Arnoldo Mondadori Editore S.p.A. (LEI Code 815600049A1F9AFE6666) announces the purchase on the MTA (Electronic Stock Market), in the period from 17 to 21 June 2019, of no. 42,750 ordinary shares (equal to 0.016% of the share capital) at an average unit price of Euro 1.5121 for a total amount of Euro 64,640.60.

These transactions were made under the authorization to purchase treasury shares approved by the Shareholders’ Meeting on 17 April 2019 (previously disclosed pursuant also to art. 144 bis of Consob Regulation 11971/99, to art. 5 of Regulation (EU) 596/2014 and to art. 132 of Legislative Decree 58/98).

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

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

Following the purchases made so far, Arnoldo Mondadori Editore S.p.A. holds no. 1,449,148 treasury shares, equal to 0.554% of the share capital and to 0.362% of the total amount of voting rights.

Purchases in detail in the complete pdf.

Arnoldo Mondadori Editore S.p.A. (LEI Code 815600049A1F9AFE6666) announces the purchase on the MTA (Electronic Stock Market), in the period from 10 to 14 June 2019, of no. 59,695 ordinary shares (equal to 0.023% of the share capital) at an average unit price of Euro 1.5645 for a total amount of Euro 93,391.44.

These transactions were made under the authorization to purchase treasury shares approved by the Shareholders’ Meeting on 17 April 2019 (previously disclosed pursuant also to art. 144 bis of Consob Regulation 11971/99, to art. 5 of Regulation (EU) 596/2014 and to art. 132 of Legislative Decree 58/98).

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

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

Following the purchases made so far, Arnoldo Mondadori Editore S.p.A. holds no. 1,406,398 treasury shares, equal to 0.538% of the share capital and to 0.351% of the total amount of voting rights.

Purchases in detail in the complete pdf.

Arnoldo Mondadori Editore S.p.A. announced today that, following the procedure to inform and negotiate with the French trade unions as set out by law, it has signed an agreement on the sale of its subsidiary Mondadori France S.A.S. to Reworld Media S.A..

The agreement is in line with the Mondadori Group’s strategy to continue along its strategic repositioning path, placing increasing focus on the more profitable core businesses.

The scope subject to sale includes the 100% interest in the share capital held by Arnoldo Mondadori Editore S.p.A. in Mondadori France S.A.S. and its subsidiaries and/or investees.

The consideration for the transaction amounts to € 70 million (cash free/debt free), plus an earn-out of € 5 million to be paid according to the terms disclosed to the market on 18 February 2019.

As a result of the deal, Arnoldo Mondadori Editore S.p.A. will hold from an 8% to 10% interest in the share capital of Reworld Media S.A..

If the transaction is completed, the estimated improvement in the Mondadori Group’s net financial position at closing date would be approximately € 59 million.

As already disclosed to the market, completion of the transaction is subject to the fulfilment of the following conditions precedent:

• authorization by the Autorité de la Concurrence;
• approval of the reserved capital increase by the shareholders of Reworld Media;
• provision of a bank loan, already authorized, to Reworld Media.

Today, the Shareholders’ Meeting of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, approved the financial statements for the year ended 31 December 2018 and reviewed the 2018 consolidated financial statements of the Mondadori Group. Adjusted net profit from continuing operations amounted to € 20.3 million as forecast.

As a result of the fair value adjustment of the French assets (€ -200.1 million) subject to disposal, the net loss at 31.12.2018 was € -177.1 million versus € 30.4 million in 2017. The Shareholders’ Meeting resolved to fully cover this loss by using a corresponding amount of reserves, in accordance with the proposal made by the Board of Directors.

In his report, CEO Ernesto Mauri presented the key figures on the performance of the Mondadori Group in 2018, as disclosed to the market last 14 March 2019.

Moreover, the Shareholders’ Meeting resolved, in ordinary session, on the following items on the agenda:

REMUNERATION REPORT
The Shareholders’ Meeting approved Section One of the Remuneration Report on the policy adopted for 2019 regarding remuneration to directors and key management personnel.

