Rcs Mediagroup

Earnings Release • Mar 19, 2015

RCS MediaGroup

2014 FY Results

Milano, 19 Marzo, 2015

Agenda

Highlights

Market & Business Trends

2014 FY Results

Outlook and Strategic Opportunities

Business Units Back up

2014 Delivery Report

Profitability Ebitda margin increase for all BUs

Efficiencies Above FY14 enhanced target of € 70M

Cash Flow

Operating Cash Flow back to positive with an improvement of € 85M vs 2013

Advertising

Group advertising revenue: +3% YoY Media Spain: +7% YoY Media Italy: -6 % YoY

Digital 13% of total revenue (15% excluding books) Digital Subscriptions double-digit growth (Corriere +25%)

2014 FY Results

Focus on Q4 2014 & Q1 2015 initiatives

MEDIA ITALY

NEWS

• Successful new tabloid format Corriere, following new DE and new corriere.it
• Increased online videos and webseries
• Launch of new Abitare magazine and revamp of Life Style and Travel magazines through strong new editors

SPORT

• Successful new Gazzetta System (GazzaGold app, restyling print edition)
• Encouraging launch of Gazzetta TV channel 59 on DTT
• GazzaBet reached over 15k registered users (end of 2014)

ADV & SPORT EVENTS BOOKS

ADVERTISING

• New adv organization: RCS Communication Solutions
• New BTL agency NuMix
• Profiling & data monetization (Madai, Blurum partnerships)

SPORT EVENTS

• Growth of International sport events (Dubai and Abu Dhabi Tour)
• New mass events formats (Electric Run, We Glow)

MEDIA SPAIN

NEWS

• El Mundo new microvideo and mobile journalism
• Expansión.com new web-site launch
• Expansión Mexico edition launch
• Telva new digital project and contextual e-commerce model

SPORT

• Marca.com new video platform with improved "In app" video

• Discovery Awards organized by Last Lap

• Successful Q1 titles Eco, Houellebecq, Piketty, Rovelli and Arango

• New Rizzoli Galleria bookstore in Milan successful results
• MyStudio edu-platform
• Strenghtened offer in Education for 2015

2014 FY - Digital revenue

(1) Italy excluding books

6 (2) % on trade books

Agenda

Highlights

Market & Business Trends

2014 FY Results

Outlook and Strategic Opportunities

Business Units Back up

RCS TOTAL MARKET

(1) Excluding Search Adv

(2) Including: Cinema , Direct Mail ,Transit, Out of home TV (3) RCS advertising house excluding third party Source: Nielsen Media Research

(3)

8

Spain: Advertising Trends

Source: Arce Media

9

Italy: Newspaper Circulation Trends Circulation, copies/000 per day

2014

16.6

34.4

Source: Nielsen Online – SiteCensus- Adobe Sitecatalyst

Spain: Newspapers Circulation Trends Circulation, copies/000 per day

Million Users

Spain: Online Readership

Books: RCS Trade vs Market

Agenda

Highlights

Market & Business Trends

2014 FY Results

Outlook and Strategic Opportunities

Business Units Back up

2014 FY Results - Summary

EUR million

	4Q14		(1) 4Q13		∆ %	2014		(1) 2013		∆ %
Total Revenue	357.8	10 0 %	349.2	10 0 %	2.5%	1,279.4	10 0 %	1,314.1	10 0 %	(2.6%)
Circulation	173.5		181.6		(4.5%)	658.5		719.9		(8.5%)
Advertising	149.8		138.1		8.5%	491.2		476.1		3.2%
Other	34.5		29.5		16.9%	129.7		118.1		9.8%
EBITDA ex NR Items	56.5	15.8 % 0 .0 %	48.1	13 .8 % 0 .0 %	>100%	70.1	5.5% 0 .0 %	27.1	2 .1% 0 .0 %	n s
Non Recurring Items	(10.1)	0 .0 %	(10.2)	0 .0 %		(40.1)	0 .0 %	(110.5)	0 .0 %
EBITDA	46.4	13 .0 %	37.9	10 .9 %	n s	30.0	2 .3 %	(83.4)	( 6 .3 %)	n s
EBIT	15.8	4 .4 %	(23.2)			(53.5)		(201.2)
Net Result	(17.7)	( 4 .9 %)	(43.2)	( 12 .4 %)		(110.8)		(218.5)
NFP						(482.5)		(474.3)

(1) Q413 and 2013 figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation. Additionally, these figures were modified to reflect the application of IFR5 to the value of the Group's shareholding in IGP and Finelco Group, for which a divestment is highly probable. The Partworks Division were sold on August 1, 2013. On December 11, 2013 the equity investment in Editions d'Art Albert Skira was sold and on March 1, 2014 the line of business La Tribuna was sold.

