Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the Half-Year Report at 30 June 2020, presented by CEO Ernesto Mauri.

Highlights of first half 2020
The first half of 2020 was inevitably marked by the effects of the COVID-19 emergency.

Starting from the first ten days of March, in fact, the gradual and increasingly widespread application of restrictive measures has significantly curtailed most of the activities related to the businesses where the Group operates as a leader.

From 12 March up to the end of April, the government measures to contain the pandemic led to the closure of bookstores throughout Italy, with the resulting suspension of the activities related to the Group’s Retail business.

Parallel to that and over the same period, the Trade Books business had to tackle the shutdown of the physical channel for the marketing of its products and, consequently, could only rely on the online channel.

The emergency measures concurrently led to the closure of museum sites, archaeological parks and relating bookstores across all Italian regions, with the resulting interruption of the Group’s activities in managing services for museums and cultural heritage.

Lastly, the Media business[1] too recorded declines following closure of part of the newsstands in Italy and the reduction of advertising investments.

In order to tackle this situation, the Mondadori Group has set up and implemented a series of actions and measures aimed, first and foremost, at guaranteeing the safety of its people, enabling them, where possible, to perform their work remotely (smart working), and at alleviating the impacts of the measures adopted by the authorities, in order to safeguard the company’s operating and financial profile.

To this end, the Group has:

• taken steps to contain and cut operating costs also by renegotiating contracts and reviewing rates, with total savings estimated at € 13 million for the entire year;
• implemented actions to reduce the cost of personnel, estimated at approximately € 15 million for the entire year, by using outstanding holidays and resorting to social safety nets, as well as resolving to reduce the variable remuneration of the Group’s Management for 2020 and, lastly, suspending remuneration and hiring policies;
• placed particular emphasis on the Group’s working capital (with specific actions on customers and suppliers);
• implemented a policy of deferred payments in favour of the book chains, independent and franchised bookstores of the Retail Area, aimed at safeguarding the strength of the distribution channels and supporting the production chain in the Group’s area of operation.

For the different business activities:

• in the Trade Area, the editorial plans have been reshaped and rescheduled;
• in the Educational Area, school textbooks were affected only to a small extent, while actions have been taken to curb or eliminate the costs related to the stoppage and canceling of museum and archaeological park activities;
• in the Media Area, a different scheduling of magazines at newsstands and a strict policy has been adopted to reduce production costs;
• in the Retail Area, a plan has been implemented to streamline the units of the area and the points of sale.

Performance at 30 June 2020
Starting from May, with the lifting of lockdown restrictions, the Trade Books market has shown stronger and stronger signs of recovery with double-digit growth rates that marked the last six weeks of the half-year period and still in progress.

The recovery has propelled the growth of the Trade and Retail businesses, allowing them to partly regain the revenue lost in the March-April period.

As a result of the outlined context, the Group’s operating and financial profile at 30 June 2020 is as follows:

• consolidated revenue amounted to € 288.9 million, down by -24% versus € 380 million in the same period of 2019. Net of the changed scope of consolidation of the Media Area in 2019, the drop stands at -22.2% and is attributable mainly to the effects of COVID-19;

• IFRS 16 adjusted EBITDA amounted to € 11 million versus € 21.8 million in the prior year (down by approximately € 10.9 million versus the same period of 2019).

Also at the adjusted EBITDA level, the decline basically reflects the consequences of COVID-19 as well as the first positive effects of the countermeasures adopted by the Group.

The cost reduction measures for € 31.8 million have contained the impacts from the contraction in revenue and margins caused by the COVID-19 emergency;

• IFRS 16 EBITDA amounted to € 8.4 million versus € 20.6 million at 30 June 2019;

• IFRS 16 EBIT amounted to € -17.2 million, down by € -19.3 million versus 30 June 2019, due mainly to the trend of the abovementioned components and the write-down and start of the amortization process of a number of titles;

• The consolidated result before tax amounted to € -30.9 million versus € -1.6 million in first half 2019, due also to financial expense (€ 4 million), the adjustment of the investment in Reworld Media (€ -6.6 million) and the loss of the associates consolidated at equity (€ -3.4 million);