RENEWAL OF THE AUTHORIZATION TO PURCHASE AND SELL TREASURY SHARES
Given the approaching expiry of the previous authorization resolved on 24 April 2018, the Meeting renewed the authorization to purchase treasury shares up to a cap of 10% of its share capital. The Meeting also authorized to sell the treasury shares acquired by the Company in compliance with art. 2357-ter of the Italian Civil Code.

To date, Arnoldo Mondadori Editore S.p.A. holds a total of no. 1,346,703 treasury shares, equal to 0.515% of the share capital.

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

Motivations
The motivations underlying the authorization granted to purchase and sell treasury shares refer to the opportunity to attribute to the Board of Directors the power to:

• to use the treasury shares purchased as compensation for the acquisition of interests within the framework of the Company’s investments;
• to use the treasury shares purchased against the exercise of option rights, including conversion rights, deriving from financial instruments issued by the Company, its subsidiaries or third parties and to use the treasury shares for lending, exchange or transfer transactions or to support extraordinary transactions on the Company’s capital or financing transactions that imply the transfer or sale of treasury shares;
• to undertake any investments, directly or through intermediaries, including for the purpose of containing abnormal movements in share prices, stabilizing share trading and prices, supporting the liquidity of the share on the market, in order to foster the regular conduct of trading beyond normal fluctuations related to market performance, without prejudice in any case to compliance with applicable statutory provisions;
• to possibly rely on investment or divestment opportunities, if considered strategic by the Company, also in relation to available liquidity;
• to sell treasury shares as part of share-based incentive plans pursuant to art. 114-bis of Legislative Decree 58/1998, and of plans for the free allocation of shares to Shareholders.

Duration
The authorization to purchase treasury shares is set to last until the approval of the financial statements for the year ending 31 December 2019, while the authorization to sell is granted to last for an unlimited period.

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

Criteria for purchasing treasury shares and indication of the minimum and maximum purchasing cap
Purchases shall be made on regulated markets pursuant to the combined provisions of art. 132 of Legislative Decree no. 58/1998, of art. 5 of Regulation (EU) 596/2014, (ii) of art. 144-bis of the Issuer Regulation, (iii) of the EU and national legislation on market abuse, and (iv) of Accepted Market Practices.

Specifically, purchases shall be made on regulated markets, according to operating criteria which do not allow the direct combination of the purchase negotiation proposals with pre-determined sale negotiation proposals.

The minimum and maximum purchase price would be determined under the same conditions established by the preceding Shareholders’ Meeting authorizations, i.e. at a minimum unit price not lower than the official Stock Exchange price of the day preceding the purchase transaction, reduced by 20%, and a maximum not higher than the official Stock Exchange price of the day preceding the purchase transaction, increased by 10%.

In terms of daily prices and volumes, the purchase transactions would be completed in compliance with the conditions established in art. 3 of the Delegated Regulation (EU) 2016/1052.

Purchases instrumental in (a) the support to market liquidity and (b) the purchase of treasury shares to build a so-called “treasury shares” portfolio, shall also be made in accordance with the conditions provided by market practices, under the combined provisions of art. 180, par. 1, lett. c) of Legislative Decree 58/1998 and of art. 13 of (EU) Regulation 596/2014.

With regard to the sale of treasury shares, the Meeting resolved to authorize the Board of Directors to sell purchased treasury shares: (i) through disposal of the shares on regulated markets; (ii) as consideration in the acquisition of interests as part of the Company’s investment policy; (iii) in the exercise of option rights, including conversion rights, deriving from financial instruments issued by the Company or third parties; (iv) to service share-based incentive plans approved by the Shareholders’ Meeting without any time limits.

2019-2021 PERFORMANCE SHARE PLAN
The Shareholders’ Meeting convened today approved, pursuant to art. 114-bis of Legislative Decree 58/1998, the establishment of a Performance Share Plan for the three-year period 2019-2021 intended for the Chief Executive Officer, the CFO – Executive Director and certain managers of the Company, in accordance with the conditions previously disclosed to the market on 14 March 2019, pursuant to art. 84-bis, paragraph 1 of Issuer Regulation 11971/1999.

For details on the 2019-2021 Performance Share Plan, the beneficiaries and the main characteristics of the Regulations of the Plan, reference should be made to the Information Document drawn up by the governing body, pursuant to CONSOB Regulation no. 11971/1999, and to the Explanatory Report, published on the Company’s website www.gruppomondadori.it “Governance/Shareholders’ Meeting” section.

