Price sensitive

The Board of Directors of Arnoldo Mondadori S.p.A. today approved a proposal by the company’s Remuneration Committee for the assignment for the year 2008 of the options pertaining to the stock option plan deliberated by the AGM of 26 April 2006 and referring to the three-year period 2006/2007/2008.

In particular, the Board defined the assignment of a total of 2,850,000 options to a total of 69 beneficiaries.

The plan is based on the annual assignment of options, which are personal and non-transferable, for the acquisition of Mondadori ordinary shares held by the company in its Treasury Stock – in the ratio of one share (regularly held) for each option exercised – at an exercise price of not less than the arithmetical average of the reference price for Mondadori shares in the period from the date of assignment of the options to the same day of the previous calendar month. The exercise of options may only be made in a single operation, in the exercise period subsequent to the stipulated thirty-six month vesting period.

This document contains the information, for the year 2008 and with specific reference to the assignments agreed today by the Board of Directors, required by the terms of Art: 84 bis, Para 5, of the CONSOB regulation n° 11971/1999 and subsequent modifications (“Issuers’ Regulations”).

Such information is provided, where applicable, according to the outline 7 of tf attachment 3 A of the Issuers’ Regulations.

TERMS USED

The terms listed below and used in this document may be defined as follows:

Assignment 2008: the allocation to beneficiaries of options for 2008 deliberated by the Board of Directors on 19 June 2008;

Treasury Stock: ordinary shares of Arnoldo Mondadori Editore S.p.A. with a nominal value of €0.26 for each share, traded in the blue chip segment of the electronic stock market managed by Borsa Italiana S.p.A., and held by the company as treasury stock as per Art. 2357 of the civil code;

Beneficiaries: the persons identified by the Board of Directors on 19 June 2008 as beneficiaries of the options for the year 2008;

Options: the right, personal and non-transferable, given to beneficiaries by the Board of Directors on 19 June 2008 and exercisable for the acquisition of shares from the treasury stock in the ratio of one share (regularly held) for each option exercised;

Exercise period: the period from 20 June 2011 to 19 June 2014, the period in which, exclusively in a single operation, options may be exercised;

Plan: the stock option plan, established, as per Art. 114 bis of Legislative Decree n° 58 of 24 February 1998, by the company’s Annual General Meeting of 26 April 2006 and referring to the three-year period 2006/2007/2008;

Exercise price: the price of €4.565, for purchase by the beneficiaries, for the exercise of each option allocated. The exercise price was determined by the Board of Directors on 19 June 2008 and corresponds to the arithmetical average of the reference price for Mondadori shares in the period from the date of assignment of the options to the same day of the previous calendar month;

Company: Arnoldo Mondadori Editore S.p.A., corporate address – Via Bianca di Savoia 12, Milan.

1. Beneficiaries

1.1 Names of beneficiaries who are members of the board of directors, or better, the management board of the issuer of financial instruments, of holding companies of the issuer and any companies directly or indirectly controlled by it.

1.2 Categories of employees or associates of the issuer of financial instruments and any holding or subsidiary companies of the same.

The Plan is aimed at beneficiaries to be identified by the Board of Directors, in response to proposals by the Remuneration Committee, from among those in the following categories:

– executives of the Company and its subsidiaries with functions having a relevant impact on the achievement of the Mondadori Group’s strategic objectives;

– directors of the Company and its subsidiaries;

– journalists employed by the Company with the role of editor or co-editor of a title;

– managers of the holding company with an executive role that is carried out in the interests of the Company.

The Plan is of “particular relevance” under the terms of Art. 114 bis of Legislative Decree. 58/1998 and Art. 84 bis para.2 of Issuers’ Regulations in that it foresees, among the possible beneficiaries identified, persons that:

a) are members of the board of directors of the Company;

b) are executives of the Company with regular access to privileged information and the powers to take management decisions that could impact on the evolution and future prospects of the Company.

With regard to the assignments for 2008, those indicated who are currently members of the board of directors of the Company are:

Marina Berlusconi – Chairman

Maurizio Costa – Deputy Chairman and Chief Executive

Carlo Maria Vismara – Director

1.3 Names of beneficiaries who are part of the following groups:

1.3 a) beneficiaries with executive functions, indicated in Art. 152-sexies, para 1, c)-c.2 in the share issuing compan

Not applicable.

1.3 b) persons with executive functions in directly or indirectly held subsidiary companies of a share issuer, when the book value of the stake in the aforementioned subsidiary company corresponds to more than fifty percent of the assets of the share issuer, as declared in the most recently approved annual report, as indicated in Art. 152-sexies, para. 1, c)-c.3

Not applicable

1.3 c) individuals with a controlling interest in the share issuer, who are employees or provide their professional services to the share issuer

Not applicable

1.4 a) description and number, of all of the executives with access to privileged information and with the powers to take management decisions that could impact on the evolution and future prospects of the share issuer, as indicated in Art. 152-sexies, para. 1, c)-c.2

There are 9 executives among the beneficiaries of the assignment for 2008 with regular access to privileged information and the powers to take management decisions that could impact on the evolution and future prospects of the Company, as indicated in Art. 152-sexies, para. 1, c)-c.2 in the Issuers’ Regulations.

These executives – the heads of the business divisions and the central functions of the Company – fall within the description of relevant individuals identified by the board of directors and subject, as per Art. 114 para. 7 of D.Lgs. 58/1998, to the obligations for the communication of operations involving shares issued by the Company or other financial instruments linked to the shares.

1.4 b) description and number, of all of the executives with access to privileged information and with the powers to take management decisions that could impact on the evolution and future prospects of directly or indirectly held subsidiary companies of a share issuer, when the book value of the stake in the aforementioned subsidiary company corresponds to more than fifty percent of the assets of the share issuer, as declared in the most recently approved annual report, as indicated in Art. 152-sexies, para. 1, c)-c.3

Not applicable.

1.4 c) description and number of any other categories of employee or associate for which the Plan foresees different characteristics plan.

Not applicable.

1.4 d) in cases in which, with regard to stock options, for persons indicated in a) and b) exercise price is foreseen that is different from that for persons in the two categories, it is necessary to indicate separately those under a) and/or b), and their names

Different characteristics are not foreseen in the Plan for the categories of beneficiaries and, in particular, the exercise price for Options, which are determined by the criteria indicated in para. 4.19 below, are the same for all beneficiaries

2. The motivations for the Plan

2.1 The aims to be achieved by the application of the Plan

The reasons that underlie the Company’s adoption of the Plan are essentially to:

– provide the Company and its subsidiaries with a way of building loyalty among the management and aimed at focusing on the commitment to the attainment of strategic objectives;

– allow management itself, and therefore the Company, to develop an orientation toward the process of value creation.

The scale of the Options to be allocated to each of the Beneficiaries is established by the board of directors, in response to proposals by the Remuneration Committee.

Contextually, the board of directors has established – in line with the criteria outlined in para. 4.19 below – the exercise price and has deliberated the allocation of Options.

The Plan is extended across a period of time of three years (2006/2007/2008) and foresees periods for the exercise of Options subsequent to each year of reference of the plans. Such periods begin after a vesting period of 36 months from the date of the allocation of Options. The length of this last period, as well as being imposed by fiscal regulations with a view to recognising favourable fiscal conditions, is considered appropriate to the realisation of the Plan’s incentive and loyalty objectives.

2.2 Key variables, also in the form of performance indicators considered for the allocation of plans based on financial instruments

The implementation of the Plan, in terms of the effective exercising of the Options allocated to the Beneficiaries, is subordinate – as is outlined in para. 4.5 below – to the achievement of annual performance objectives of business and/or financial nature.

Exercise conditions are applicable to all Beneficiaries and there are therefore no different or particular conditions for different categories of Beneficiary

2.3 Elements underlying the determination of the scale of rewards based on financial instruments, or better, the criteria for its determination

The number of Options awarded to individual Beneficiaries has been determined by evaluating the effective capacity of each individual to effectively impact the attainment of results, on the basis of experience, competence and role within the Company.