• The result from continuing operations amounted to € -25 million versus € -4.6 million at 30 June 2019 (€ -20.4 million). The decline was strongly affected by the above non-operating and extraordinary cost components, which total approximately € 22 million, only partly offset by tax income of approximately € 5.9 million recorded by the Group during the year;

• The Group’s net result amounted to € -25 million versus € -1.9 million in first half 2019 (which had also included € 2.7 million from discontinued operations);

• Net debt (before IFRS 16) amounted to € -130.1 million, improving strongly versus € -204.2 million at 30 June 2019 (€ +74.1 million), due also to the proceeds (€ 62.8 million) from the disposal completed in July 2019 of Mondadori France and the positive cash generation from ordinary operations in the last 12 months (€ 36.7 million net of discontinued operations), despite the highly deteriorated context.

The IFRS 16 Net Financial Position stood at € -219.5 million and includes the IFRS 16 impact of
€ -89.4 million.

At 30 June 2020, the number of employees in the context of the Mondadori Group’s continuing operations amounted to 1,928 units, down by approximately -9% versus 2,117 units at 30 June 2019, as a result of the disposal of a number of titles in the Media Area (in December 2019) and activities aimed at increasing the efficiency of the individual business areas.

Despite the significant stress put on the global economic system at this moment in time, the Group’s financial situation and medium-term prospects allow it to maintain a positive attitude towards business developments, even in an economic framework inevitably affected by the COVID-19 emergency.

Business outlook
To date, Group forecasts reflect, on the one hand, the encouraging signs coming from the market, particularly in the Group’s main business areas of operation and, on the other, do not include any effects from a fresh outbreak of the pandemic, such as new lockdown measures on a national scale.

Based on the current scenario, the Group estimates a drop in revenue by between 16% and 18% versus 2019, due also to the trend of the various businesses; a solid double-digit (adjusted) EBITDA margin (approximately 11%-12%) and positive cash generation, albeit down versus the past.

The trend of the Group’s financial debt at the end of the period will depend on the amount of restructuring costs that will be financed through the cash flow from ordinary operations, with an estimate of the Group’s net financial position in any case no higher than € -55.4 million at 31 December 2019.

Performance of business areas

• BOOKS

At the beginning of May, the gradual reopening of independent bookstores and book chains allowed the Trade Books market to make a strong recovery: in the last six weeks of the half-year period, book sales grew double-digit, reaching +13.5% in June alone versus the same period of the prior year.

This upswing allowed the market to mitigate and make up for the fall recorded in March (-29.2%) and April (-45.8%), bringing the overall contraction in terms of value at 30 June 2020 to -10.1%.

Against this backdrop, the Mondadori Group retained its leadership position with an overall market share of 24.8%[2] in Trade, outstripping the market performance by more than six percentage points in the last six weeks of the half-year period.

Revenue in the Books Area amounted to € 145.9 million at 30 June 2020, down by 20.6% versus € 183.8 million in first half 2019. Specifically:

In the Trade Area, revenue amounted to € 90 million, down by -15.8% versus € 106.8 million at 30 June 2019, due to the abovementioned COVID-19 effects.

To cope with the closure of the distribution channel, the Group has revised its publishing schedule, pushing back the launch of new works by some of the most prestigious and successful authors to the second half of the year.

E-books and audiobooks (9% of total publishing revenue) bucked the trend versus physical books, with revenue up sharply during the lockdown period (+37%) versus the prior year.

Listening hours of the audiobook catalogue jumped by over 75% versus 2019, while downloads of e-books increased by 45%.

Revenue in the Educational Area amounted to € 52.8 million, down by -27.1% versus € 72.4 million in the same period of 2019.

School textbooks suffered a low impact from the pandemic, given the typical seasonal performance of the business that sees sales squeezed in the second half of the year following the adoption campaign.

The decrease in revenue in the Educational Area is attributable mainly to the closure of museums and archaeological sites under concession due to the health emergency, which prevented the museum business from achieving the expected results.

IFRS 16 adjusted EBITDA in the Books Area amounted to € 10.9 million versus € 16.2 million in 2019, a deterioration attributable to the negative trend in revenue, only partly mitigated by the cost containment actions implemented by Management.

IFRS 16 EBIT amounted to € 3.9 million versus € 9.7 million in 2019.