APPOINTMENT OF THE INDEPENDENT AUDITORS
Following expiry of the assignment to Deloitte & Touche S.p.A. on approval of the 2018 financial statements, the Shareholders’ Meeting has tasked Ernst & Young S.p.A. with the statutory audit for the years 2019-2027, approving the relating fee.

In its extraordinary session, the Shareholders’ Meeting also resolved on the:

REVOCATION AND GRANTING OF POWERS TO THE BOARD OF DIRECTORS
In its extraordinary session, the Shareholders’ Meeting adopted, in accordance with the proposals of the Board of Directors, the resolutions referred to in articles 2443 and 2420-ter of the Italian Civil Code, relating to the granting of powers to the Board of Directors to increase the share capital and issue convertible bonds.

Specifically, the Shareholders’ Meeting resolved on:

• the revocation, solely regarding the unexercised portion, of all the powers to increase the share capital and issue convertible bonds granted to the Board of Directors by the Extraordinary Shareholders’ Meeting held on 30 April 2014;
• the granting of powers to the Board of Directors, pursuant to art. 2443 of the Italian Civil Code, to make a divisible increase in the share capital against payment, on one or more occasions, reserved with pre-emptive rights to the assignees, within a period of five years from the resolution date for a maximum nominal amount of € 75,000,000;
• the granting of powers to the Board of Directors, pursuant to art. 2420-ter of the Italian Civil Code, to issue, on one or more occasions, bonds convertible into shares, for a maximum nominal amount of € 250,000,000, including, pursuant to art. 2420-ter, par. 1, of the Italian Civil Code, the powers to correspondingly increase the share capital to service the conversion by issuing ordinary shares with the same characteristics as outstanding shares, for a maximum nominal amount of € 250,000,000, within a period of five years from the resolution date;
• the granting of powers to the Board of Directors, in accordance with art. 2443 of the Italian Civil Code, to make a divisible increase in the share capital against payment, on one or more occasions, within a period of five years from the resolution date, excluding pre-emptive rights in accordance with art. 2441, par. 4, second sentence, of the Italian Civil Code, by issuing ordinary shares up to 10% of the total amount of shares forming the share capital of Arnoldo Mondadori Editore at the date of any exercise of the powers and, in any case, for a nominal amount of up to € 20,000,000.

The resolved renewal and granting of powers is motivated by the expediency to maintain and grant the Board of Directors the general powers to implement, through faster and more streamlined procedures than the resolutions adopted by the Extraordinary Shareholders’ Meeting, any capital transactions to strengthen the financial structure in support of the Group’s development targets.

With particular regard to the powers that may be exercised for capital increases with the exclusion of pre-emptive rights up to a ceiling of 10% of the existing capital, mention should be made that the offer made to third parties may represent an effective tool to increase the free float and maintain appropriate liquidity of the share at any moment, or be functional to the participation of qualified investors in the share capital, while curbing the diluting effects for existing shareholders.

NON-REPLENISHMENT OF REVALUATION RESERVES
The Extraordinary Shareholders’ Meeting also resolved not to replenish the revaluation reserves pursuant to Law no. 72 of 19 March 1983 and Law no. 413 of 30 December 1991, used, according to the resolution of today’s Ordinary Shareholders’ Meeting, to cover the losses recognized in the Company’s financial statements at 31 December 2018, with their resulting elimination, with no obligation to replenish them.

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

Today, the meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, reviewed and approved the draft Parent Company and Group consolidated financial statements at 31 December 2018 presented by CEO Ernesto Mauri.

PERFORMANCE AT 31 DECEMBER 2018
In 2018, the Mondadori Group achieved the targets set: on the one hand, further operating and financial consolidation and, on the other, the launch of a new strategic repositioning phase, with the revision of the portfolio of activities in the Magazines Italy Area and the start of the disposal of Magazines France, enabling the Group to place greater focus on the more profitable core businesses.
The results achieved in the year, in line with the targets set, also confirm the Group’s leadership in its segments of operation.

Consolidated net revenue in 2018 amounted to € 891.1 million, down by 8.1% versus € 970.1 million in 2017.