2.4 Underlying reasons for the eventual allocation of compensation plans based on financial instruments not issued by the issuer of financial instruments, such as holding or subsidiary companies or third parties; where such instruments are not traded on regulated markets information concerning the criteria used to determine their attributable value

Not applicable.

2.5 Evaluations concerning significant implications of a fiscal or accounting nature that have affected the determination of the Plans

The structure of the Plan was conditioned by current fiscal legislation, in particular:

• the Art. 9, para. 4, a) of the TUIR, determined the calculation of the exercise price for Options, which is equal to the “normal value” of shares when Options are allocated;
• the Art. 51, para. 2-bis of the TUIR, imposed the stipulation of a minimum vesting period of 36 months subsequent to the allocation of Options

2.6 Eventual support for the Plan by the special Fund to provide incentives for employees of the Company, as per Art. 4, para. 112, of law n°350 of 24 December 2003

The Plan receives no support from the special Fund to provide incentives for employees of the Company, as per Art. 4, para. 112, of law n°350 of 24 December 2003

3. Approval process and timing for the allocation of instruments

3.1 / 3.2 The powers and functions attributed by the Shareholders to the board of directors for the implementation of the Plan/indication of those appointed to administer the Plan, their function and competence

As already stated, the Plan was established by and ordinary general meeting of the Shareholders of Arnoldo Mondadori Editore S.p.A. on 26 April 2006. The AGM attributed the functions for the management of the Plan to the board of directors, which operates with the support and in response to the proposals of the Remuneration Committee.

In particular, the board of directors, in agreement with the Remuneration Committee:

a) approves the regulations for the implementation of the Plan and any eventual modifications;

b) presents Plans to the AGM for approval in general outline and any eventual modifications of a significant nature;

c) identifies, in line with the categories indicated by the AGM, the Beneficiaries;

d) allocates Options to the identified Beneficiaries;

e) determines the exercise price for Options in line with the normal value of the shares;

f) identifies and quantifies, for each year length, the performance objectives to be reached before Options may be exercised and verifies that such objectives have effectively been attained;

g) regulates all emerging rights and/or rectifies the conditions of allocation in cases where extraordinary operations are effected on the Company’s share capital as per para. 4.23 below.

3.3 Any existing procedures for the revision of the Plan also in response to changes in the basic objectives

With the exception of that outlined in para. 4.23 below, no procedures are foreseen for the revision of Plan in response to changes in the basic objectives.

Any eventual substantial changes to the Plan that may become necessary in the light of changed business conditions and new Group objectives will be proposed by the board of directors to a General Meeting of the Shareholders.

3.4 Description of the way in which the availability and allocation of the financial instruments underlying the Plan are determined

Allocated Options include the right to purchase – in the ratio of one share (regularly held) for each option exercised – Mondadori ordinary shares already in the portfolio or to be acquired on the basis of authorisation from, in the most recent case, the AGM of 22 April 2008, as per Art. 2357 of the civil code and Art. 144-bis of the Issuers’ Regulations.

3.5 Role of each director in the determination of the characteristics of the mentioned Plans; any grounds for conflicts of interest on the part of directors involved

The characteristics and guidelines for the Plan have been drawn up by the Remuneration Committee and presented to the board of directors before, in turn, being presented to a General Meeting of the Shareholders.

It should be noted that the deliberations of the board of directors concerning, in particular, the identification of Beneficiaries and the allocation of Options, have been adopted:

– in line with the relative proposals made by the Remuneration Committee, which is made up of three non-executive directors who are also not Beneficiaries of the plan;

– with the abstention of interested directors.

3.6 Date decided by the competent body for the approval of the Plan by the Shareholders and any eventual proposal to the aforementioned body formulated by an eventual remuneration committee

The establishment of the Plan for 2006/2007/2008 was presented for approval to the AGM of 26 April 2006 following the decision taken by the board of directors on 14 March 2006 on the basis of the proposal made by the Remuneration Committee on 9 March 2006.

3.7 Date decided by the competent body for the assignment of instruments and any eventual proposal to the aforementioned body formulated by an eventual remuneration committee

The board of directors decided the date for the assignment of Options for the year 2008, indicating also the exercise price, on 19 June 2008 on the basis of the proposal made by the Remuneration Committee on 12 June 2008.

3.8 Market price, recorded on the aforementioned dates, for the financial instruments underlying the Plan, if traded on regulated markets

The market price (reference price) for Mondadori shares recorded on the dates as indicated in paras. 3.6 and 3.7 above, were as follows:

Date Reference price 09/03/2006 7.934 14/03/2006 8.027 12/06/2008 4.288 19/06/2008 3.911

3.9 In the case of plans based on financial instruments traded on regulated markets, in what terms and on what basis does the issuer take account, in the context of the identification of the timing for the allocation of the instruments in pursuance of such plans, of the possible temporal coincidence between:

i) such allocation and eventual decisions taken in this regard by the remuneration committee, and

ii) the circulation of eventual relevant information, as per Art. 114, para. 1; for example, in the case where such information are:

1. a. not already published and liable to have a positive impact on market prices, or even
2. b. already published and liable to have a negative impact on market prices

With regard to the timing of the allocation of Options, reference is made to the dates of the deliberations with which, as indicated above, the board of directors, following a proposal by the Remuneration Committee determined the exercise price for Options and allocated Options to the persons identified as Beneficiaries.

Such deliberations were not adopted at the same time as relevant information was published, as per Art. 114, para. 1 of D. Lgs. 58/1998, in order to avoid significant interference between the impact of such information on market share prices and the definition of the exercise price of the Options.

It should also be noted that the exercise price for Options is in any case defined on the basis of the average share price recorded over a significant period of time, as per Art. 9, para. 4, a) of the TUIR, as is outlined in more detail in para. 4.19 below, thereby reducing the effect of eventual unexpected increases or decreases in the share price.

4. Characteristics of the instruments attributed.

4.1 Description of the form in which plans for compensation based on financial instruments are structured;

The instruments attributed are in the form of Option rights that can be exercised, exclusively in a single operation, and in the exercise period indicated below, for the subsequent purchase, with the obligation for physical delivery, of Mondadori ordinary shares from treasury stock, in the ratio of one share for every Option exercised. In consequence, a stock option.

4.2 / 4.3 / 4.4 Indication of the period for the effective implementation of the plan, with reference also to eventual alternative cycles foreseen / terms of the plan / maximum number of financial instruments, also in the form of options, assigned in every fiscal year for each individual nominated or category indicated

The following table shows, for the assignment for 2008 agreed by the board of directors on 19 June 2008, the number of Options allocated:

– to Beneficiaries who are also currently members of the board of directors of the Company;

– to all of the executives who are Beneficiaries of the Plans who have regular access to privileged information and the powers to take management decisions that could impact on the evolution and future prospects of the Company, indicate in Art. 152 sexies, para 1, c)-c.2 of the Issuers’ Regulations;

– to all Beneficiaries of other categories as indicated in 1.2 (executives of the Company and its subsidiaries with functions having a relevant impact on the achievement of the Mondadori Group’s strategic objectives, including journalists employed by the company and its subsidiaries with the role of editor or co-editor of a title).

Also indicated is the exercise price – determined according to the criteria outlined in para. 4.19 below – and the exercise period.

Year of reference Name/Category Options allocated Allocation date Exercise price Exercise period 2008 Marina Berlusconi – Chairman 360,000 19.6. 2008 4.565 20.6.2011/19.6.2014 2008 Maurizio Costa – Chief executive 450,000 19.6.2008 4.565 20.6.2011/19.6.2014 2008 Carlo Maria Vismara – Director 70,000 19.6.2008 4.565 20.6.2011/19.6.2014 2008 All of the executive Beneficiaries indicated in Art. 152 sexies, para 1, c)-c.2 of the Issuers’ Regulations 550,000 19.6.2008 4.565 20.6.2011/19.6.2014 2008 All Beneficiaries of other categories (executives of the Company and its subsidiaries with functions having a relevant impact on the achievement of the Mondadori Group’s strategic objectives, including journalists employed by the company and its subsidiaries with the role of editor or co-editor of a title). 1,420,000 19.6.2008 4.565 20.6.2011/19.6.2014

4.5 Terms and conditions for the implementation of the plan, specifically whether the attribution of instruments is subordinate to the verification of certain conditions, or better, the achievement of determined results, also performance based; description of such conditions and results

The regulations for the Plan foresee that the board of directors identify the effective conditions for the exercise of Options attributed to the Beneficiaries with reference to the attainment of performance objectives of a business and/or financial nature on annual basis.

