Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the Interim Management Statement at 30 September 2024 presented by Chief Executive Officer Antonio Porro.

“During FY 2024, the improvement in our Group’s economic performance continued”, commented Antonio Porro, CEO and General Manager of the Mondadori Group. “The positive dynamic of revenue and Adjusted EBITDA and the relevant cash generation have allowed us to finance the acquisitions, increase remuneration of shareholders and confirm the objectives we set ourselves as targets for FY 2024. In fact, during the period, the development of our core business continued, also through acquisitions in books and digital”, Mr Porro concluded.

Performance at 30 September 2024

During the first nine months of 2024, consolidated revenue totalled € 705.8 million, showing growth of 3.8% compared with the previous year (€ 679.9 million in the same period of 2023). Net of the change in consolidation scope between the two periods under review, resulting from the consolidation of the companies Star Shop (from 1 February) and Chelsea Green Publishing (from 1 May), organic revenue growth was 1.1%.

Adjusted EBITDA was € 133.3 million, up 3.1% on the € 129.3 million recorded for the first nine months of 2023, mainly thanks to the Trade Books, Retail and Media areas.

The Group’s EBITDA came to € 134.2 million, compared with the € 131.5 million at 30 September 2023, showing, despite lesser non-recurring income linked to the net capital gain deriving from the sale of the Grazia and Icon in 2023, an improvement of approximately € 2.7 million due to the favourable dynamics of the operating components.

The Mondadori Group’s EBIT, positive for € 88.3 million, has shown, compared with the € 90.5 million for the first nine months of 2023, a slight downturn, of € 2.2 million, due to the greater amortisation/depreciation, of approximately € 5 million, recorded during the period under review, mainly deriving from:

• for € 2.3 million, larger investments made during the last 12 months;
• and for an amount of € 1.9 million, from the accounting effects of the Purchase Price Allocation (PPA) process relating to the M&A transactions completed during previous years.

Neutralising the extraordinary items and the amortisation deriving from the allocation of the price for the companies acquired in the last 5 years, the period’s Adjusted EBIT would stand at € 93.8 million, up by approximately 1% compared with the € 92.6 million of the same period of the previous year.

The consolidated result before tax of the first nine months of 2024 was positive at € 82.4 million, a decline of about € 5 million compared with € 87.1 million at 30 September 2023. This reduction is the result of the dynamics already described, in addition to the lesser contribution, for approximately € 2.5 million, of the lesser earnings of associates which in 2023 benefited from non-recurring income (capital gains and fair value revaluation).

Financial expense grew by € 0.2 million in total as a result of greater imputed costs linked to the IFRS 16 debt (€ +0.6 million). The financial expense associated with the bank debt, on the other hand, declined insofar as the higher cost of debt was more than offset by lower average debt.

The Group’s net profit at 30 September 2024, after minority interests, was positive for € 59.3 million, down by approximately € 7 million compared with € 66.3 million in the first nine months of 2023, of which approximately € 5 million arising from the non-ordinary dynamics described previously and the remaining € 2 million resulting from a greater share of the profit attributable to minority interests (€ +1.3 million) and higher tax expense.

The tax component for the first nine months of FY 2024 are, in fact, negative for € 21.6 million compared with € -20.5 million at 30 September 2023: the 2023 result had, in fact, benefited from the recognition of non-taxable income or income subject to reduced taxation such as the capital gains arising from the sales of magazines and of the investment in SEE, as well as the contributions in the Media area.

Adjusted Net Profit, neutralised of the extraordinary components (including capital gains) and amortisation deriving from the purchase price allocation of the companies acquired, would be € 63.2 million, essentially stable compared with the € 62.8 million of the same period of the previous year.

Net Financial Position net of IFRS 16 at 30 September 2024 was € -150.9 million (net debt), essentially unchanged compared with the € -152.3 million at 30 September 2023; the significant cash generation of the business made it possible to finance the acquisitions of Star Shop and Chelsea Green Publishing and to increase remuneration of shareholders without increasing the Group’s financial exposure.

Net Financial Position gross of IFRS 16 at 30 September 2024 stood at € -229.7 million (net debt), up by approximately € 6 million from € -223.9 million at 30 September 2023, due to an IFRS 16 debt component of € -78.8 million, up by approximately € 7 million due to the renovation and development of the network of directly-managed book stores in the Retail area in addition to the acquisitions finalised in 2024 in the Trade Books area.