Consolidated adjusted EBITDA increased by more than € 5 million to reach € 90.1 million versus € 84.5 million in 2017. Specifically:

• the Books Area increased its contribution to reach 87% of Group EBITDA (from 83%), with margins of approximately 19% on revenue and an 11% increase versus 2017, due mainly to the Educational Area.
• the Retail Area increased adjusted EBITDA to reach € 1.4 million versus € 0.7 million.
• the Magazines Italy Area recorded adjusted EBITDA of € 11.9 million, down by approximately € 3 million versus the prior year.

The Group’s EBITDA margin in 2018 rose to 10.1% of consolidated revenue (from 8.7%), confirming the significant improvement in operating efficiency.
The percentage on revenue of goods sold, variable costs and overheads was reduced as a result of ongoing measures to improve efficiency and contain costs across all the areas.

Additionally, the reduction in cost of personnel continued (-6.7% versus the prior year; approximately -5.7% on a like-for-like basis^[1]): at 31.12.2018, employees, considering continuing operations, were 2,132, down by 6.2% versus 2,275 at 31 December 2017, as a result of the disposal of Inthera and Panorama, and of the continued efficiency actions on each business area of the Group.

Reported EBITDA fell by € 9.2 million to € 77.5 million versus € 86.7 million in 2017.
Overall, non-recurring expense increased by approximately € 14 million versus the prior year, due to business restructuring of approximately € 10 million and lower extraordinary income versus 2017.

Consolidated EBIT in the year amounted to € 51.2 million, dropping by 15.2% versus € 60.4 million in 2017, as a result of the abovementioned decrease in EBITDA; amortization, depreciation and impairment amounted to € 26.2 million, in line with the prior year.

The consolidated result before tax came to a positive figure of approximately € 35.2 million and included:

• the sharp drop in financial expense (from € 7 million to € 2.9 million), as a result of an average interest rate that has more than halved versus the prior year (from 2.72% to 0.93%), and of a lower average net debt;
• a negative performance by associates (consolidated at equity), down from € -4 million to € -13.2 million, due in particular to Mach2 Libri, active in the distribution of books in the Large Retailers channel and put into liquidation in 2018.

Adjusted net profit from continuing operations[2] amounted to € 20.3 million versus € 27.2 million in 2017. Mondadori France recorded net revenue of € 305.6 million in the period, down by 7.5%, and an adjusted EBITDA of € 26.1 million, in line versus the prior year.
An adjustment was made in the year to the fair value of the assets being sold, to reflect the negotiations in progress, previously measured at value in use, amounting to € 200.1 million.
Accordingly, the adjusted net result from discontinued operations came to € -195.5 million, including a net profit of € 2.6 million from Mondadori France (€ 3.3 million in 2017).
The Group’s net result, following the fair value adjustment of French assets, came to € -177.1 million versus € +30.4 million in 2017.

The Group’s net financial position at 31 December 2018 stood at € -147.2 million, improving by approximately 22% versus € -189.2 million at 31 December 2017, thanks mainly to cash generated from ordinary operations of continuing operations of € 52.1 million.
In 2018 the debt/adjusted EBITDA ratio was 1.6x.

CONSOLIDATED FINANCIAL RESULTS FOR FOURTH QUARTER 2018
Consolidated revenue in fourth quarter 2018 amounted to € 233 million, down by 11.4% versus € 263.1 million in the same quarter of 2017.

Adjusted EBITDA grew by 15% in the last quarter of the year to reach € 27.3 million versus € 23.7 million in fourth quarter 2017, driven by the improved operating performance of school textbooks and by Magazines Italy.

Consolidated EBITDA came to € 24.5 million, up by 4% versus € 23.5 million in the same quarter of the prior year, thanks to the abovementioned performance of the Books Area and the non-recurring income from the disposal of an owned property, partly mitigated by non-recurring expense recorded mainly in the Magazines Italy Area.
Amortization, depreciation and impairment, amounting to € 10.7 million, were in line with fourth quarter 2017.
Financial expense, as in prior quarters, benefited from lower debt costs and lower average debt versus the prior year.

Adjusted net profit from continuing operations came to € 4.5 million, up sharply from € 1.7 million in fourth quarter 2017.

