Cairo Communication — Investor Presentation 2016

Mar 21, 2017

CAIRO COMMUNICATION

Milan March 21 2017

Cairo Communication

A large multi-media publishing group…

Cairo Communication Like for like

Including RCS in the Group's scope of consolidation for the month of September, in 9M16, consolidated gross revenue amounted to Euro 272.1 million, rising sharply versus 9M15 (Euro 185.7 million), due mainly to the consolidation of RCS. The date of initial consolidation adopted is 1 September 2016. The Interim Management Report at 30 September 2016 therefore includes the RCS results of September.

2016 FY Results – Highlights

EUR million

Outlook 2017

Excluding advertising revenues coming from ceased third party publishers with little marginality, expected revenues for 2017 are exceeding the 2016 result.

Outlook 2017 January - February

• The first two months of the year show a significant improvement of EBITDA of more than EUR 10 million compared to the same period of the previous year, in line with the growth expectations for the year
• Ebitda improvement is also estimated for March compared to the same 2016 period.

CAIRO EDITORE – EDITORIALE G.MONDADORI

CAIRO EDITORE – EDITORIALE G.MONDADORI

9 Months 2016

January - September

(Euro M)

Costs of approximately Euro 1.2 million were incurred for the launch of "Nuovo e Nuovo TV Cucina" and of "Enigmistica Più". The period under review confirmed the excellent circulation results (Euro 56.4 million versus Euro 55.1 million in 9M15). Ebitda FY 2016 will exceed Ebitda FY 2015.

Cairo Editore + RCS

Newsstand sales Weeklies / Jan-Dec 2016

MAGAZINES

Cairo Editore + RCS

WEEKLIES NEWSSTAND SALES

Jan-Dec 2016

Market Share 32%

Achieved 2016 Target 2017

2016-2017 Savings Italy+Spain

Production
Print cost	~15
Paper cost	~4
Set up sport events	~1

Personnel ~17

Publishing collaboration ~7 It ~6 Playout Digicast ~0,5 Insourcing

2016-2017 Savings Italy+Spain

Logistic / Overhead

Distribution & transports ~7.5

Travel expenses ~3,5

Rental costs ~5,2

Consultancy, profess. serv. ~3,0

Facility management/Utilities ~3,0

Others ~10 (Insurance, car fleet, canteen, taxi, newspapers & books, switchboard, ect)

MAGAZINES

From October 2016: thorough review, enthusiastic readers and advertising market reaction

From August 2016: most popular topics, new graphic, +37% in copies (Yoy Jan-Feb 2017)

20 From March 2016: L'economia, the new Monday economic attachement characterised by innovative updated graphics and exclusive contents to offer continuous, accurate and fast economic and financial information

Corriere della Sera

The newspaper also features the new column Il Caffè written by Massimo Gramellini.

Lo dico al Corriere: a new page by Aldo Cazzullo where the readers of Corriere della Sera can share experiences and reflections.

From April 2017: every Thursday at the newsstands with a new editor, Beppe Severgnini.

The week of Corriere della Sera

«GRANDE» GAZZETTA DELLO SPORT

10 special issues during 2017 (one per month from February) giving wide space to relevant national and international sport events

• Increased print run
• Large foliation
• Wide Cover
• Supporting advertising campaign
• Additional advertising spaces to sell

GAZZETTA DELLO SPORT

Geolocalization contents in order to maintain the circulation market share in specific areas following customer needs:

• ATALANTA
• BOLOGNA/TORINO
• FIORENTINA/UDINESE
• HELLAS VERONA
• CAGLIARI
• BRESCIA/VARESE
• BARI
• PALERMO

Add value through local edition with first page dedicated to each specific team

Major changes also for Marca and Radio Marca, with completely renewed style and contents.

Commercial Agreement including the creation of Marca Claro, the Worldwide alliance for multimedia sports information in South America

Launch of a new magazine before summer 2017

Audience performances 2016 Share La7 / La7D Network

SOURCE: AUDITEL

Cairo Network

After auctioning (July 2014) the rights to use Dtt frequencies (Mux) for a period of 20 years, Cairo Network completed with EI Towers S.p.A. (during 2016) the realization of the mux.

This allow Cairo Communication to:

• Optimize bandwidth costs
• Lease part of the capacity to third parties
• Launch new tv channels

ADVERTISING La7+La7d advertising January – December 2016

(Euro Million)

Jan-Dec 2015 Jan-Dec 2016

Advertising revenues on Group's Magazines during the 4Quarter achieved a growth of around +17%. According to Nielsen data the advertising market on Magazines decreased in 2016 -4,0 yoy; during last Quarter (Oct-Dec) -5,4.

Outlook 2017

• 1. Revenues slightly up (around +1%) Rcs revenues (net of the termination of some advertising sales contracts for third party publishers with low marginality), are slightly growing thanks to improvement in the sports events area and increasing advertising revenues on the Group's publications
• 2. EBITDA totalling around EUR 140 million, with EBITDA margin significantly up (from approximately 10% to around 15%)
• continuous commitment to pursue efficiency,
• greater focus on advertising revenues on own product portfolio,
• reinforcement of publishing activities by enhancing editorial contents of newspapers and magazines
• development of revenue connected with the organisation of sports events
• 1. The first two months of the year 2017 show a significant improvement of EBITDA of more than 10 million EURO and Ebitda improvement is also estimated for March compared to the same 2016 period.

Cairo Communication – La7 Outlook 2017

La7 / La7d main guidelines:

• 1. preserve and develop the high level of advertising revenues
• 1. new programs, in order to reinforce existing channels
• 1. maintaining focus on costs
• 1. take advantage of the realization of the Mux
• Optimize bandwidth costs
• Lease part of the capacity to third parties
• Launch new tv channels

Cairo Communication – Cairo Editore Outlook 2017

Cairo Editore main guidelines:

• 1. maintain high circulation levels, supporting the publications with appropriate marketing activities
• 1. pursue the development of Cairo Editore with the launch of new magazines
• 1. maximize the advertising revenues
• 1. maintain focus on curbing production, publishing and distribution costs