Cash flow from ordinary operations (i.e. after cash-out for financial expense and tax) in the twelve months prior to 30 September 2024 amounted to € 67.3 million.

At 30 September 2024, extraordinary cash flow of the twelve months previous was negative by approximately € 29 million, mainly due to cash-outs related to net balance of acquisitions and disposals for around € 15 million, restructuring costs for around € 6 million and the renovation of the Segrate headquarters for approximately € 4 million.

As a result, Free Cash Flow LTM at 30 September 2024 – positive for € 38.1 million – reflected the ongoing efficiency of the Group’s structures and confirmed its capacity to self-finance its inorganic growth policy.

Finally, during the period under review, the Mondadori Group recorded dividends for its shareholders for approximately € 31 million (of which 50% already distributed on 22 May 2024 and the remaining € 15.5 million assigned for payment on 20 November 2024).

Outlook for the year

In light of the results achieved in the first nine months of FY and the reference markets scenario, the Mondadori Group confirms the previously communicated guidance for the 2024 financial year.

Income Statement:

• low single-digit revenue growth;
• mid single-digit growth in the Adjusted EBITDA, with margins expected to remain stable at around 17%; this result is due to targeted pricing policies and a further reduction of paper and printing costs.

Financial data

In FY 2024, the Group confirms its significant cash generation capacity and therefore an estimated Ordinary Cash Flow of around € 70 million.

Performance of Business Areas

Trade Books Area

During the first nine months of the year, the book market showed essential stability (-0.5%[1] compared with the previous year).

In this context, the Mondadori Group’s publishing houses recorded a significantly better result than the reference scenario, with overall growth in the first nine months of 1.5% – even more significant in the third quarter alone (+3.6%) – thanks, in particular, to the excellent performance of sales of Italian fiction.
This performance has allowed the Mondadori Group to strengthen its national leadership with a market share of 28%.

As proof of the quality of the publishing plan and the depth and assortment of its catalogue, during the first nine months of the year, the Mondadori Group was able to place 4 titles in the top ten best-sellers list[2]. In addition, in July the Mondadori Group, through the Einaudi publishing house, won the 78th edition of the Strega Prize with “L’età fragile” by Donatella Di Pietrantonio.

During the first nine months of FY 2024, Trade Books area revenue came to € 281.9 million, showing growth of 7.5% (+0.7% like-for-like) compared with € 262.4 million for the same period of the previous year.

Adjusted EBITDA of the Trade Books area for the first nine months of 2024 came to € 42.2 million, showing margin growth of around 3% (€ 1.2 million), due to the improved profitability of the publishing houses, as a result in particular of the growth of digital revenue and lesser incidence of industrial costs (paper, first and foremost), which more than offset the decline in the margin recorded for museum activities.

Education Books Area

The Textbooks market (primary and secondary schools) reported a reduction of 1.5% in the total number of students (sharper in primary school), due to the demographic trend recorded in Italy.

In the first nine months of FY 2024, the Mondadori Group school textbook publishing houses achieved a market share (adoptions) of 31.8%, stable compared with the previous year and thereby confirming its leadership at national level. This result is due to growth in the secondary school segment (middle and upper schools) and a downturn in the primary school segment, characterised by greater volatility and lesser profitability.

In the first nine months of 2024, the area’s business recorded total revenue of € 213.9 million, slightly down (- 0.7%) versus € 215.5 million of the same period in 2023.

Adjusted EBITDA for the Education Books area came to € 73.8 million, in line with the € 73.9 million recorded in the same period of the previous year: the limitation of operating costs made it possible to offset greater logistics costs for € 1.9 million and the loss of margin deriving from the lesser revenue.

Retail Area

As already mentioned, the book market in Italy at end-September recorded a slight overall decline (-0.5%[3]) compared with the same period of 2023; growth of the physical channel (+1.1%); negative performance of the on-line channel (estimated at -3.3%).
In this context, the Retail area continued to outperform the market; Mondadori Retail’s market share in the Book product stood at 13.2%, an increase compared with 30 September 2023, driven by an excellent performance of both direct and franchise stores and good performance of the on-line channel.