BUSINESS OUTLOOK[3]

The Group will continue its strategic repositioning and further focus on the more profitable core businesses, in particular by consolidating its leadership in the Books Area, completing the sale of Mondadori France and identifying new areas of development.
In line with the outlined strategy and in light of the current relevant context, the operating targets for 2019, based on the current scope, allow the Group to estimate, at a consolidated level, a slight decrease in revenue and a single-digit growth of adjusted EBITDA versus 2018.
The net result from continuing operations in 2019 is expected to be significantly higher than last year (in the € 30-35 million range).
Cash flow from ordinary operations in 2019 is forecast at around € 45 million, creating sustainable conditions for a possible return in the future to the dividend.

PERFORMANCE OF BUSINESS AREAS

BOOKS
In 2018, the national Trade books market recorded a slight decline (-1.1% in terms of value versus the prior year^[4], after the sharp increase of +6.1% in 2017).

Against this backdrop, the Mondadori Group, considering all its publishers, boasts a market leadership position, with a 27.4% share and 4 titles in the top 10 bestsellers of the year.

The Mondadori Group retained its leadership of the school textbooks market with an overall 22.9% share, adoptions-wise^[5],.
In 2018, the segment grew moderately overall, up by approximately 1% in the primary and lower secondary segment, and was steady in the upper secondary segment^[6].

In 2018, revenue from the Area amounted to € 450.4 million, down by 6.7% versus € 483 million in the prior year. Specifically:

• Trade fell by 13%, as a result of the comparison with 2017, marked by the strong concentration of bestsellers, and of the decline of the Large Retailers channel;
• the Educational Area reported a positive performance across all the activities of the publishers (-0.5%);
• distribution activities fell (-17.7%), due mainly to the reduction in current contracts.

Adjusted EBITDA of the Books Area amounted to € 84.7 million, up by 11% versus 2017.
2018 saw efforts continue on implementing the management policy focused on a targeted editorial planning in the Trade segment, and on the ongoing optimization of operating processes across all segments, which allowed the Group to achieve profitability of approximately 19%.
Reported EBITDA amounted to € 82.9 million, up by approximately 9% versus € 76.2 million in 2017.

RETAIL
In 2018, the Group continued to implement strategic actions to align the organization and the sales channels to the developments of the market, working to gradually revise the network of stores and its formats.
In the Books segment (making for 80% of store revenue), Mondadori Retail’s market share stood at 14.4%.

In 2018, the Retail Area achieved revenue of € 191.8 million, down by 3.4% versus € 198.5 million in the prior year, as a result of:

• the decline of the relevant market for books;
• a targeted reduction in revenue from consumer electronics;
• the streamlining of the direct sales network launched in second half 2017.

The analysis by channel shows the following:

• a 0.9% growth of directly-managed bookstores (-2.9% on a like-for-like basis in terms of stores);
• a growth of franchised bookstores (+0.9%; -0.4% on a like-for-like basis in terms of stores);
• a 10.9% drop in Megastores (-4.4% on a like-for-like basis in terms of stores);
• a decline in the online sector (-9.3% due to the delayed implementation of the decree on the “18app” Culture Bonus)^;
• a 9% drop by the Bookclub, in line with the decline seen in prior years.

In 2018, Mondadori Retail recorded an adjusted EBITDA of € 1.4 million, up versus € 0.7 million in 2017, thanks to the cost cutting measures through the sale of non-profitable stores.
EBITDA, which includes non-recurring expense of approximately € 1.4 million, came to breakeven.

MAGAZINES ITALY
In Italy, the magazines market in 2018 witnessed a continued drop in advertising in the print, circulation and add-on sales segments.

The Magazines Italy Area generated total revenue of € 287 million in 2018, down by 12% versus € 326.1 million in 2017. On a like-for-like basis (the disposal of Inthera and the weekly Panorama), the drop would be 9.1%. Specifically:

• circulation revenue was down by 11.1%. In the newsstands and subscriptions channels, the Group retained its market leadership with a share in terms of value of 30.7%.
• total advertising revenue (print + web) was down by approximately 5%: the print segment fell by approximately 10% (on a like-for-like basis, the trend was in line with the market’s -9%); the digital segment grew by approximately 8%, thanks to the positive performance of advertising sales in the food and wellness & beauty segments.
  Gross digital advertising revenue accounted for approximately 32% of total revenue (27% in the prior year).
• revenue from add-on products was down sharply (approximately -21%) versus 2017.