2014 FY Results – Profit & Loss

	EUR million

EUR million			(1)				(1)
	4Q14		4Q13		2014		2013		∆ %
Circulation	173.5	48.5%	181.6	52.0%	658.5	51.5%	719.9	54.8%	(8.5%)
Advertising	149.8	41.9%	138.1	39.5%	491.2	38.4%	476.1	36.2%	3.2%
Other	34.5	9.6%	29.5	8.4%	129.7	10.1%	118.1	9.0%	9.8%
TOTAL REVENUE	357.8	100%	349.2	100%	1,279.4	100%	1,314.1	100%	(2.6%)
Operating costs (ex non recurring costs) Labour costs (ex non recurring costs)	(217.4) (75.2)	(60.8%) (21.0%)	(219.5) (73.9)	(62.9%) (21.2%)	(881.5) (306.0)	(68.9%) (23.9%)	(928.8) (332.7)	(70.7%) (25.3%)	(5.1%) (8.0%)
Writedowns	(4.0)	(1.1%)	(4.2)	(1.2%)	(14.4)	(1.1%)	(18.1)	(1.4%)	(20.4%)
Provisions	(4.7)	(1.3%)	(3.5)	(1.0%)	(7.4)	(0.6%)	(7.4)	(0.6%)	0.0%
EBITDA ex Non Recurring Items	56.5	15.8%	48.1	13.8%	70.1	5.5%	27.1	2.1%	>100%
Non Recurring Items	(10.1)	(2.8%)	(10.2)	(2.9%)	(40.1)	(3.1%)	(110.5)	(8.4%)	ns
EBITDA	46.4	13.0%	37.9	10.9%	30.0	2.3%	(83.4)	(6.3%)	ns
D&A	(17.7)	(4.9%)	(17.0)	(4.9%)	(61.8)	(4.8%)	(69.8)	(5.3%)
Impairment writeoffs	(12.9)	(3.6%)	(44.1)	(12.6%)	(21.7)	(1.7%)	(48.0)	(3.7%)
EBIT	15.8	4.4%	(23.2)	(6.6%)	(53.5)	(4.2%)	(201.2)	(15.3%)
Net financial incomes (charges)	(10.4)	(2.9%)	(12.9)	(3.7%)	(41.4)	(3.2%)	(32.7)	(2.5%)
Gain (losses) on financial assets/liabilities	(0.5)	(0.1%)	1.9	0.5%	(2.3)	(0.2%)	0.7	0.1%
Income (charges) from equity investments	0.5	0.1%	(3.0)	(0.9%)	(1.4)	(0.1%)	(2.5)	(0.2%)
PRE-TAX RESULT	5.4	1.5%	(37.2)	(10.7%)	(98.6)	(7.7%)	(235.7)	(17.9%)
Taxes	(6.5)	(1.8%)	(10.2)	(2.9%)	4.3	0.3%	28.5	2.2%
Net Result from Discontinuing and Discontinued Op.	(15.7)	(4.4%)	4.4	1.3%	(16.1)	-1.3%	(11.6)	(0.9%)
Minorities	(0.9)	(0.3%)	(0.2)	(0.1%)	(0.4)	(0.0%)	0.3	0.0%
NET RESULT	(17.7)	(4.9%)	(43.2)	(12.4%)	(110.8)	(8.7%)	(218.5)	(16.6%)

(1) Q413 and 2013 figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation. Additionally, these figures were modified to reflect the application of IFR5 to the value of the Group's shareholding in IGP and Finelco Group, for which a divestment is highly probable.

The Partworks Division were sold on August 1, 2013. On December 11, 2013 the equity investment in Editions d'Art Albert Skira was sold and on March 1, 2014 the line of

17 business La Tribuna was sold.

2013-2014 EBITDA evolution by quarter (1)

EUR million

√ 6 consecutive quarters of improvements

(1) EBITDA before non recurring costs

2013 figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation.

Q4 and 2014 FY Results – Breakdown Revenue & Ebitda

							(1)
EUR million			Q4 2014					Q4 2013
	Revenue	EBITDA Ex Non Recurring Items	Ebitda ex NR %	EBITDA	Ebitda%	Revenue	EBITDA Ex Non Recurring Items	Ebitda ex NR %	EBITDA	Ebitda%
Media Italy	147.6	34.0	23.0%	32.0	21.7%	146.7	28.3	19.3%	26.2	17.9%
Media Spain	101.0	22.1	21.9%	21.0	20.8%	98.4	14.6	14.8%	11.5	11.7%
Books	67.2	5.2	7.7%	0.8	1.2%	71.8	8.0	11.1%	8.6	12.0%
Advertising & Events	93.7	1.4	1.5%	1.1	1.2%	91.7	(1.8)	(2.0%)	(4.6)	(5.0%)
Corporate Activities	22.3	(6.2)	(27.8%)	(8.5)	(38.1%)	21.7	(1.0)	(4.6%)	(3.8)	(17.5%)
Others and eliminations	(74.0)	0.0	0.0%	0.0	0.0%	(81.1)	0.0	0.0%	0.0	0.0%
TOTAL RCS	357.8	56.5	15.8%	46.4	13.0%	349.2	48.1	13.8%	37.9	10.9%
			(1) FY 2013