Satisfaction of the conditions for exercising Options is verified by the board of directors, for each year of the length of the Plan, within the first six months of the subsequent year to which the Options pertain.

The board, in agreement with the Remuneration Committee, has identified, as conditions for the exercise of Options, the attainment of performance objectives based on ROE and free-cash flow.

The conditions for exercise apply to all Beneficiaries of the Plans and there are therefore no different conditions for other categories of Beneficiary.

4.6 Indications of any eventual restrictions affecting the attributed instruments or on the instruments deriving from the exercise of options, with particular reference to the terms within which the subsequent transfer to the same company or to third parties is permitted or forbidden

Allocated Options are personal and non-transferable and not available “inter vivos” and may not be pawned or used as a guarantee for the Company or for third parties.

There are no restrictions on the availability of the shares deriving from the exercise of Options.

4.7 Description of any eventual conditions in regard to the attribution of the plans in the case in which beneficiaries effect hedging operations that make it possible to neutralise any restrictions on the sale of financial instruments allocated, also in the form of options, or instruments deriving from the exercise of options

Further to what is stated in para. 4.6 above, no specific conditions are foreseen in regard to the attribution of the plans in the case in which beneficiaries effect hedging operations that make it possible to neutralise any restrictions on the sale of Options attributed.

4.8 Description of the effects determined by a termination of the professional relationship

The effects determined by a termination of the professional relationship with persons identified as Beneficiaries are as follows:

– in the case of retirement during the period of validity of the Plan, Beneficiary retains the right to exercise, in the exercise period, any exercisable Options;

– in the case of the death of a Beneficiary, the conditions outlined above apply to the legal heirs of the Beneficiary.

– in the case of a professional relationship terminated by the voluntary resignation or the rightful dismissal, for grave misconduct or violation of duty, good faith and loyalty undermining the basis underlying the Plan, the Beneficiary loses all rights, with the consequence that all exercisable Options attributed under the terms of the Plan and not yet exercised will be immediately and automatically extinguished, without any right of indemnity or compensation of any kind.

– in the case of a professional relationship terminated for reasons other than those outlined above, the board of directors will determine, as and when appropriate, what line should be taken on exercisable Options.

In cases where the Beneficiary is a director of the Company or of a subsidiary, as per Art. 2359 of the civil code., of Arnoldo Mondadori Editore S.p.A., the following will apply:

(i) in the case where a director voluntarily resigns from the board or the directorship is lawfully revoked, as per Art. 2383 of the civil code., the Beneficiary will lose all rights, with the result that all exercisable Options allocated to the director and not yet exercised will be automatically extinguished without any right of indemnity or compensation of any kind;

(ii) in the case of the end of the mandate for a director, as per Art.. 2382 of the civil cod., the board of directors will determine, as and when appropriate, what line should be taken on exercisable Options;

(iii) in the case where a director’s mandate is terminated for reasons other than those stated above at (i) and (ii) or for expiry of the mandate, the Beneficiary will retain the right to exercise any exercisable Options.

4.9 Indications of other eventual causes of annulment

Further to the provisions regarding the exercise period for Options, in the case of a sale to third parties of the control of a subsidiary of Arnoldo Mondadori Editore, the exercise of Options allocated to Beneficiaries who are employees or directors of the said company must be completed within 30 days of announcement being made to the Beneficiaries of the sale of control. After this period the exercisable Options allocated to such Beneficiaries on the basis of the Plan will be considered automatically extinguished without any right of indemnity or compensation of any kind.

4.10 Motivations concerning the eventual possibility of “redemption”, by the company, of the financial instruments that are the object of the plan, as per Art. 2357 and ff. of the civil code; the beneficiaries of such redemption indicate whether this would apply only to specific categories of employee; the effects of the termination of the professional relationship on such a redemption

Not applicable.

4.11 Eventual loans or other subsidies that may be applied for the purchase of shares, as per Art. 2358, para. 3 of the civil code

Not applicable.

4.12 Indications regarding the evaluation of charges that the company expects to meet on the date of allocation, determinable on the basis of the terms and conditions already outlined, for the total amount and in relation to each instrument in the plan

According to the terms of IFRS 2, stock options are evaluated at fair value at the moment of allocation. Given the regulations governing the Plan, fair value is determined using a binomial model.

Such benefits are booked as personnel costs during the period of service, consistently with the vesting period and starting from the date of allocation and balanced under net assets in the item “Reserve for stock options”.

The benefits recognised directly by the parent company Arnoldo Mondadori Editore S.p.A. to employees/directors of subsidiary companies are book as an increase in cost of the relative stake holding, and balanced under net assets in the item “Reserve for stock options”.

Subsequent to the date of allocation, a change in the number of options will involve an adjustment to the overall cost of the Plan to be booked as indicated above. At the end of each year the fair value of each Option previously determined is neither reviewed or updated, but remains definitively acquired and booked under net assets; on the same date, meanwhile, there is an updating of the estimate of the number of shares that will mature by the expiry date ( and therefore the number of employees that will have the right to exercise the Options). Changes in the estimate may lead to an adjustment in the “Reserve for stock options”” booked to the income statement between personnel costs or a reduction in the item “Equity holdings” if relative to benefits recognised to employees/directors of subsidiary companies.

When Options are exercised the part of the “Reserve for stock options” relative to the options exercised is reclassified under “Share premium reserve”; the part of the “Reserve for stock options” relative to cancelled options, or un-exercised options at the expiry date, is reclassified under “Other reserves”.

The parameters used for the numerical calculation of binomial tree for the 2008 allocations are as follows:

Year of allocation 2008 Exercise price of option 4.565 Life of option (residual years) 6 Current price of underlying shares at the date of allocation in € 3.911 Expected share price volatility 35% Dividend yield 8.9491% Interest rate without risk for the duration of the option 5.15%

4.13 Indication of eventual dilutory effects determined by compensation plans

Not applicable in that the Plan does not involve a capital increase for the Company

4.14 Eventual limits foreseen for the exercise of voting rights and the attribution of rights on assets

No limits are foreseen for the exercise of voting rights and for the attribution of rights on assets referring to shares purchased as a result of the exercise of Options.

4.15 In the case where shares are not traded on regulated markets, all useful information for an overall evaluation of the attributed value

Not applicable.

4.16 Number of financial instruments underlying each option

Each Option attributed gives the right to the acquisition of one Share.

4.17 Expiry of Options

Options expire on the first day subsequent to the term of the exercise period as indicated in the table at 4.2 above. Options that are not exercised by this date are cancelled and consequently no longer carry any rights for Beneficiaries.

4.18 Exercise procedures, timing and conditions

Options may be exercised, in a single operation, exclusively in the exercise period that begins from the expiry of the specific vesting period of 36 months from the date of the allocation of Options, as indicated in the table at 4.2 above.

4.19 Exercise price of options and the procedure and criteria for its determination, in particular concerning:

a) the formula used for the calculation of the exercise price in relation to the fair market value, and

b) the procedure for the determination of the market price used as the reference price for the determination of the exercise price

The exercise price for Options has been determined by the board of directors – as outlined in para. 3.7 above – in line with Art. 9, para. 4, a) of the TUIR, with reference to the “normal value” of the Shares, and corresponds to the arithmetical average of the reference price for Mondadori shares in the period from the date of assignment of the options to the same day of the previous calendar month.