The Mondadori Group was once again Italy’s top digital publisher, with a unique audience rated by Comscore of close to 30 million unique users per month (in December 28.9 million, up by 11% versus December last year), with an annual 2018 average up by 17% versus 2017^[7].

Adjusted EBITDA of the Magazines Italy Area amounted to € 11.9 million (€ 14.8 million in 2017, due to the fall in print revenue, partly offset by the positive performance of digital operations of € 5.7 million versus € 2.2 million in the prior year).

The Area’s reported EBITDA amounted to € -0.2 million versus € +12.1 million in 2017, as a result mainly of higher restructuring costs recorded in the period from the necessary accelerated structural reorganization and cost reduction process, and of the loss generated by disposals.

MAGAZINES FRANCE (discontinued operations)
In 2018, Mondadori France’s relevant markets continued the downturn in newsstands sales (-7.1%)^[8] and in print advertising sales (-10.8%)^[9]: Mondadori France retained its position as one of the top players in the magazines market, with an 11% share^[10].

In this shrinking market, Mondadori France recorded revenue of € 305.6 million, down by -7.5% versus € 330.4 million in 2017. Specifically:

• Circulation revenue (77% of the total) was down by approximately 6% versus 2017;
• Advertising revenue (print + web) dropped by approximately 7% versus 2017: the print segment (88% of total advertising revenue) was down by approximately 7% versus 2017; the digital segment fell by 11.2% versus the market’s -0.5%.

Adjusted EBITDA in 2018 amounted to € 26.1 million versus € 26 million in the prior year.
Reported EBITDA amounted to € 23.1 million, up versus € 18.4 million in 2017 (which included significant restructuring costs).

PERFORMANCE OF ARNOLDO MONDADORI EDITORE S.P.A.
The Parent Company’s income statement at 31 December 2018 shows the same net result as in the consolidated financial statements, with a loss of € 177.1 million, due to the fact that the Company has opted to use the equity method to measure its investments in the separate financial statements.

Revenue amounted to € 256.6 million, down versus € 282.3 million in the prior year, due mainly to the reduction in print operations in the Magazines Italy Area.
Revenue from the digital operations of the Magazines Italy Area, on the other hand, increased thanks to the positive results from advertising sales. The Parent Company also comprises revenue from services provided to other Group companies, equal to € 35.3 million.

Adjusted EBITDA declined slightly from € +0.3 million to € -0.4 million, as a result mainly of the decline in the margins from print operations in the Magazines Italy Area, offset by a sharp rise in digital operations.

2018 benefited from net positive extraordinary items of € 2.6 million, attributable mainly to the disposal of the Sporting property complex in Verona, but was affected by higher restructuring costs in the Magazines Italy Area (€ +7.2 million versus 2017).

The disposal of the subsidiary Mondadori France and the consequent adjustment of the book value to fair value led to the recognition of expense from discontinued operations; the net result of the Company, therefore, closes with a loss of € 177.1 million (same as in the consolidated financial statements); the Board of Directors has decided to propose the Shareholders’ Meeting to fully cover the loss for the year.

SIGNIFICANT EVENTS AFTER YEAR-END
On 11 February 2019, Andrea Santagata was appointed Chief Innovation Officer, reporting directly to CEO Ernesto Mauri. This new position was created with the aim of further investing in the development and formulation of digital and transformation strategies for all the Group’s activities.

Arnoldo Mondadori Editore S.p.A. signed a put option that guarantees the right to sell its subsidiary Mondadori France S.A.S. to Reworld Media S.A. in accordance with the terms disclosed to the market on 18 February 2019.

The Board of Directors of Arnoldo Mondadori Editore S.p.A. has convened the ordinary and extraordinary Shareholders’ Meeting in first call on Wednesday 17 April 2019 to approve the financial statements for the year ended 31 December 2018.

