, which were prepared in accordance with IAS/IFRS.

Summary of results:

  • Net revenues of EUR 4,318 million (vs. EUR 4,154 million in 2009)
  • EBITDA of EUR 876 million (vs. EUR 801 million in 2009)
  • "Recurring" EBIT, i.e. before extraordinary items, of EUR 428 million (vs. EUR 355 million in 2009)
  • Consolidated net loss of EUR 560 million (vs. a loss of EUR 273 million in 2009)

In what continued to be a critical year for the economy and the financial markets, the Group achieved a 4% increase in net revenues and a sharp rise in EBITDA (+9%). All business areas made a positive contribution, with Media & Communication broadly stable.

This trend was also mirrored by "recurring" EBIT, i.e. before extraordinary items, which grew around 21% to EUR 73 million.

The Group’s consolidated net loss was, however, hit by one-off charges totalling EUR 632 million and comprising:

-       impairment of EUR 404 million on the holding in Assicurazioni Generali, largely to bring the initial cost of acquisition into line with its value on 31 December 2010 (part of this was already reported under shareholders’ equity in previous years)

-       other impairments, in particular on goodwill in Gaming & Services and Media & Communication, totalling EUR 155 million

-       restructuring and refinancing costs (the latter relating to Gaming & Services) amounting to EUR 73 million

In this regard, it is worth highlighting that the majority of adjustments to assets and other non-recurring items did not affect the Group’s debt position. Specifically, the alignment of the investment in Assicurazioni Generali generated a loss in the income statement, which had already been partly recorded in previous years. The reduction of the Group’s shareholders’ equity in 2010 (down EUR 142 million on 2009) was significantly less than that shown on the income statement (a reduction of EUR 560 million).

"The macroeconomic environment in 2010 has remained uncertain, and the financial markets have been highly volatile; the financial crisis that struck more than three years ago gradually spread, as we know, from the private financial sector to the real economy and subsequently to the public sector.Against this backdrop, we also sought to strengthen the Group in each of its businesses in 2010, continuing to sustain fundamental investment in strategically key areas and implementing reorganisation plans to bring our costs into line with our objectives to improve operating performance. Specifically, the business results achieved not only met our forecast expectations but confirm that the choices we made were correct," said Marco Drago, Chairman of De Agostini S.p.A.

At 31 December 2010, the group’s net debt stood at EUR 4,585 million, compared with EUR 4,140 million at the end of 2009. This increase is the result of the investments made in Gaming & Services, in particular the EUR 800 million outlay to renew the scratch cards concession. In 2010, the Group completed a three-year cycle which saw EUR 3.2 billion invested in capex and the acquisition of holdings and concessions, contributing to growth in size and diversification.

The Parent company De Agostini S.p.A. closed 2010 with a loss of EUR 330.8 million, compared with a loss of EUR 303.8 million in 2009, which was almost entirely due to impairments on holdings (principally DeA Partecipazioni, holder of the stake in Assicurazioni Generali).

The holding company structure (De Agostini S.p.A., DeA Partecipazioni and other minority interests) recorded net debt of EUR 773 million, representing an improvement over the net debt figure of EUR 802 million at the end of 2009.

The shareholders’ meeting approved the proposal of the Board of Directors not to pay a dividend, in line with the capital-strengthening policies of the last two years.

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Details on the performance of each business are given below.

Publishing

Publishing showed encouraging signs in developing markets and new businesses during the year, but the negative trend in the traditional western European markets continued.

Revenues dropped 4% to EUR 1,326 million, mainly due to the performance of Partworks and General Reference. EBITDA jumped from EUR 11 million in 2009 to EUR 27 million in 2010, in part thanks to cost-cutting plans implemented in recent years. In the second half of 2010, a process of reorganisation was initiated, focusing on three separate and autonomous business areas: Partworks, Direct Marketing and Books.

 

Media & Communication

The Media & Communication business posted net revenues of EUR 642 million, a rise of EUR 82 million (or around +15%) compared with 2009. This result was made possible by the growth in Zodiak Media, partly thanks to the integration of RDF Media on 1 August 2010, which heads up the group’s TV content production activities and which achieved revenues of around EUR 437 million (approx. EUR 500 million pro-forma).

Antena 3 (of which approximately 23% is consolidated using the proportional method) benefited from changes in legislation and the upturn in the Spanish advertising market to post an increase of around 15% in revenues, with EBITDA almost doubling to EUR 157 million. Antena 3 also grew its own advertising market share (28%), in part thanks to the success of its digital channels.