The exercise price for Options is indicated in the table at 4.2 above.

4.20 In the case of the exercise price not being equal to the reference price determined as indicated at 4.19.b above (the fair market value), what are the reasons for the difference

Not applicable.

4.21 Criteria for which different exercise price would apply to the various individuals and categories of Beneficiary

Not applicable.

4.22 In the case in which the financial instruments underlying the options are not trade don regulated markets, an indication of the attributed value of the underlying instruments or the criteria for determining such value

Not applicable.

4.23 Criteria for adjustments made necessary as a result of extraordinary capital operations and other operations involving changes in the number of underlying instruments (capital increases, extraordinary dividends, reverse splits or splits in underlying shares, mergers and disposals, conversion operations in other categories of shares etc.)

In the case of the following extraordinary operations, the board of directors, with a view to maintaining unaltered the economic aspect of the allocated Options, will proceed, when conditions allow, to adjusting the exercise price and/or the number of Shares in relation to the Options not yet exercised:

(a) operations for reverse splits or splits;

(b) operations for free capital increases;

(c) operations for paid capital increases with the issue of shares, of shares linked to warrants, convertible bonds or bonds convertible with warrants;

(d) mergers or disposals;

(e) operations for capital reductions.

In the case of any of the above, and always assuming appropriate conditions, the board of directors will proceed with the adjustment of the acquisition price according to widely accepted rules practiced by financial markets, making use of standard adjustments and nominating an independent expert to make a judgement on the correctness of the method used for the adjustment to the price and the result obtained. Such adjustment, as well as the judgement of the independent expert, will be communicated in writing to the Beneficiaries.

Segrate, 19/6/2008

The Board of Directors of Arnoldo Mondadori S.p.A. met today, under the Chairmanship of Marina Berlusconi, to examine and approve the management report for the first three months of the year to 31st March 2008 as presented by the Group’s Deputy Chairman and Chief Executive, Maurizio Costa.

The scenario

The first months of 2008 confirmed fears about a general slowdown in the broader economy and there were no signals of a reversal of the trend in the Mondadori Group’s reference market. In fact, Italy saw a continuation of the decline in magazine circulation, which was counterbalanced in January and February by a recovery in advertising. The add-on sales market saw a further marked slump (-26%) after the slowdown of 2007. The trade books market, meanwhile, remained essentially stable.

In France, in the same period, there was a slight fall in circulation, while there was a continued decline in the advertising market, which is compared to Q1 2007, in which the impact of regulatory changes, which made it possible for large-scale retailers to advertise on television, had not been fully felt.

Group performance in the period to 31 March 2008

During the first quarter of the year the general holding up of all the businesses – due also to a focused cost control policy – and, in particular, the excellent performance of Radio R101 more than compensated for the higher investments for the development of the international and digital activities, and despite the negative impact of the add-on sales business.

The lower contribution to margins by add-on sales (a total shortfall of €10.1 million compared with 2007) was essentially due to:

– for Magazines Italy, a comparison with Q1 2007 in which add-ons had obtained 40% of their results for the full year;

– for Magazines France, the negative impact of the launch of new initiatives in the first months of the year;

– for the Book and Printing Divisions, from the market slowdown.

In the first quarter of 2008 consolidated revenues came to €460,3 million, a fall of 1.7% on the €468.1 million of the first quarter of 2007.

Consolidated gross operating profit came to €48.4 million, compared with €54.5 million in the same period of the previous year, a fall of 11.2%. As a proportion of revenues, the figure is 10.5%, compared with 11.6% in Q1 2007.

The difference in the operating margin, net of the aforementioned effect of the performance of add-on sales, would show an improvement of €4 million, essentially due to improved results by the businesses.

Consolidated operating profit came to €38.2 million, a fall of 12.8% on the €43.8 million of Q1 2007, after amortization and depreciation of tangible and intangible assets for a total of €10.2 million (€10.7 million in 2007); 8.3% as a proportion of revenues, compared with 9.4% in Q1 2007

Consolidated profit before taxation in the period came to €27.9 million, a fall of 25.8% on the €37.6 million of the same period of the previous year, with an increase of net financial charges (€4.1 million) largely due to the effects of changing conditions in financial markets (the impact of increased interest rates for around €1.9 million and a fall in returns from financial assets for around €1.7 million).

Consolidated net profit amounted to €17.7 million, a fall of 25% on the €23.6 million of the first quarter of 2007.

Gross cash flow in the first quarter of 2008 amounted to €27.9 million compared with €34,3 million in Q1 2007.

The Group’s net financial position on 31 March 2008 showed a deficit of -€567.1 million compared with -€535.3 million at the end of 2007.

Business Area Results
• Books

In the first quarter of 2008 the Book Division generated revenues of €94.1 million (-2.5% on the €96.5 million of the same period of the previous year).

The Mondadori Group confirmed its leadership in the trade book segment, consolidating its value market share (29.7%[1]); in the large-scale retail area the figure is estimated at more than 35%.

Among the Group’s publishing houses, the performance of Edizioni Mondadori was particularly noteworthy, with revenues of €39.3 million (+1.8% on the €38.6 million of Q1 2007), as was that of Piemme, which had revenues of €14.6 million (+15% on the €12.7 million of Q1 2007).

• Magazines

First quarter 2008 consolidated revenues generated by the Magazine Division amounted to €260.2 million (-2.3% on the €266.4 million of the same period of the previous year).

Italy

Revenues generated in Italy amounted to €162.3 million (-4.7% on the €170.2 million of Q1 2007).

This result was due to the following phenomena:

– a fall in circulation revenues, the result of a negative trend in the market that has affected almost all of the segments in which the Division operates;

– a decline in the revenues from add-on sales in a rapidly declining market, in which Mondadori, nevertheless, was less affected than its competitors;

– an increase in advertising revenues, thanks also to a new organisational structure at Mondadori Pubblicità and targeted commercial policies that have led to results above the market average and to the growth in radio.

Facts of relevance affecting the Division in the period included:

– the re-launch of Panorama, in the first half of March, with results that have so far proved encouraging;

– the redesign and review of Donna Moderna;

– the development of internet activities and the re-design of a number of sites;

– the continuation of a management policy focused on efficiency gains in all areas, in particular on the industrial side (foliations and technical costs associated with product characteristics), editorial (editorial costs and staffing) and commercial (returns).

In a market in which, as already indicated, there is a continuing decline in sales, heavily influenced by the lower performance of add-ons, Mondadori saw a fall in circulation of 4.7%, also due to the exit from the portfolio of three titles: Star+TV, Per Me and Creare (on a like-for-like basis, the shortfall would be 2.9%).

Regarding add-on sales, there was a sharp fall in the market in the first quarter (-26%): and in the context of this overall decline, Mondadori’s performance was better (-12.9%) also when compared to the major newspapers that operate in the segment

France

The activities of the Magazine Division in France generated first quarter 2008 consolidated revenues of €97.9 million (+1.8% on the €96.2 million of the same period of the previous year).

In general, the good performance in terms of circulation and constant cost controls, alongside the ongoing restructuring plan, made it possible to maintain the level of profitability, net of investments for development and the launch of add-on sales new initiatives.

On the circulation side, the Group’s titles confirmed the positive results of 2007, with an increase of 1.8% compared with Q1 2007.

The redesign and re-launch of a number of titles have been well received by readers and resulted in a positive impact on sales; a positive performance in newsstand sales and subscriptions, with excellent results for Closer and Auto Plus.

Mondadori France saw a fall in advertising sales of 7.5% compared with the same period of the previous year: as already mentioned, the year is feeling the effects of an unfavourable moment in the French advertising market, which continues to decline, and in which, nevertheless, the up-market segment is bucking the trend (+5.6%).

In April, as already communicated, an agreement for exclusive negotiations was reached with Motor Presse France for the sale of a package of six titles specialised in the Sports sector. This operation is part of the often announced strategy of rationalising the portfolio: the focus and development – also through the sale of niche titles – on market areas, such as the up-scale and mass market segments, with higher potential, also in terms of advertising sales.