Total revenues (book and non-book) amounted to € 143.8 million, an increase of € 10.4 million (+7.8%) compared with € 133.4 million compared to the same period of the previous year.
On an organic level (i.e. net of revenue from Star Shop, consolidated in this area as of 1 February 2024) the growth was 2.6%. The growth in revenue on an organic level would have been even more significant (+3.8%) without the impact of the temporary closures (due to renovation work) of the bookstores in Marcianise and Nola, which weighed on revenue for over € 1.6 million in the first nine months of the current financial year.

An analysis of sales by channel compared with the previous year reveals:

• further growth in revenue of direct bookstores (+5.3%);
• the continuous growth of franchisee bookstores (+3.1%);
• a slight decline in the on-line channel (-4%);
• the positive impact of revenue deriving from the management (direct and franchised) of Star Shop comic book stores and e-commerce website;
• the decline in revenues of Bookclub.

During the first nine months of the current year, the Retail area presented Adjusted EBITDA of €9.4 million (net of the Star Shop comic book stores margin impact), and highlighted significant growth, of 12.8%, compared with the first nine months of 2023 (€ +1.1 million). This result confirms progression and constant improvement in performance seen for several years now.
Adjusted EBITDA also suffered the negative impact (€ 0.6 million) of the specified restoration projects, without which Adjusted EBITDA growth would have been around 20% (€ +1.7 million) compared with the same period of the previous year.

Media Area

During the first eight months of FY 2024, the advertising market recorded an increase of 7.6% compared with the previous year; in this context, the digital segment grew by 5.5% while magazines declined by 1.4%[4]. The magazines circulation market declined by 6.7%[5] and add-on products recorded a reduction of 10.1%[6].

In the first nine months of FY 2024, revenue in the Media area amounted to € 106.4 million, and posted an increase of around 5% since the previous year, stemming from the strong growth in the Digital component, which continues to offset the structural downturn of the component linked to traditional activities. Specifically:

• the digital business (approximately 43% of the area’s total revenue) has shown growth in advertising revenue of 24.5%, resulting in particular from the positive performance of the MarTech segment and the excellent results of the social agency and Webboh;
• the traditional print business declined by 6.9%, mainly due to the structural drop in add-on sales and readership during the quarter under review.

Adjusted EBITDA for the Media area came to € 12.8 million in the first nine months of FY 2024, showing growth of approximately 25% compared with the previous year, mainly due to the digital business. The EBITDA margin recorded an increase of 2 percentage points, from 10.1% to 12%.

Consolidated financial highlights of third quarter 2024

The consolidated revenue of the third quarter of 2024 came to € 318.7 million, essentially stable compared with the same quarter of the previous year: like-for-like, the organic performance of revenue recorded a slight downturn of 2%.
Adjusted EBITDA was € 92.4 million, an increase of almost € 1 million on the € 91.1 million recorded for the third quarter of 2023.
The quarter’s EBITDA came to € 91.8 million (€ 91.1 million in Q3 2023), revealing that, despite the lesser non-recurring income, there had been an improvement of € 0.6 million that reflects the positive operating trend.
EBIT of € 75.6 million was reported, showing a slight reduction of € 0.9 million compared with the same period of the previous year. Despite the positive operating performance of all business areas that had led to an improvement in the profitability of the Group, the higher depreciation and amortisation recorded, in the amount of € 1.6 million, as a result of the growing investments and the PPA process, resulted in this downturn compared with the previous year.
Neutralising the extraordinary items and the amortisation deriving from the allocation of the price for the companies acquired in the last 5 years (PPA), Adjusted EBIT would stand at € 78.4 million, up by approximately € 0.5 million compared with the third quarter of 2023.

Start of share buyback program to service the 2024-2026, 2023-2025 and 2022-2024 performance share planstart of share buyback program to service the 2024-2026, 2023-2025 and 2022-2024 performance share plans

The Board of Directors approved the start of a share buyback program, under Article 5 of Regulation (EU) no. 596/2014, to be executed in accordance with the terms and conditions, already disclosed to the public, resolved by the Ordinary Shareholders’ Meeting of 24 April 2024 which, among other things, authorized:

• the purchase and disposal of treasury shares for a maximum amount of up to 0.39% of the share capital, which is intended to provide the Company with the no. 1,018,196 shares required over the three-year period to meet the obligations under the 2024-2026 Performance Share Plan established by the same Shareholders’ Meeting, pursuant to Article 114-bis of the TUF;
• the continuation of the buyback program to service the 2022-2024 Performance Share Plan and the 2023-2025 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 buyback program are shown below:

• Purpose of the plan

The sole purpose of the program is the buyback of Arnoldo Mondadori Editore S.p.A. treasury shares to service the 2024-2026 Performance Share Plan, the 2023-2025 Performance Share Plan and the 2022-2024 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 volumes and unit purchase prices will, however, be defined in accordance with the conditions governed by Article 3 of EU Delegated Regulation 2016/1052. Specifically, no shares may 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, daily purchase amounts will not exceed 25% of the daily average volume of Mondadori shares traded over the 20 trading days before the dates of purchase.

• Maximum number of shares to purchase

Purchases will regard a maximum of no. 720,000 ordinary shares (equal to 0.275%) of the share capital, taking account of the treasury shares already held in the Company’s portfolio, to service the aforementioned Performance Share Plans, in the manners and within the limits set out in the relevant Regulations.
The maximum total amount of shares under the program is therefore within the limits of 10% of the share capital indicated by the Shareholders’ Meeting of 24 April 2024, taking account also of the no. 548,471 treasury shares, equal to 0.209% of the share capital, already held by the Company to date.

• Duration of the plan

The buyback program runs from 21 November 2024. The conclusion of the program, in any case by the Shareholders’ Meeting convened to approve the financial statements at 31 December 2024, the date on which authorisation to purchase treasury shares resolved by the Shareholders’ Meeting of 24 April 2024 expires, will be disclosed to the market.
The buyback program may be renewed upon further authorization by the shareholders.

• Buyback procedures

The buyback program will be coordinated and executed by an authorized intermediary, who will make the purchases independently, with no influence from Arnoldo Mondadori Editore S.p.A. as regards the timing of the purchases.
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 Issuers’ 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 24 April 2024.
Any subsequent changes to the buyback program will be promptly disclosed by the Company. The transactions made will be disclosed to the market in the manners and within the time limits of applicable law.
For information on the above Performance Share Plans, reference should be made to the information documents prepared pursuant to Article 114-bis of Legislative Decree no. 58/1998 and to Article 84-bis of CONSOB Regulation no. 1197/1999 and available on the website www.mondadorigroup.com ( Governance section) and at the authorized storage mechanism 1Info (www.1Info.it).

Convening of the extraordinary shareholders meeting for the proposed supplementation of the company’s bylaws. notice of publication of documents

The Board of Directors has also convened the Extraordinary Shareholders Meeting for 18 December 2024 (19 December in the event of a second call) to resolve on a proposal to supplement the company’s bylaws. The supplement regards, in execution of the provisions introduced by art. 11 of Italian Law no. 21 of 5 March 2024 (the “Capital Markets Law”), the attribution to the Board of Directors of the faculty to determine that intervention and exercise of voting rights in shareholders’ meetings may also take place exclusively through the Company’s appointed representative in accordance with Article 135-undecies.1 of Italian Legislative Decree no. 58 of 24 February 1998.
The notice calling the shareholders’ meeting and the Directors’ Explanatory Report are available to the public, in accordance with articles 125 bis and 125 ter of Italian Legislative Decree no. 58 of 24 February 1998, on the Company’s website www.mondadorigroup.com (Governance/Shareholders’ meeting section) and on the authorised storage mechanism 1Info at www.1info.it. The Call notice is also published in extract form, on 14 November, in the newspaper “il Giornale”.

The Interim Management Statement at 30 September 2024 is made available by today through the authorised storage mechanism 1info (www.1info.it), on www.mondadorigroup.com (Investors section) and at the registered office.

The presentation of the results at 30 September 2024, approved today by the Board of Directors, is available on www.1info.it and on www.mondadorigroup.com (Investors section).

A Q&A session will be held in conference call mode at 3.30 p.m. for the financial community, attended by the CEO of the Mondadori Group, Antonio Porro, and the CFO, Alessandro Franzosi. Journalists will be able to follow the meeting in listening mode only, by connecting to the following phone number +39.02.8020927 or via web at: https://hditalia.choruscall.com/?calltype=2&info=company.

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): 

1. Consolidated Statements of Financial Position
2. Consolidated Income Statement
3. Consolidated income statement – III quarter
4. Group cash flow
5. Glossary of terms and alternative performance measures use