PROPOSED RENEWAL OF THE AUTHORIZATION TO PURCHASE AND SELL TREASURY SHARES
Following the expiry of the preceding authorization resolved upon by the Shareholders’ Meeting on 24 April 2018, with the approval of the financial statements at 31 December 2018, the Board of Directors will propose to the next Shareholders’ Meeting the renewal of the authorization to purchase and sell treasury shares with the aim of retaining the applicability of law provisions in the matter of any additional re-purchase plans and, consequently, of seizing any investment and operational opportunities involving treasury shares.
Here below are the main elements of the proposal made by the Board of Directors:

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

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

Duration
The authorization to purchase treasury shares is requested to last until the approval of the financial statements for the year ending 31 December 2019, while the authorization to sell is requested to last for an unlimited period.

Maximum number of purchasable treasury shares
The renewed authorization will enable the Company to reach the cap of 10% of its share capital, also considering the shares held directly and indirectly from time to time, in line with the previous authorization.

Criteria for purchasing treasury shares and indication of the minimum and maximum purchasing cap
Purchases shall be made pursuant to the combined provisions of art. 132 of Legislative Decree no. 58/1998, of art. 5 of Regulation (EU) 596/2014, (ii) of art. 144-bis of the Issuer Regulation, (iii) of the EU and national legislation on market abuse, and (iv) of Accepted Practices.
Specifically, purchases shall be made on regulated markets, according to operating criteria which do not allow the direct combination of the purchase negotiation proposals with pre-determined sale negotiation proposals.
The minimum and maximum purchase price would be determined under the same conditions established by the preceding Shareholders’ Meeting authorizations, i.e. at a minimum unit price not lower than the official Stock Exchange price of the day preceding the purchase transaction, reduced by 20%, and a maximum not higher than the official Stock Exchange price of the day preceding the purchase transaction, increased by 10%.
In terms of daily prices and volumes, the purchase transactions would be completed in compliance with the conditions established in art. 3 of the Delegated Regulation (EU) 2016/1052.
Purchases instrumental in (a) the support to market liquidity and (b) the purchase of treasury shares to build a so-called “treasury shares” portfolio, shall also be made in accordance with the conditions provided by market practices, under the combined provisions of art. 180, par. 1, lett. C) of the TUF and of art. 13 of (EU) Regulation 596/2014.

With regard to the sale of treasury shares, the Board of Directors resolved to propose to the Shareholders’ Meeting to sell the shares in any appropriate manner in the interest of the Company, for purposes which include the sale on regulated markets, the exercise of option rights, including conversion rights, deriving from financial instruments issued by the Company or third parties, support to incentive plans approved by the Shareholders’ Meeting, and as consideration for the acquisition of equity interests as part of the Company’s investment policy.

To date, Arnoldo Mondadori Editore S.p.A. holds a total of no. 1,346,703 treasury shares, equal to 0.515% of the share capital.
For further information on the proposed authorization for the purchase and sale of treasury shares, reference should be made to the Directors’ Explanatory Report, which will be published within the time limits and in the manner prescribed by applicable regulations.

PROPOSED ADOPTION OF A 2019-2021 PERFORMANCE SHARE PLAN
The Board resolved, on a proposal from the Remuneration and Appointments Committee, and in keeping with the introduction of the performance share approved last year for the medium/long-term remuneration of executive directors and executives with strategic responsibilities, to submit to the approval of the Ordinary Shareholders’ Meeting, the adoption of a 2019-2021 Performance Share Plan, in accordance with art. 114-bis of Legislative Decree no. 58 of 24 February 1998, intended for the Chief Executive Officer, the CFO – Executive Director and a number of Company managers who have an employment and/or directorship relationship with the Company or with its subsidiaries on the granting date of the shares.

With the adoption of the Plan, the Company aims to encourage Management to improve medium to long-term performance, in terms of both industrial performance and growth in the value of the Company.
The Plan envisages the right for beneficiaries to receive a bonus in the form of Company shares, subject to the achievement of specific targets set and measured at the end of the three-year performance period from 2019 to 2021.
These targets are structured to include both shareholder remuneration indicators and management indicators functional to raising the share value, ensuring maximum alignment of Management remuneration and the creation of value for the Company.
For details on the proposed adoption of the 2019-2021 Performance Share Plan, the beneficiaries and the main characteristics of the Regulations of the Plan, reference should be made to the Information Document drawn up by the governing body, pursuant to art. 84-bis and annex 3A of the Issuer Regulation, and to the Explanatory Report, which will be published within the time limits and in the manner prescribed by applicable regulations.