• RETAIL

As mentioned, in the first six months of 2020 the Trade Books market (which accounts for over 80% of Retail revenue^[3]) fell sharply versus the same period of the prior year (-10.1%^[4]) as a result of the COVID-19 emergency.

The gradual reopening of bookstores has allowed the market to rebound strongly, with an increase in June alone of +13.5%.

Revenue in the Retail Area in the first six months of the year amounted to € 59 million, down by 27.5% versus € 81.4 million in the same period of the prior year, due to the government measures to tackle COVID-19.

The market share stood at 10.9% in the first half of the year, as the Group’s performance was hindered by the fact of being able to operate only through its online channel during the lockdown period.

In June, the Group followed the same strong trend of the market: revenue in the Area, versus the same month of the prior year, dropped by only -4.1%, and the market share – in the month – stood at 12.1%, thanks, in particular, to the positive performance of the franchised stores.

Mention should particularly be made of the performance of the online channel, whose sales in the first 6 months grew by +71.6% versus first half 2019, and by as much as approximately 190% during the lockdown period.

IFRS 16 adjusted EBITDA amounted to € -2.8 million versus € -0.6 million in the same period of 2019.

Despite the drastic drop in revenue, the impact in terms of EBITDA was contained thanks to careful cost management and a deep organizational and process revision, involving both the central units and the points of sale, carried out in the second half of 2019 and continued even during the harshest period of COVID-19.

Excluding the lockdown months, Mondadori Retail improved margins both in the first two months of the year (€ +0.3 million versus the same period of the prior year) and in June alone (€ +0.7 million versus the same period of the prior year).

IFRS 16 EBIT amounted to € -8.2 million (versus € -6 million in first quarter 2019).

• MEDIA

The May surveys show that the advertising market was heavily impacted by COVID-19, with declines reported across all channels, including digital down by -17.2% and magazines by -41.5%[5].

In terms of circulation, the Italian magazines market fell by 11.3% during the period[6].

Against this backdrop, the Mondadori Group retained its position as market leader with a share in terms of value of 23.7%[7] and as the leading multimedia publisher in Italy on the web, with a reach of 84% (approximately 33 million unique users in May)[8], and in social media with an aggregate fan base of 33.5 million spread across 100 social profiles[9].

At 30 June 2020, revenue in the Media Area amounted to € 95.8 million (-26.8% versus € 130.9 million in 2019). Net of the disposal of a number of titles, the decrease came to -21.5%.

Specifically:

• circulation revenue fell by approximately -23%, a performance affected by both the COVID-19 impact and the disposal of a number of titles in 2019; net of these discontinuities, the decline is estimated at approximately -9%.
• advertising revenue, of which the digital component accounts for over 50%, was down by approximately -42% overall.

This is the class of revenue most affected by COVID-19 and the lockdown, which led to the cancellation of such a significant event as the Salone del Mobile, and a decrease in proximity marketing solutions (AdKaora). On a like-for-like basis and net of COVID-19 impacts, the change in advertising revenue would be approximately -4, -5%.

• other revenue, which includes distribution activities, fell by -9.6% versus the prior year, reflecting both the performance of the circulation market and the drop in royalties generated by the international editions of Grazia.

Adjusted EBITDA stood at € 2 million, down by approximately € -5 million only versus first half 2019, as the marked slippage in revenue was offset by effective measures to contain operating costs.

IFRS 16 EBIT, which reflects the write-down and the start of the amortization process of a number of titles (for a total value of € 7.3 million), amounted to € -7.9 million versus € 3.7 million in first half 2019.

The documentation relating to the presentation of the results at 30 June 2020, is made available through the authorized storage mechanism 1Info (www.1info.it) and in the Investors section of the Company website www.gruppomondadori.it.

The Financial Reporting Manager – Alessandro Franzosi – hereby declares, pursuant to Article 154 bis, paragraph 2, of the Consolidated Finance Law, that the accounting information contained herein corresponds to the Company’s records, books and accounting entries.

Annexes (in the complete pdf):

• Consolidated balance sheet
• Consolidated income statement
• Consolidated income statement – II quarter
• Group cash flow
• Glossary of terms and alternative performance measures used

[1] As from 1 January 2020, the activities referring to Mondadori Group magazines and websites, as well as the investments in the Magazines Italy Area, were transferred to the wholly-owned subsidiary Mondadori Media S.p.A.