International activities

Of note during the period was the important launch of two up-market brands: Casaviva in Greece (February) and Flair in Austria (March), followed by the announcement of the publication from April 2008 of Grazia in India.

The positive performance of Attica in Greece and the Balkans continued, as did that of the joint-venture with Sanoma in Russia.

• Advertising

Mondadori Pubblicità ended the first quarter of 2008 with sales of €78.9 million (+6.5% on the €74.1 million of the previous year), outperforming the market average in a number of areas thanks to a new organisational model and targeted commercial policies aimed at making the most effective use of the rich portfolio available.

For Mondadori Magazines, advertising sales were up by 7.7%, thanks to a positive performance of Grazia and Chi; as well as Panorama and TV Sorrisi e Canzoni; noteworthy among the monthlies, was Flair and the up-scale specialised titles in the Design and Furinishing segment.

The performance should also be underlined in the period of Radio R101, which grew by 55% compared with Q1 2007 and the performance, higher than the market average, of Mondadori’s online activities (+41%).

• Printing

In the first quarter of 2008 the Printing Division generated total revenues of €102.7 million (-9.3% on the €113.2 million of the same period of the previous year).

This fall in sales is almost entirely due to the decline of the add-on sales market that has affected both newspapers and magazines.

There were significant increases in raw materials and energy costs, but, for the moment, these remain in line with forecasts.

Despite this fall in business, profitability has been maintained, thanks to continued production cost controls and structural adjustments, there was a satisfactory use of capacity, following a significant reduction in outsourcing and also in relation to making full use of recent investments that are now fully operative.

• Direct marketing

In the first quarter of the year Cemit Interactive Media generated revenues of €5.3 million (-11.7% on the €6 million of Q1 2007): during April, however, this shortfall was recovered.

Consequently Cemit, having implemented structural changes to adapt to a changing market scenario, is now facing the challenge of development and integration of various data bases ( the company’s principal assets) by keeping abreast of continuing technological developments and reviewing the strategic approach to the market of reference.

• Retail

The overall revenues of the Retail Division in the first quarter of 2008 amounted to €43.3 million (+13.1% on the €38.3 million of Q1 2007).

Mondadori Franchising saw a significant increase in revenues in the period, with sales of €14.3 million (+22% on the €11.7 million of Q1 2007), thanks mainly to new affiliations over the twelve-month period of reference: the number of bookstores rose from 187 to 208, and the Edicolè outlets from 86 in the first quarter of last year to 149 on 31 March 2008.

Mondadori Retail generated sales in the first three months of the year of €29 million (+9.3% on the €26.5 million in Q1), thanks also to an important development plan that was launched in 2007.

• Radio

In the first three months of 2008 gross advertising revenues of Radio R101 amounted to €5.1 million (+55% on the €3,3 million of Q1 2007), which translates into net revenues of €3.6 million.

The activities of Radio R101 during the period have been focused on continuing to improve the product and ongoing communication efforts both for the brand and the new programmes. In particular, in the first three months of the year a “local” communication campaign was conducted (using print media, outdoor and events) with the aim of reinforcing awareness in areas with the best growth opportunities.

On the frequencies side, signal distribution is now widespread across the country, thanks to the numerous acquisitions made in recent years.

www.r101.it recently generated record traffic of more than 250,000 visitors and around 3 million page views per month.

Expectations for the current year

The current economic climate has had a worse than expected impact on consumer spending in the first three months of the year and there appears to be no let up in the rise in the cost of energy and raw materials or of essential consumer goods.

The situation in the sectors of reference for the Mondadori Group remains similar to that seen in recent quarters, with a general trend fro slight falls in the circulation of magazines, and a more marked fall in add-ons. Advertising recovered to February, but slowed in March and the book market remains essentially stable.

In this context, the considerations made at the presentation of the Group’s 2007 results remain operative: a close focus on the management of the core business and recent investments (Radio), effective control of operating costs, combined with the development of activities focused on the product (Magazines and Digital) and the market (international network).

Despite the unfavourable economic situation, unless there is a further significant downturn in the area in which the company operates, it is possible to forecast a level of operating profit for the current year, net of extraordinary elements and investments in development, in line with that of the previous year

§

The executive responsible for the preparation of the company’s accounts, Carlo Maria Vismara, declares that, as per art. 2, 154 bis of the Single Finance Text, the accounting information contained in this release corresponds to that contained in the company’s formal accounts.

Arnoldo Mondadori Editore S.p.A. today announced that an agreement has been reached for exclusive negotiations with Motor Presse France for the sale of a package of six specialised titles currently published by the Mondadori France group: Le Cycle; l’Officiel du Cycle de la Moto et du Quad; Bateaux; Golf Européen, Golf Magazine and Guide Bel-air.

The magazines involved in the negotiation, specialised in the sport sector, in 2007 recorded overall revenues of around €11 million.

The operation is part of the widely publicised strategy of rationalising the portfolio of Mondadori France through focalisation and development, also through the sale of niche titles, of upscale and mass-market segments with higher potential, also in terms of advertising.

Motor Presse France publishes around fifteen specialised magazines in France, dedicated to the worlds of cars, motorcycles, tourism, sport and leisure, as well as a series of travel guides. The company is part of the Motor Presse group, which is owned by Gruner+Jahr (Bertelsmann Group) and operates in fifteen countries and publishes more than 200 magazines.

The activation of the negotiation agreement is subject to the consultation procedures with trades union organizations foreseen by French legislation.

The Annual General Meeting of the Shareholders of Arnoldo Mondadori Editore S.p.A., which met today under the Chairmanship of Marina Berlusconi, approved the company’s consolidated results and management report for the year ended 31 December 2007 and deliberated the distribution of a dividend of €0.35 – gross of withholding taxes – per each ordinary share in circulation on the date of coupon detachment.

The dividend payable is in line with that distributed in 2007 drawn from the net profit for the year 2006. The dividend will be payable from 22 May 2008 (coupon detachment date: 19 May 2008).

In his report, the Deputy Chairman and Chief Executive Maurizio Costa outlined the highlights of the Group’s performance already announced on 20 March.

Outside of the meeting, Maurizio Costa also anticipated that advertising sales in the first quarter of 2008 had recorded an overall increase of around 5% on the same period of the previous year.

The Shareholders also passed resolution on the renewal of authorisation for the acquisition and utilisation of company shares.

Following the expiry of the term fixed for the authorisation issued on 23 April 2007, the Shareholders renewed authorisation to effect share buy-backs, up to the legal limit of 10% of the share capital. The Shareholders also authorised, as per Art. 2357 of the Civil Code., the use of shares involved in such buy back operations or already in the company’s portfolio.

On the basis of the authorisation that has now expired, the company bought on the market 2,729,896 ordinary shares (1.05% of the share capital) for a total outlay of €18,454,809; moreover, exclusively in the context of the company’s Stock Option Plan, 15,000 shares were sold in the same period.

By taking account of the shares previously in the portfolio, the total number of shares comprising treasury stock is now 20,097,587 (7,746% of the share capital), of which. 15,580,101 are held directly in the Arnoldo Mondadori Editore S.p.A. portfolio and 4,517,486 are held by the subsidiary Mondadori International S.A.

In line with the provisions of Art. 144 bis of Consob regulation 11971/1999, what follows is an outline of the buy-back programme authorised by the Shareholders:

1. Underlying motivation

The underlying reason for the request for authorisation to effect buy backs and make use of Company shares is that it will allow the Board of Directors to:

– use company shares for the exercise of options for the purchase of shares assigned to participants in the stock option plans put in place by the Shareholders;

– use company shares, either bought or in the portfolio, for the exercise of rights, also conversion rights, deriving from financial instruments issued by the company, its subsidiaries or third parties;

– use company shares, either bought or in the portfolio, as part or whole payment in any eventual acquisitions or equity investments that fall within the company’s stated investment policy;

– take advantage, where and when considered strategic for the company, of investment opportunities, also in relation to available liquidity.