	Revenue	EBITDA Ex Non Recurring Items	Ebitda ex NR %	EBITDA	Ebitda%	Revenue	EBITDA Ex Non Recurring Items	Ebitda ex NR %	EBITDA	Ebitda%
Media Italy	531.9	61.5	11.6%	60.1	11.3%	557.0	38.9	7.0%	(21.0)	(3.8%)
Media Spain	358.1	27.3	7.6%	(0.5)	(0.1%)	371.7	7.0	1.9%	(11.0)	(3.0%)
Books	222.6	9.3	4.2%	2.0	0.9%	251.1	8.8	3.5%	3.8	1.5%
Advertising & Events	345.5	(0.6)	(0.2%)	(1.7)	(0.5%)	330.4	(13.6)	(4.1%)	(31.6)	(9.6%)
Corporate Activities	78.0	(27.4)	(35.1%)	(29.9)	(38.3%)	78.5	(14.0)	(17.8%)	(23.6)	(30.1%)
Others and eliminations	(256.7)					(274.6)
TOTAL RCS LfL	1,279.4	70.1	5.5%	30.0	2.3%	1,314.1	27.1	2.1%	(83.4)	(6.3%)
Assets held for sale or sold Others and eliminations						39.7	4.1		4.1
TOTAL RCS	1,279.4	70.1	5.5%	30.0	2.3%	1,353.8	31.2	2.3%	(79.3)	(5.9%)

(1) Q413 and 2013 figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation. Additionally, these figures were modified to reflect the application of IFR5 to the value of the Group's shareholding in IGP and Finelco Group, for which a divestment is highly probable.

19 The Partworks Division were sold on August 1, 2013. On December 11, 2013 the equity investment in Editions d'Art Albert Skira was sold and on March 1, 2014 the line of business La Tribuna was sold.

2014 Efficiency program

EUR million

√ €164M achieved in two years vs €144M original three-year target √ In line with high end guidance of €220M by end 2015

Balance Sheet

EUR million

				(1)
	31/12/2014		31/12/2013
Net fixed assets	878.2	116.2%	962.2	118.9%
Tangible Intangible fixed & assets	652 4	86.4%	666 8	82.4%
Financial fixed assets	225 8	29.9%	295 4	36.5%
Net working capital	53.4	7.1%	87.7	10.8%
Reserve for risk and charges	(159.3)	(21.1%)	(209.5)	(25.9%)
Employee termination indemnity	(53.7)	(7.1%)	(51.3)	(6.3%)
Net invested capital: assets held for sale	36.9	4.9%	20.1	2.5%
CAPITAL EMPLOYED	755.5	100.0%	809.2	100.0%
Net financial debt (cash)	482.5	63.9%	474.3	58.6%
Equity	273.0	36.1%	334.9	41.4%
EQUITY & NFP	755.5	100.0%	809.2	100.0%

(1) Figures as of 31December 2013 were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of Consolidation.

Net Financial Position at the end of December 2014

EUR million

(1) Figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation

(2) Includes non recurring items

22

Focus on Q42014 Cash Flow

Cash flow representation as of management reporting

Agenda

Highlights

Market & Business Trends

2014 FY Results

Outlook and Strategic Opportunities

Business Units Back up

Outlook FY 2015

Continuing focus on profitability and deleveraging

Strategic opportunities: focus on News and Sports

New competitive landscape (TV/Social Media players)

RCS strong investments in power brands sustains leadership position through:

AUDIENCE EXTENSION

FURTHER VIDEO/MOBILE OFFER

PAID CONTENT STRATEGY

IMPROVED EFFICIENCY GAINS

NEWS SPORTS

Huge global audiences seeking community, content & engagement

RCS uniquely placed to create a major specialist platform in European Sports building on:

EDITORIAL LEADERSHIP

EVENTS & FORMAT EXPERTISE DIGITAL KNOW-HOW

• STRONG OFFLINE ADV MKT SHARE
• GROWING ONLINE/VIDEO POSITION
• UNIQUE BTL OFFERING

• STRONG DATA MONETIZATION

• STRONG GROWTH PROSPECTS

• INTERNATIONAL DEVELOPMENT
• ATTRACTIVE PARTNERSHIP POSSIBILITIES

Looking ahead: financial ambitions for 2018

Sustainable revenue growth

Profitability aligned with main peers (15% EBITDA margin)