[2] GFK (in terms of value at June)

^[3] Product revenue excluding Club revenue

^[4] GFK (in terms of value at June)

[5] Nielsen, cumulative figures at May 2020

[6] Internal source: Press-di, figures at May 2020 (newsstands + subscriptions channel) in terms of value

[7] Internal source: Press-di, figures at May 2020 (newsstands + subscriptions channel) in terms of value

[8] Comscore (May 2020)

[9] Shareablee (June 2020)

The Mondadori Group has redesigned its Trade Books Area under the leadership of the chief executive of Mondadori Libri S.p.A. Enrico Selva Coddè, with the aim of pursuing growth and development opportunities for its publishing houses.

“We have defined a new organisational model that will enable us to respond more effectively to the central challenges in trade publishing, a sector in increasingly rapid evolution, also at the international level,” declared Enrico Selva Coddè. “A necessary change to look to the future of the country’s leading cultural industry with the innovative approach that has always characterised our publishing houses,” Selva Coddè concluded.

Consequently, two new crossover departments have been created that will report directly to Enrico Selva Coddè.

The first, the department of General Operations, will be headed up by Filippo Guglielmone, with the aim of orienting the business at the highest possible level of cost efficiency and service possible; operations and sales will be integrated in a single process to drive value generation and make it possible to optimise time-to-market, increase customer satisfaction and facilitate the growth of the publishing houses.

The second, the department for Strategic Marketing, Rights and Acquisitions, to be led by Lorenzo Garavaldi, aims to reinforce the company’s role in the publishing market through analysis and the definition of market strategy, the coordination of acquisition activities and the identification of development priorities.

Reporting to Enrico Selva Coddè, the publishing houses will also absorb product marketing activities giving them all control over communication, in line with a scenario in which the enhancement of authors’ work is part of a single publishing effort that goes from the title to readers’ comments.

The publishing houses are led by Francesco Anzelmo, General Manager of Mondadori; Ernesto Franco, General Manager and Editorial Director of Einaudi; Massimo Turchetta, General Manager of Rizzoli Trade and Publishing & Rights Development; Stefano Peccatori, General Manager of Sperling & Kupfer, Piemme and Mondadori Electa, and Lorenzo Garavaldi, General Manager of BU Ragazzi.

What will it be like going back to classes? 83.7% of the students who responded to a Studenti.it, survey say that they are concerned. In fact, of these, 41% think that everything will be more complicated in September while the remaining 42.7% are uncertain what will happen.

The biggest concern is about the health aspect: 45% wonder whether it will be safe to return to school, while a small percentage (8%) is worried that they will not be able to catch up with the syllabus. For  30% of those interviewd by Studenti.it lessons should have started up again before 14 September, in order to recoup what has been lost during the health emergency.

On the side of Italian students for more than 20 years, Studenti.it is preparing to go back to school and accompany kids as they make their return also by responding to their most frequent questions: How will we re-start? How will entrance tests be managed? How will we get to school and how will our habits have to change? Up-to-date editorial coverage will be available on the site, with a back to school special, everything new in the school calendar, as well as advice and suggestions for the choosing a university, with dedicated formats such as the new orientation podcasts and the Facebook group for the medical school entrance test. There will, of course, also be weekly surveys to have a picture of what students are feeling and their expectations for lessons, plus a new schedule of live social media events “Tg Scuola“.

During the health emergency, with lesson suspended across the whole of Italy, digital became essential for students, teachers and parents. In response, Studenti.it increased and expanded its offer with an enormous quantity of free content and constantly available didactic resources, such as video lessons with study tips, a series of  podcasts “Studenti Explains”, a new way of exploiting online notes that reached  100,000 listeners per month and live social events with experts and YouTubers.

All of which has led – for the Mondadori Brand – to a  30% increase in the site’s traffic compared with last year (Source: Google Analytics, average March-April-May), arriving, in the month of April, a month of total lockdown, to 5 million unique users, +34% compared with April 2019 (Source: Total Audience April 2020), and an increase of 50% in views on the YouTube channel compared with the same period of last year.