2. Cap on the number of shares that may be bought

Given that 10% of the share capital corresponds to 25,942,983 shares and that the company currently holds, as indicated above, a total of 20,097,587 shares, or 7.746% of the share capital, the new authorisation would give the Board the faculty to buy back a further 5,845,396 ordinary shares, corresponding to 2.253% of the share capital.

3. Method of acquisition and the price range

Buy backs would be effected on regulated markets as per art. 132 of the legislative decree of 24 February 1998 n. 58 and art. 144 bis, para. 1, B of Consob regulation 11971/99 according to operating procedures established by the regulations for the organisation and management of the markets themselves, which, does not permit the direct combination of offers to buy with predetermined offers to sell.

Consequently, the corresponding minimum and maximum price of sale will be determined at the same conditions that applied to previous authorisations agreed by the Shareholders, i.e. at a unit price not less than the official market price on the day prior to any operation, less 20%, and not more than the official market price on the day prior to any operation, plus 10%.

In terms of price and daily volumes, acquisition operations will in any case be conducted in line with the norms foreseen by the EU regulation 2273/2005, in particular:

– the company will not buy shares at a price greater that the highest price of the last independent operation and the price of the highest current independent offer on the regulated market where the acquisition is made.

– in terms of daily volumes, the company will not purchase a quantity greater than 25% of the average daily volume of Mondadori shares traded on the regulated market and calculated on the basis of the avergae daily volume of trading of Mondadori shares in the 20 trading days prior to the dates of purchase.

Any operations that are effected will be communicated to the market as per the terms of Art. 87 bis, of Consob regulation 11971/1999.

4. Duration

This authorisation will remain valid until the approval of the Annual Report for the year to 31 December 2008, and in any case for a period of not more than 18 months from the date of the Shareholders’ approval.

Arnoldo Mondadori Editore S.p.A. today announced that its annual Corporate Governance Report is now available for public inspection at the company’s headquarters and at the Borsa Italiana S.p.A.

The document is also available on the “Corporate Governance” section of the web site www.gruppomondadori.it.

The Board of Directors of Arnoldo Mondadori S.p.A. met today, under the Chairmanship of Marina Berlusconi, to examine and approve the consolidated balance sheet and management report for the year to 31st December 2007 as presented by the Group’s Deputy Chairman and Chief Executive, Maurizio Costa.

During 2007 Mondadori consolidated its leadership position in Italy in an essentially stable market for books and a magazine market in which a downward trend continued, especially for add-on sales.

Organisational changes and improvements in efficiency across the group, combined with the integration of Mondadori France, nevertheless made it possible to record results for the overall performance and that of activities in France that were better than expected, in a market that, especially in terms of advertising investments, is going through a difficult phase.

Consolidated revenues for 2007 came to €1,958.6 million, an increase of 11.9% on the €1,750.2 million of 2006 (+16.8% with a like-for-like inclusion of the distribution business)[1].

Consolidated gross operating profit amounted to €268.9 million, compared with €240.3 million in the previous year, an increase of 11.9%, and 13.7% as a proportion of revenues, a figure in line with that of 2006.

Net of non-recurring and extraordinary items, thanks to the performance of the various divisions, there was a 16.7% increase in the group’s operating margin, despite increased investments in business development of €8.8 million.

Consolidated operating profit came to €225.2 million, an increase of 11.8% on the €201.4 million of 2006, after increased amortizations of around €4.8 million resulting from the acquisitions in France and of Messaggerie Musicali. As a proportion of revenues, the figure of 11.5% was in line with the previous year.

Consolidated profit before taxation amounted to €189.5 million, a slight rise (+0.3%) on the €189 million of 2006. This result felt the impact of higher financial charges of €23.3 million, around €13.7 million due to the higher average indebtedness during the year and the rest from increases in interest rates resulting from the general economic climate.

Consolidated net profit came to €112.6 million, an increase of 3.3% on the €109 million of 2006. There was a benefit in 2007 from lower tax charges, despite a higher level of non-taxable income in 2006 and the difference in the results of holdings consolidated on an equity basis.

This is essentially the result of the net effect of the use of deferred tax liabilities and the replacement tax applied, in line with the provisions of the last government budget regarding the taxation of certain corporate assets. There was an insignificant improvement (+€0,4 million) form the application of new IRES and IRAP rates to both deferred and advance taxes.

Gross cash flow for came to €156.3 million, compared with €147.9 million in 2006.

The overall net financial position showed a deficit of €535.3 million on 31.12.2007, compared with a deficit of €554.7 million on 1 January 2007, an improvement of €19.4 million despite net investments of €58.9 million, share buy-backs for €10.3 million, dividend payments of €84.7 million and taxes of €86 million.

THE BUSINESS AREAS

· Books

In 2007 the total revenues of the Mondadori Group’s Book Division came to €445 million, an increase of 1.3% on the €439.5 million of the previous year.

The gross operating margin, as a proportion of turnover, was 19.7%.

The Division saw a marked confirmation in 2007 of its leadership in the book market, overtaking the already excellent result of the previous year, with a value market share of 29% just in the mid-to- large bookstores; in the large-scale retail sector, the market share of the Mondadori Group’s publishing houses is estimated at more than 35%[2].

There were no significant changes during the year to the overall structure of the Division and the balance between its various sectors. The trade books sector (fiction and non-fiction, for adults and children) and accounts for 61.5% of revenues; educational publishing, which is managed by Mondadori Education (a new name adopted on 1 January 2008) accounts for 20%; while books in the Art, Architecture, along with cultural heritage activities, make up 11.7% of revenues.

During 2007 the Book Division published 2,742 new titles (2,787 in 2006) and 5,242 reprints (4,937 in 2006), a total production of 54.6 million books, compared with 56.4 in 2006.

Among the Group’s various publishing houses, the performance of Einaudi and Piemme has been particularly good.

In 2007 Giulio Einaudi Editore saw a 4.4% increase in revenues, to €49.9 million, compared with €47.8 million the previous year. This improvement was due to excellent bookstore sales as well as add-on sales operations.

Piemme generated revenues in the period of €55.7 million, an 18% increase on the €47.2 million of the previous year. This growth was mainly in the fiction area which saw an increase of around 90%, thanks to the exceptional sales of new titles published in May by Khaled Hosseini, Mille splendidi soli (which sold more than 1 million copies during the year) and Il Cacciatore di aquiloni (more than 800,000 copies in the year), both of which were at the top of the best sellers lists for 2007.

Edizioni Mondadori generated 2007 revenues of €137.6 million, essentially in line with the €137.9 million of 2006 (-0.2%); a result which remains very positive if the further reduction in the Dan Brown effect and the fall in the sale of rights for add-on sales initiatives are taken into consideration.

2007 was a particularly difficult year for Sperling & Kupfer with a 13.7% fall in revenues to €25.3 million, from the €29.3 million of 2006.

The revenues of Mondadori Electa in 2007 came to €51.1 million, a fall of 5.2% on the €53.9 million of the previous year. This was due to the sharp fall (around 40%) in add-on sales, which was partly compensated by stability in the cultural heritage and books area. In particular, book sales increased by 11.4% compared with the previous year, with an improved performance across all lines.

The net 2007 revenues of Edumond Le Monnier (as mentioned earlier, since 1 January 2008 Mondadori Education S.p.A.), came to €87.1 million (-0.7%), compared with €87.7 million in the previous year.

The company maintained its leadership in the educational market with a share of 13.9% and an analysis of the various segments shows that Mondadori Education remains the leader, among the big publishers, in the primary and middle schools sector, and is in the number two position in the high school sector.

On the distribution and logistics front, the Division’s revenues for the period amounted to €33.7 million, in line with the previous year.

The distribution of Piemme products, for the whole of 2007 (compared with just five months in 2006), had a marked impact and, over the year, saw an increase of almost 50% in the number of dispatches, while managing to keep the average days of delivery (2.1), essentially unchanged alongside further improvements in efficiency.