Overall, the business area posted largely stable EBITDA of EUR 75 million.

 

Gaming & Services

Revenues at Lottomatica Group came in at EUR 2,314 million, a 6% increase compared with 2009, while EBITDA rose by about 4% to EUR 812 million. The rise is largely attributable to the positive performance of business in Italy, including Lotto and video lotteries from the fourth quarter, but there are also encouraging signs from the increase in sales of lottery terminals by GTech.

During the year, investments totalling more than EUR 1,200 million were made, compared with EUR 417 million in 2009. The investment made in 2010 included EUR 800 million for the scratch cards concession and EUR 81 million for licences for video lottery terminals (VLTs) in Italy.

At 31 December 2010, the Lottomatica Group’s consolidated net debt was EUR 2,960 million, compared with EUR 2,417 million at 31 December 2009. The increase was largely the result of the payment for the scratch cards concession and the VLT licences in Italy, net of the stakes bought by the other shareholders of Lotterie Nazionali S.r.l. (licence holder of the scratch cards concession).

 

Financial Investments

In 2010, DeA Capital concentrated its efforts on managing its existing investment portfolio and on developing its asset management activities. The latter saw the reorganisation of the activities of IDeA Alternative Investments, which is now wholly owned, including the dissolution of the joint venture and, above all, the successful conclusion of negotiations to merge First Atlantic Real Estate SGR and Fimit SGR, which will create the largest real estate asset management company in Italy (IDeA Fimit SGR).

As regards private equity investments in 2011, the investment in Migros was partially liquidated and major changes were made to the governance structure of Generale de Santé (with the move from a dual system to a unitary system with only a Board of Directors), in addition to the appointment of a new CEO.

DeA Capital S.p.A. reported a profit of EUR 16 million, compared with a loss of EUR 1.8 million in 2009. Its net asset value per share was EUR 2.60, or EUR 764 million in total. It reduced its net debt from EUR 35 million to EUR 20 million, maintaining a solid financial position.

 

In relation to the investment in Assicurazioni Generali, the insurance company’s results improved by 30% compared with 2009, but its share price, was still affected by the poor performance of the European insurance sector and by the sovereign debt crisis affecting Italian financial shares.

Lorenzo Pellicioli, CEO of De Agostini S.p.A., commented: "I can confirm the strategic guidelines that we decided last year: a continued focus on operating excellence; selectivity and balance in the choices made for the portfolio to ensure the proper and prudent use of available capital; and a gradual reduction in overall debt.We are experiencing a difficult year, and it is hard to foresee trends in the macro-economic framework and the financial markets - factors which cannot fail to affect the business and financial performance of our Group.I believe, however, that we are well-placed to further grow our overall business results, by virtue of the significant investment made and the measures undertaken since the start of the crisis. In this regard, the performance achieved in the first few months of 2011 - starting with the figures for the Lottomatica Group and DeA Capital - can be considered encouraging."

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Following the De Agostini S.p.A. shareholders’ meeting, the shareholders’ meeting of parent company B&D Holding di Marco Drago e C. S.a.p.a. was held to approve the 2010 annual financial statements, which closed on net profit of EUR 15.6 million (compared with EUR 19.4 million in 2009). On the basis of the recommendation by the Board of General Partners, the shareholders’ meeting approved payment of a dividend of EUR 14.7 million, in line with the previous year.

 

For further information, please contact:

Elena Dalle Rive - De Agostini S.p.A. Press Office
Tel.: + 39 02 62499592 Fax: + 39 02 62499553 Mob.: 335 7835912
e-mail: elena.dallerive@deagostini.it

 

De Agostini
De Agostini is a family-owned international group, organised as a financial conglomerate, that operates in a wide range of industries (publishing, gaming, and media & communications) and in the financial sector.
De Agostini Editore is present in 30 countries, mainly in the Partworks and Mail Order businesses.
The Lottomatica Group is a leading player on the international gaming and lotteries market and on the market for associated services and technologies, not least through its US subsidiary GTECH.
De Agostini Communications operates in the media content production sector through its subsidiary Zodiak Media, which is present in over 20 mainly European countries, and in the broadcasting sector through Antena 3 de Televisión (Spain), which is under the joint control of De Agostini Communications and the Spanish shareholder Planeta Corporation.
DeA Capital operates in the alternative investments sector, both through direct and indirect private equity investments and through controlling interests in alternative asset management platforms.
De Agostini also holds a 2.3% stake in Assicurazioni Generali.