Arnoldo Mondadori Editore S.p.A. (LEI Code 815600049A1F9AFE6666) announces the purchase on the MTA (Electronic Stock Market), in the period from 8 to 12 June 2020, of no. 85,000 ordinary shares (equal to 0.033% of the share capital) at an average unit price of Euro 1.1689 for a total amount of Euro 99,356.50.
These transactions were made under the authorization to purchase treasury shares approved by the Shareholders’ Meeting on 22 April 2020 (previously disclosed pursuant also to art. 144 bis of Consob Regulation 11971/99, to art. 5 of Regulation (EU) 596/2014 and to art. 132 of Legislative Decree
58/98).
The following table details the purchases made per day in the above period of Arnoldo Mondadori Editore S.p.A. ordinary shares, ISIN IT0001469383:

The purchases were made through the authorized intermediary Equita Sim S.p.A. (LEI Code 815600E3E9BFBC8FAA85).
Following the purchases made so far, Arnoldo Mondadori Editore S.p.A. holds no. 1,838,326 treasury shares, equal to 0.703% of the share capital and to 0.459% of the total amount of voting rights.
As a result of the operations described above, the treasury share buy back program launched on 1st June 2020, ended on June 8th 2020. During the plan have been bought a total nr. 550,000 Arnoldo Mondadori Editore own shares at an average price of € 1.0984 per share and for a total amount of €
604,146.49.
See detalis in pdf completo of the press release.

Arnoldo Mondadori Editore S.p.A. (LEI Code 815600049A1F9AFE6666) announces the purchase on the MTA (Electronic Stock Market), in the period from 1 to 5 June 2020, of no. 465,000 ordinary shares (equal to 0.178% of the share capital) at an average unit price of Euro 1.0856 for a total amount of Euro 504,789.99.

These transactions were made under the authorization to purchase treasury shares approved by the Shareholders’ Meeting on 22 April 2020 (previously disclosed pursuant also to art. 144 bis of Consob Regulation 11971/99, to art. 5 of Regulation (EU) 596/2014 and to art. 132 of Legislative Decree 58/98).

The following table details the purchases made per day in the above period of Arnoldo Mondadori Editore S.p.A. ordinary shares, ISIN IT0001469383

The purchases were made through the authorized intermediary Equita Sim S.p.A. (LEI Code 815600E3E9BFBC8FAA85).

Following the purchases made so far, Arnoldo Mondadori Editore S.p.A. holds no. 1,753,326 treasury shares, equal to 0.671% of the share capital and to 0.437% of the total amount of voting rights.

Purchases in detail in the complete pdf.

Arnoldo Mondadori Editore S.p.A. announces the launch today of a treasury share buyback plan under Article 5 of Regulation (EU) no. 596/2014, in execution of the resolution adopted by the Ordinary Shareholders’ Meeting held on 22 April 2020, authorizing:

• the purchase and disposal of treasury shares for a maximum amount of up to 0.21% of the share capital, which is intended to provide the Company with the no. 543,232 shares required over the three-year period to meet the obligations under the 2020-2022 Performance Share Plan approved by the same Shareholders’ Meeting;
• the continuation of the buyback plan for the purchase of the treasury shares required to service the 2018-2020 Performance Share Plan and the 2019-2021 Performance Share Plan in the manners and within the limits set out in the relevant Regulations.

Pursuant to Delegated Regulation (EU) 2016/1052, details of the treasury share buyback plan are shown below.

• Purpose of the plan

The purpose of the plan is the buyback of Arnoldo Mondadori Editore S.p.A. treasury shares to service the 2020-2022 Performance Share Plan approved by the Shareholders’ Meeting held on 22 April 2020, the 2019-2021 Performance Share Plan and the 2018-2020 Performance Share Plan.

• Maximum amount in cash allocated to the plan

Buybacks will be made at a minimum unit price not lower than the official Stock Exchange price on the day before the purchase transaction, reduced by 20%, and at a maximum unit price not higher than the official Stock Exchange price on the day before the purchase transaction, increased by 10%. The definition of volumes and unit purchase prices will be made in accordance with the conditions set out in Article 3 of Delegated Regulation (EU) 2016/1052; specifically, no shares will be purchased at a price higher than the higher between the price of the last independent trade and the price of the highest current independent bid on the trading venue where the purchase is carried out.