· Magazines

The Group’s Magazine Division generated consolidated revenues in 2007 of €1,047.7 million, an increase of 20.8% on the €867.2 million of 2006.

In a difficult market scenario, Mondadori was able to improve its levels of profitability compared with the previous year, thanks to ongoing efforts to contain costs and returns. Gross operating profit as a proportion of revenues was 14.8%.

The year was also affected by the inclusion of Mondadori France (twelve months in 2007 compared with only four in 2006) and by the contribution of distribution activities, in Italy, to Press-Di Distribuzione Stampa Multimedia S.r.l.: a reclassification on a like-for-like basis of the distribution business and net of the impact of Mondadori France, revenues for the period would be essentially in line with the previous year.

Italy

The revenues of the Magazine Division Italy came to €657.8 million, in line with the €657.9 million of the previous year, net of the effect of the abovementioned Press-Di.

The performance during the year was characterised by the following:

– a fall in circulation revenues (-3.7%) where there was a drop in the number of copies sold, also as a consequence of a number of titles being closed down;

– an excellent performance in add-on sales, in a market in marked decline (-19.4% in terms of volume), with revenues which increased by 3.4% compared with the previous year;

– a fall (-1,7%) in advertising revenues which were penalised by a reduction in the amount of space sold, and only partially compensated by rate rises;

– the launch of two titles with high advertising potential, First, a monthly supplement to Panorama, and Grazia Casa which completes Mondadori’s offer in the interiors segment;

– the closured of the monthly Per Me and the sale of the weekly Star+TV, penalised by both overcrowding in their respective segments and poor advertising sales;

– the development of internet activities which affected a number of titles. In this context, online advertising sales saw an above market average increase of 54%;

– strong operation cost controls, especially in the technical, commercial and editorial areas, which led to a marked recovery in efficiency.

On the circulation side, Mondadori’s performance was slightly better than the market, which overall saw a fall in terms of copies of around 4.7%, confirming the company’s absolute leadership in the sector (38%).

In women’s titles Donna Moderna confirmed its strength by maintaining circulation revenues. In the male lifestyle and newsmagazine area, Panorama saw a fall in circulation of around 3%, while confirming its consolidated leadership in the segment. First, meanwhile, made a significant contribution to the weekly title’s advertising revenues; positive results were also recorded by Panorama Travel, Economy and PC Professionale.

In the TV-entertainment and family segments (which saw a fall of 6% in copies) Mondadori titles had the best performance in the reference market. TV Sorrisi e Canzoni continues to sell around twice as many copies as its direct competitor and continues to generate revenues with add-on sales initiatives.

Chi maintained its circulation revenues while recording a significant increase in advertising sales.

The up market segment maintained its 2006 level, thanks to a stable performance by Grazia and growth in the design-architecture and cooking segments, which compensated for a downturn in interiors.

In terms of add-on sales, there was acceleration in the downturn in the market as a whole (-19.4%) even though the phenomenon continued to make a significant contribution to the revenues of publishing companies.

In such a difficult context, which has also affected newspapers, Mondadori was able to buck the trend with revenues that increased by 3.4% on 2006, confirming the company’s leadership with a market share of 36%.

In the distribution of editorial and multimedia products, in its first year of business Press-Di generated results that were widely ahead of expectations, thanks to the fine-tuning of the organisational structure and operations, increased efficiencies generated during the year and the expansion of services to new third-party clients.

On the digital side, the excellent performance of the Donna Moderna, Panorama, MyTech e Cosmopolitan sites made it possible to increase advertising revenues by 54%, in a market that grew by 42.7%.

France

Mondadori France ended its first full year as part of the Mondadori Group with consolidated revenues of €389.9 million.

During the year a number of actions were taken aimed at:

– carrying out a complete review of all titles, starting with the most important, and consolidating leadership positions;

– encouraging greater integration with the Italian parent company;

– redefining the area for online activities and testing the market for add-on sales;

– redefining the organisational model and cost structure.

In terms of circulation Mondadori France recorded positive results: in particular, the weekly Closer (+28% on the previous year) improved its position at the top of its segment; Auto Plus continued the positive trend with an increase of 11%; in a difficult, Télé Star performed well, thanks to the successful launch of the first add-on sales operation in the French magazine market.

The advertising market in France saw an overall slowdown in investments (-3.6%, source: Secodip) with a fall in space sold compared with the previous year, due to the election held in the first half and new opportunities for retailers to advertise on television, something that was previously not permitted by law.

In this context Mondadori France generated advertising revenues of €115 million, closing the year in line with the performance of the market, after having recovered during the summer the shortfall of the first half of the year.

International activities

On the international side the development of the “Grazia International Network” continued with the launch of Grazia in Russia and Holland: the revenues of the network grew by 35%, including not only licensing fees, but also the contribution of advertising sales in Italy for the foreign editions and syndication activities.

2007 also confirmed the prospects for other Mondadori brands in addition to Grazia:, Sale&Pepe in Serbia and Interni in Russia, as well as Casaviva, the first international edition of which was launched in Thailand in 2006.

Mondadori also formalised an agreement with SEEC Media Group Ltd. to create a joint venture in China for the launch of Grazia in 2008. During the current year the Mondadori title will also be published in Australia, following a licensing agreement reached with the Australian publisher ACP Magazines.

There was an excellent performance by Attica, thanks to a positive trend in circulation for TV guides and the exceptional performance of add-on sales of DVDs. During 2007 the expansion of the Greek company’s activities continued in the Balkans, the effects of which will be seen in this year.

· Advertising

Mondadori Pubblicità closed 2007 with revenues of €349.5 million, and increase of 1.9% on the €342.9 million of the previous year, thanks to a marked upturn in the fourth quarter compared to the same period of the previous year.

There were no significant changes to the portfolio during the period, excluding the addition of Famiglia Cristiana and the exit of the Disney titles.

Advertising sales during the period were characterised by a positive performance in the fashion sector, with a positive impact on women’s and family titles: of these Grazia (+3.5%) and Chi (+7.4%). The situation was more stable among titles for men, in which the strengths of the tried and tested Panorama “system” were confirmed, strengthened further by First and Travel; the up scale design and architecture segment also performed well (in particular Interni and Casabella), while for the magazines managed in joint-ventures, of particular note was the positive performance (+8%) of Focus (Gruner+Jahr/Mondadori).

Sales for R101, sustained by the marked increase in listeners, were up by 24.8%, decidedly ahead of the market (+8%).

· Printing

The 2007 revenues of the Printing Division came to €439,9 million, compared with €447.9 million in the previous year, a fall of 1.8%,.

Captive revenues totalled €279.2 million, and increase of 7.7%, while third-party revenues (€160.7 million) saw a fall of 14.8%, above all as a result of the decline in the add-on sale of editorial products with magazines and newspapers.

The foreign market for rotary printed commercial products was stable in terms of volume and in this context there was a positive consolidation of the company’s position with its main clients despite the European competitive scenario being affected by increased competition and price tensions.

The market for monochrome books, both hardcover and paperbacks. Linked to add-on sales initiatives by magazines and newspapers saw a marked fall compared to previous years. Meanwhile the performance of trade books was very positive, the foreign illustrated book market was stable, even though increased competition from the Far East continues to increase the pressure on prices.

Since 2007, four monthlies published by Mondadori France have been printed by Mondadori Printing; and further synergies have been developed for the supply of paper.

During the year there was a marked increase in energy costs due to the trend in oil prices, which increased by 5.7 % on 2006.

There was a slight increase in the cost of paper, continuing a trend that had been noted the previous year.

• Direct marketing

In 2007 the Direct Marketing sector, through the activities of Cemit Interactive Media S.p.A., recorded revenues of €23.9 million, in line (-0.4%) with the €24 million of the previous year.

After the fall off of business in the communication area due to the introduction of new privacy legislation in 2005, the company has brilliantly conducted a reorganisation of its structure and processes, refocusing its business on customer loyalty, an area in which Cemit continues to be the only operator able to offer a complete range of services.