Continuous deleveraging for a sustainable debt ratio

Re-rating of the business and value creation

Agenda

Highlights

Market & Business Trends

2014 FY Results

Outlook and Strategic Opportunities

Business Units Back up

Media Italy – P&L

EUR million

	4Q14	4Q13	YoY	2014	2013	YoY
Circulation	72.8	69.3	5 1%	287.8	298.3	(3 5%)
Advertising	66.5	70.1	(5 1%)	219.5	234.3	(6 3%)
Other	8.3	7.3	13 7%	24.6	24.4	0 8%
TOTAL REVENUE	147.6	146.7	0 6%	531.9	557.0	(4 5%)
add O/W on	23 6	17 1		76 9	67 1
EBITDA ex NR Items	34.0	28.3	20 1%	61.5	38.9	58 1%
Non Recurring Items	(2.0)	(2.1)		(1.4)	(59.9)
EBITDA	32.0	26.2	22 1%	60.1	(21.0)	>100%

EUR million

	4Q14	4Q13	YoY	2014	2013	YoY
Circulation Advertising Other	38.4 51.3 11.3	43.0 42.9 12.5	(10 7%) 19 6% (9 6%)	158.0 156.7 43.4	179.5 147.0 45.2	(12 0%) 6 6% (4 0%)	advertising on-line 25.0%
TOTAL REVENUE	101.0	98.4	2 6%	358.1	371.7	(3 7%)
add O/W on	1 0	2 2		2 5	13 5
EBITDA ex NR Items	22.1	14.6	51 4%	27.3	7.0	>100
Non Recurring Items	(1.1)	(3.1)		(27.8)	(18.0)
EBITDA	21.0	11.5	82 6%	(0.5)	(11.0)	ns

Books – P&L
EUR million
	4Q14	(1) 4Q13	YoY	2014	(1) 2013	YoY
Fiction & non-Fic. Italy	39.8	44.1	(9 8%)	108.5	124.0	(12 5%)
Education	15.8	16.2	(2 5%)	86.2	91.2	(5 5%)
Rizzoli International	10.0	11.5	(13 0%)	26.3	26.7	(1 5%)
Other	1.6	0.0	ns	1.6	9.2	(82 6%)
TOTAL REVENUE	67.2	71.8	(6 4%)	222.6	251.1	(11 4%)
EBITDA ex NR Items	5.2	8.0	(35 0%)	9.3	8.8	5 7%
Non Recurring Items	(4.4)	0.6		(7.3)	(5.0)
EBITDA	0.8	8.6	(90 7%)	2.0	3.8	(47 4%)

(1) The Partworks Division were sold on August 1, 2013. On December 11, 2013 the equity investment in Editions d'Art Albert Skira was sold and on March 1, 2014 the line of business La Tribuna was sold.

EUR million

	4Q14	4Q13	YoY	2014	2013	YoY
Advertising and Events	91.0	88.4	2 9%	297.5	289.4	2 8%
publishing O/W RCS	74 3	80 6		248 2	267 6
3rd publishers party	15 8	7 0		45 9	11 9
Sport Events	2.7	3.3	(18 2%)	48.0	41.0	17 1%
TOTAL REVENUE	93.7	91.7	2 2%	345.5	330.4	4 6%
EBITDA ex NR Items	1.4	(1.8)	ns	(0.6)	(13.6)	ns
Non Recurring Items	(0.3)	(2.8)		(1.1)	(18.0)
EBITDA	1.1	(4.6)	ns	(1.7)	(31.6)	ns

Disclaimer

Investor Relations Department

+39 02 2584 5508 Federica.demedici@rcs.it Federica De Medici

Forward-looking Statements

Statements contained in this document, particularly the ones regarding any RCS MediaGroup possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties.

RCS MediaGroup actual results and developments may differ materially from the ones expressed or implied by the following statements depending on a variety of factors. Any reference to past performance of RCS MediaGroup shall not be taken as an indication of future performance.

This communication does not constitute an offer or solicitation for the sale, purchase or acquisition of securities of any of the companies mentioned in any jurisdiction and is directed to professionals of the financial community.

Roberto Bonalumi, the Manager responsible for drawing up the company's accounting statements, hereby declares, pursuant to article 154-bis, paragraph 2 of the "Testo Unico della Finanza" (Legislative Decree n. 58/1998), that the information contained in this presentation corresponds to those one contained in the group's documents and books accounting records.