• Maximum number of shares to purchase

Purchases will regard a maximum of 550,000 ordinary shares (equal to 0.2104%) for the 2020-2022 Performance Share Plan, the 2019-2021 Performance Share Plan and the 2018-2020 Performance Share Plan, in the manners and within the limits set out in the relevant Regulations.

The maximum total amount of shares under the plan is therefore within the limits of law, taking account of the treasury shares already held by the Company.

To date, Arnoldo Mondadori Editore S.p.A. holds no. 1,288,326 treasury shares, equal to 0.4927% of the share capital.

• Duration of the plan

The current authorization runs until the Shareholders’ Meeting called to approve the financial statements for the year ending 31.12.2020 and is renewable prior to the Shareholders’ authorization.

• Buyback procedures

The treasury share buyback plan will be coordinated by an authorized intermediary who will make the purchases independently, with no influence from Arnoldo Mondadori Editore S.p.A. as far as the time of purchase is concerned.
Buybacks will be made pursuant to the combined provisions of Article 132 of Legislative Decree no. 58/1998 and of Article 5 of Regulation (EU) 596/2014, Article 144-bis of the Issuer Regulation, and the EU and national legislation on market abuse (including Delegated Regulation (EU) 2016/1052), in accordance with the resolutions of the above Shareholders’ Meeting of 22 April 2020, in the terms previously disclosed to the market and in accordance with applicable law. Daily purchase volumes will not exceed 25% of the daily average volume of Arnoldo Mondadori Editore S.p.A. shares traded over the 20 trading days before the dates of purchase.

Any subsequent changes to the above buyback plan will be promptly disclosed to the public by the Company in the manners and within the time limits of applicable law.

The transactions made will be disclosed to the market in the manners and within the time limits of applicable law.

Today, the Shareholders’ Meeting of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, approved the financial statements for the year ended 31 December 2019 and reviewed the 2019 consolidated financial statements of the Mondadori Group. The net result amounts to € 28.2 million (IFRS 16), in line with forecasts.

In his report, CEO Ernesto Mauri presented the key figures on the performance of the Mondadori Group in 2019, as disclosed to the market on 17 March.
The Chief Executive Officer also confirmed that the current events related to the Covid-19 emergency do not change the Group’s solid medium-long term prospects.

The Shareholders’ Meeting, also following the voting intention expressed by the shareholder Fininvest S.p.A. and disclosed on 8 April, resolved not to distribute a dividend, as proposed on 17 March 2020 by the Board of Directors, and to allocate the entire profit of Arnoldo Mondadori Editore S.p.A. at 31 December 2019 to the extraordinary reserve, amounting to € 28.2 million (IFRS 16).

The Shareholders’ Meeting resolved on the following additional items on the agenda:

Report on remuneration policy and compensation paid
The Shareholders’ Meeting approved Section One of the Report on remuneration policy and compensation paid. The Shareholders’ Meeting also voted in favour of Section Two of the Report.

Renewal of the authorization to purchase and dispose of treasury shares
Given the approaching expiry of the previous authorization resolved on 17 April 2019, the Meeting renewed the authorization to purchase treasury shares up to a cap of 10% of its share capital. The Shareholders’ Meeting also authorized to sell the Treasury Shares acquired by the Company in compliance with Article 2357-ter of the Italian Civil Code.
To date, Arnoldo Mondadori Editore S.p.A. holds a total of no. 2,938,293 treasury shares (1.124% of the share capital).

Here below is the information provided, also with regard to the provisions of Article 132 of Legislative Decree 58/1998 and to the provisions of Article 144-bis of Issuer Regulation no. 11971/1999, on the authorization issued by the Shareholders’ Meeting.

Motivations
The motivations underlying the request for the authorization to purchase and dispose of treasury shares refer to the opportunity to attribute to the Board of Directors the power:

• to use the treasury shares purchased as consideration in the acquisition of interests as part of the Company’s investment policy;
• to use the treasury shares purchased against the exercise of option rights, including conversion rights, deriving from financial instruments issued by the Company, its subsidiaries or third parties and to use the treasury shares for lending, exchange or transfer transactions or to support extraordinary transactions on the Company’s capital or financing transactions that imply the transfer or sale of treasury shares;
• to undertake any investments, directly or through intermediaries, including for the purpose of containing abnormal movements in share prices, stabilizing share trading and prices, supporting the liquidity of the share on the market, in order to foster the regular conduct of trading beyond normal fluctuations related to market performance, without prejudice in any case to compliance with applicable statutory provisions;
• to rely on investment or divestment opportunities, if considered strategic by the Company, also in relation to available liquidity;
• to dispose of treasury shares as part of share-based incentive plans pursuant to Article 114-bis of the TUF, and of plans for the free allocation of shares to employees or members of the governing or supervisory bodies of the Issuer or of an associate or to Shareholders.