• Retail

The total revenues of the Retail Division in 2007 came to €183.2 million, an increase of 33.4% on the €137.3 million of 2006.

Mondadori Retail generated revenues in the period of €124.7 million, an increase of 38.6% on the previous year, thanks to the opening of three bookstores in shopping malls in Lonato (BS), Rome and Nola (NA), the new Multicenter in Piazza Duomo in Milan and the contribution made by the incorporation of the two Mondadori Shop S.p.A. stores (formerly Messaggerie Musicali S.p.A.).

On a like-for-like basis, excluding for 2007 the revenues of Mondadori Shop S.p.A. and in 2006 the sales of big clients, the increase would be 10.6%.

Having brilliantly refocused the book offer, the performance of Messaggerie Musicali was particulalry positive, generating revenues of €35.5 million.

Mondadori Franchising saw significant growth in 2007, recording an increase in revenues of 23.7% to €58.5 million: the number of outlets rose form 266 in 2006 to 349 (of which 141 with the new Edicolè formula).

• Radio

The Radio Division’s revenues for 2007 came to €11.3 million, an increase of 21.5% on the €9.3 million of 2006.

During the year Radio R101 saw a further improvement in the quality of the product, enriching the schedule with new programmes and new presenters. At the same time brand-building and content communication efforts continued along with the significant implementation of the signal distribution for national coverage continued, thanks to frequency acquisitions made during the year (in particular in the Lazio, Campania, Emilia Romagna, Veneto and Puglia regions) increasing the level of coverage to 90%.

Audiradio figures for 2007 show a progressive increase in the number of listeners to R101 to an average daily level of more than 2 million. Compared with 2006, R101 recorded the best performance in the public and private radio market, with an increase of more than 40% in the daily average. Over the 7 days, listening figures, at more than 8.4 million, put the station among Italy’s top six commercial stations, after just two years.

RESULTS OF THE PARENT COMPANY ARNOLDO MONDADORI EDITORE S.P.A.

The Annual Report of the parent company, Arnoldo Mondadori Editore SpA, for the year to 31 December 2007, shows a net profit of €90 million, in line with the €90.2 million of the previous year.

DIVIDEND PROPOSAL

The Board of Directors agreed to propose to the Annual General Meeting of the Shareholders, called for 22 April 2008 (or 23 April on second calling), a gross dividend, before tax, of €0.35 for each ordinary share in circulation on the date of coupon detachment.

In line with the terms outlined by the regulations for markets organised and managed by Borsa Italiana S.p.A., dividends will be payable from 22 May 2007 (coupon detachment: 19 May 2008).

FORECAST FOR THE FULL YEAR

Economic forecasts for 2008 continue to evolve, with negative indicators for production, consumer spending and the industrial costs.

The situation is complicated by the ongoing liquidity crisis making it both expensive and difficult to finance development while encouraging the recourse to low risk investment. In addition, differing monetary policies in Europe and the United States have led to acceleration in the strength of the euro, with inevitable consequences for companies involved in international trade.

In this context, in which the Italian economy would appear to be among the most exposed and fragile, the Mondadori Group will pay particular attention to managing its core business, which is less susceptible to such factors, and the international activities that reduce the dependence on the domestic market. During the year the development will continue of the international network, digital activities and the product portfolio in France.

The current situation makes it especially difficult to make forecasts for companies’ 2008 results, however Mondadori’s track record in recent years makes it possible to hypothesise operating results for the current year, net of development costs and extraordinary items, in line with the positive results of 2007.

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As per article IA.2.9.3 n.4 of Italian Market Regulations document, bonded loans expiring over the 18 months from 31 December 2007 are hereby indicated:

– date of issue: 20/10/2003;

– amount: €109,900,000, corresponding to 1,099 bonds of €100,000 each, convertible in ordinary shares of Arnoldo Mondadori Editore S.p.A.;

– issued by: Mondadori International S.A., a wholly-owned subsidiary of da Arnoldo Mondadori Editore S.p.A.;

– guarantor: Arnoldo Mondadori Editore S.p.A.;

– date of expiry: 20/10/2008.

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The executive responsible for the preparation of the company’s accounts, Carlo Maria Vismara, declares that, as per art. 2, 154 bis of the Single Finance Text, the accounting information contained in this release corresponds to that contained in the company’s formal accounts.

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The results of 2007 will be outlined by the deputy chairman and chief executive, Maurizio Costa, and the CFO, Carlo Maria Vismara, at a meeting with the financial community to be held today at 3.00 pm at the company’s headquarters in Segrate.

[1] From 1 January 2007, following the contribution of the distribution activities for Italian magazines to Press-Di Distribuzione Stampa Multimedia S.r.l. (a wholly-owned subsidiary of Arnoldo Mondadori Editore S.p.A.) the method of accounting has changed from that of costs and revenues to a premium method.

A reclassification of such distribution activities, using the same method for 2006, shows that the increase in consolidated revenues would have been 16.8%. Excluding the effect of Mondadori France (included for the whole of 2007, compared with only four months in 2006 the volume of business would show an increase of 1.8%.

[2] Since January 2007 the measurement of sales for trade books (fiction and non-fiction) has been conducted by Nielsen Bookscan. Due to the different methodology adopted by this company and that used by Demoskopea, starting with the sample, the figures for 2007 cannot be compared with those of the previous year.

The Board of Directors of Arnoldo Mondadori Editore S.p.A. will ask the forthcoming Annual General Meeting of the Shareholders to renew – until the approval of the Annual Report for 2008 – authorisation to effect share buy-backs up to the legal limit of 10% of the share capital, authorisation already granted by the AGM of 23 April 2007 and due to empire with the approval of the Annual Report 2007.

The Shareholders, that will be held on Tuesday 22 April 2008 on first calling or Wednesday 23 April 2008 on second calling, will also be asked to authorise, as per Art. 2357 of the Civil Code, the use of shares involved in such buy back operations or already in the company’s portfolio.

The highlights of the board of directors’ proposal are as follows:

• Underlying motivation

The underlying reason for the request for authorisation to effect buy backs and make use of Company shares is that it will allow the Board of Directors to:

use company shares for the exercise of options for the purchase of shares assigned to participants in the stock option plans put in place by the Shareholders;

– use company shares, either bought or in the portfolio, for the exercise of rights, also conversion rights, deriving from financial instruments issued by the company, its subsidiaries or third parties;

– use company shares, either bought or in the portfolio, as part or whole payment in any eventual acquisitions or equity investments that fall within the company’s stated investment policy;

– take advantage, where and when considered strategic for the company, of investment opportunities, also in relation to available liquidity.

• Cap on the number of shares that may be bought

The authorisation request relates to the legal limit of 10% of the company’s share capital, or 25,942,983 shares.

Given that the company currently holds 15,580,101 of its own shares and that a further 4,517,486 Mondadori shares are held by the subsidiary Mondadori International SA – making an overall total of 20,097,587 shares, corresponding to 7.747% of the share capital – the new authorisation would give the Board the faculty to buy back a further 5,845,396 ordinary shares, corresponding to 2.253% of the share capital.

• Method of acquisition and the price range

Buy backs would be effected on regulated markets as per art. 132 of the legislative decree of 24 February 1998 n. 58 and art. 144 bis, para. 1, B of Consob regulation 11971/99 according to operating procedures established by the regulations for the organisation and management of the markets themselves, which, does not permit the direct combination of offers to buy with predetermined offers to sell.

Consequently, the corresponding minimum and maximum price of sale will be determined at the same conditions that applied to previous authorisations agreed by the Shareholders, i.e. at a unit price not less than the official market price on the day prior to any operation, less 20%, and not more than the official market price on the day prior to any operation, plus 10%.

In terms of price and daily volumes, acquisition operations will be conducted in line with the norms foreseen by the EU regulation 2273/2003.

As previously announced, press rumours published today regarding a supposed interest in the French publishing group Editis, Arnoldo Mondadori Editore SpA reaffirms and underlines that no such interest has been shown and that there are no negotiations underway.