Duration
The authorization to purchase treasury shares is set to last until the approval of the financial statements for the year ending 31 December 2020, while the authorization to sell is granted to last for an unlimited period, given the absence of provisions in this regard pursuant to the provisions in force and the opportunity to allow the Board of Directors to make use of the maximum flexibility, also in terms of time, to carry out the acts of disposal of the shares.

Maximum number of purchasable treasury shares
The authorization refers to the purchase, including in more than one tranche, of a maximum number of ordinary shares with a nominal value of € 0.26, also taking into account the ordinary shares held directly or indirectly in the portfolio from time to time, up to a cap of 10% of the Company’s share capital.

Criteria for purchasing treasury shares and indication of the minimum and maximum purchasing cap
The purchases would be made in compliance with the principle of equal treatment of shareholders under Article 132 of the TUF, in accordance with any of the procedures set out in Article 144-bis of the Issuer Regulation, to be identified from time to time, and any other applicable regulations, as well as, where applicable, the market practices allowed from time to time in force.
Additionally, share purchase transactions may also be carried out in the manner envisaged in Article 3 of EU Delegated Regulation no. 2016/1052 in order to benefit, if the conditions are met, from the exemption under Article 5, paragraph 1, of EU Regulation no. 596/2014 on market abuse with regard to inside information and market manipulation.

As far as disposal transactions are concerned, the authorization would allow the adoption of any appropriate method to fulfill the purposes pursued – including the use of treasury shares to service stock incentive plans and/or the transfer of real and/or personal rights and/or stock lending – to be carried out either directly or through intermediaries, in compliance with the relevant laws and regulations in force.

Without prejudice to the fact that purchases of treasury shares would be made in accordance with the time limits, conditions and requirements established by the applicable Community legislation and by the admitted market practices, the minimum and maximum purchase price would be determined for a unit price not lower than the official Stock Exchange price of Arnoldo Mondadori Editore S.p.A. shares on the day preceding the purchase transaction, reduced by 20%, and not higher than the official Stock Exchange price on the day preceding the purchase transaction, increased by 10%.
However, in terms of purchase prices, the additional conditions set forth in Article 3 of the above EU Delegated Regulation 2016/1052 would apply.
With regard to the provisions of Article 2357, paragraph 1, of the Italian Civil Code, purchases would in any case be made within the limits of the available “extraordinary reserve” as shown in the last duly approved financial statements.
In any case, purchases would be made, in terms of definition of volumes and unit prices, in accordance with the conditions governed by Article 3 of EU Delegated Regulation 2016/1052, and in particular:

• no shares shall be purchased at a price higher than the higher between the price of the last independent trade and the price of the highest current independent bid on the trading venue where the purchase is carried out;
• in terms of volumes, no more than 25% of the average daily trading volume of Arnoldo Mondadori Editore S.p.A. shares shall be purchased in the 20 trading days prior to the dates of purchase.

Purchases instrumental in the support to market liquidity shall also be made in accordance with the conditions provided by the admitted market practices.

2020-2022 Performance Share Plan
The Shareholders’ Meeting held today approved, pursuant to Article 114-bis of Legislative Decree 58/1998 and in keeping with the introduction of performance share plans approved in the past for the medium/long-term remuneration of executive directors and key management personnel, the establishment of a Performance Share Plan for the three-year period 2020-2022 intended for the CFO – Executive Director and certain managers of the Company, in accordance with the conditions previously disclosed to the market on 17 March 2020, pursuant to Article 84 bis, paragraph 1, of Issuer Regulation 11971/1999.

For details on the 2020-2022 Performance Share Plan, the beneficiaries and the main characteristics of the Regulations of the Plan, reference should be made to the Information Document drawn up by the governing body, pursuant to CONSOB Regulation no. 11971/1999, and to the Explanatory Report, published on the Company’s website www.gruppomondadori.it “Governance/Shareholders’ Meeting” section.

The minutes of today’s Shareholders’ Meeting will be made publicly available in the manner and within the time limits of law.

Effective resignation of director and key management personnel
Following the disclosure made on 20 March 2020, the Company notes that as of today’s date, following the Shareholders’ Meeting, the resignation of Oddone Pozzi from his position as (executive) Director has become effective; the resignation from the position of Group Director and Financial Reporting Manager will be effective, instead, from 3 June 2020. No indemnities or benefits are given following termination of the position of director, without prejudice to the remuneration policy approved by the company. Termination of the position of Key Management Personnel, except as provided for under the 2019 MBO and the 2017-2019 Performance Share Plan, envisages a 24-month non-compete agreement from the effective date of the resignation, with a mandatory indication of the companies understood as competitors and an amount, in the context of non-compete obligations, equal to an annual consideration for the entire period. The non-compete agreement envisages the application of penalties in the event of a breach of the obligation. This agreement qualifies as a related-party transaction of lesser importance pursuant to the Related Party Procedure adopted by the Company, and was reviewed in advance by the Related Party Committee, which, in accordance with the applicable regulations, issued a favorable opinion in consideration of the fairness and substantial expediency of the conditions provided (consistent with the market practices taken as benchmark) and of the Company’s interest, given the strategic and top management role held in the Group. To date, Oddone Pozzi holds no shares in the Company.

By illuminating Palazzo Mondadori in the colours of the Italian national flag, the Tricolore, we want to demonstrate a sentiment of solidarity and hope for the whole world and symbolically support our country in this extended period of emergency and social isolation.
The colours of our flag represent a metaphorical embrace from each of us from #NoiDellaMondadori to all those in difficulty and an expression of gratitude to the people who at this time are working on the front line with a sense of duty and self-sacrifice to protect and care for our general wellbeing.
It is our hope that the red, white and green colours that illuminate the headquarters of the Group, the building designed by Oscar Niemeyer, can help to stimulate renewed hope that, together, we can overcome this great challenge.

Arnoldo Mondadori Editore S.p.A. announces that the Shareholders’ Meeting will be held at the offices of Notary Anna Pellegrino in Piazza della Repubblica 28, Milan – instead of in Via Mondadori 1, Segrate, as indicated in the notice of call of 23 March 2020 – in accordance with current regulations regarding the COVID-19 health emergency. The meeting will be held on Wednesday 22 April 2020 at 10.00 a.m. in first call and, if necessary, in second call on Wednesday 20 May 2020, at the same time and place by telecommunication means.

The Company additionally points out, referring to the abovementioned Notice of Call, that, pursuant to Legislative Decree No. 18/2020 (Article 106, paragraph 4), attendance in the Shareholders’ Meeting may take place exclusively through the Appointed Representative pursuant to Article 135-undecies of the TUF. As for the manners, reference is made to the indications in the specific paragraph of the Notice of Call (Proxy to the Company’s Appointed Representative) and to the proxy forms published on the website www.gruppomondadori.it (Governance section).

With regard to the proposal of the Board of Directors of Arnoldo Mondadori Editore (Ame) adopted on 17 March 2020 on the allocation of profit for 2019 and the distribution of dividends, having acknowledged the Ame Board of Directors’ assessment on its ability to generate cash flows and to support a balanced dividend policy, Fininvest takes note, however, of the current developments of the COVID-19 emergency and the continuing uncertainty on the slowdown that may impact on demand and the economic cycle, also as a result of the measures adopted in Italy and at international level to contain and restrict production activities.
While confirming its agreement with the reasons underlying the proposal, given the scenario that has materialized in the meantime, Fininvest believes that it is in Ame’s paramount interest at this moment to have all the operating and financial resources at disposal to counter the emergency. For a timely disclosure to the market, Fininvest accordingly announces that, at the Shareholders’ Meeting of Ame, called on 22 April, and for this reason alone, it will decide not to accept the original proposal of the Board of Directors on the distribution of the dividend, thus leaving it up to the subsequent assessment of the Board to call a Shareholders’ Meeting in the second half of 2020 to propose the possible distribution of reserves, should the economic scenario allow so as a result of greater visibility on the impact of the COVID-19 emergency.