PROPOSED REVOCATION AND GRANTING OF POWERS TO THE BOARD OF DIRECTORS PURSUANT TO ARTICLES 2443 AND 2420 TER OF THE ITALIAN CIVIL CODE
The Board of Directors will propose the Shareholders’ Meeting, called on 17 April 2019, also in extraordinary session, to adopt the resolutions referred to in articles 2443 and 2420 ter of the Italian Civil Code, relating to the granting of powers to the Board of Directors to increase the share capital and issue convertible bonds.

Specifically, the Board will propose the Shareholders’ Meeting:

• the revocation, solely regarding the unexercised portion, of all the powers to increase the share capital and issue convertible bonds granted to the Board of Directors by the Extraordinary Shareholders’ Meeting held on 30 April 2014;
• the granting of powers to the Board of Directors, pursuant to art. 2443 of the Italian Civil Code, to make a divisible increase in the share capital against payment, on one or more occasions, reserved with pre-emptive rights to the assignees, within a period of five years from the resolution date for a maximum nominal amount of € 75,000,000;
• the granting of powers to the Board of Directors, pursuant to article 2420-ter of the Italian Civil Code, to issue, on one or more occasions, bonds convertible into shares, for a maximum nominal amount of € 250,000,000, including, pursuant to article 2420-ter, par. 1, of the Italian Civil Code, the powers to correspondingly increase the share capital to service the conversion by issuing ordinary shares with the same characteristics as outstanding shares, for a maximum nominal amount of € 250,000,000, within a period of five years from the resolution date;
• the granting of powers to the Board of Directors, in accordance with art. 2443 of the Italian Civil Code, to make a divisible increase in the share capital against payment, on one or more occasions, within a period of five years from the resolution date, excluding pre-emptive rights in accordance with art. 2441, par. 4, second sentence, of the Italian Civil Code, by issuing ordinary shares up to 10% of the total amount of shares forming the share capital of Arnoldo Mondadori Editore at the date of any exercise of the powers and, in any case, for a nominal amount of up to € 20,000,000.

The proposed renewal and granting of powers is motivated by the expediency to maintain and grant the Board of Directors the general powers to implement, through faster and more streamlined procedures than the resolutions adopted by the Extraordinary Shareholders’ Meeting, any capital transactions to strengthen the financial structure in support of the Group’s development targets.
With particular regard to the powers that may be exercised for capital increases with the exclusion of pre-emptive rights up to a ceiling of 10% of the existing capital, mention should be made that the offer made to third parties may represent an effective tool to increase the free float and maintain appropriate liquidity of the share at any moment, or be functional to the participation of qualified investors in the share capital, while curbing the diluting effects for existing shareholders.

For further information on the proposed revocation and granting of powers pursuant to articles 2443 and 2420 ter of the Italian Civil Code, reference should be made to the Directors’ Explanatory Report, which will be published within the time limits and in the manner prescribed by applicable regulations.

IFRS 16 (LEASES)
The Mondadori Group will apply IFRS 16 (Leases) as from 1 January 2019. The new standard introduces a different system for recognizing leases for the lessee in the financial statements.
The main impacts on the Group’s consolidated financial statements are estimated as follows:

• Balance sheet at 1 January 2019: recording of fixed assets and financial liabilities for approximately € 112 million;
• Consolidated income statement in 2019: as a result of the agreements in place at 1 January 2019, the consolidated income statement for 2019 is forecast to see an improvement in EBITDA of approximately € 16.4 million, an increase in amortization and depreciation of approximately € 15.1 million and an increase in financial expense of approximately € 2.5 million.
  The combination of the straight-line depreciation of “user rights on the asset” and the actual interest rate method applied to financial payables under IFRS 16 results in higher expense charged to the income statement in the opening years of the lease contract and lower expense in the final years.

CONSOLIDATED NON-FINANCIAL STATEMENT PURSUANT TO LEGISLATIVE DECREE 254/2016
Under Legislative Decree 254/2016, the Board of Directors’ 2018 Report on Operations of the Mondadori Group is also composed of the Consolidated Non-Financial Statement, a qualitative-quantitative description of the non-financial performance of the Company, associated with environmental, social, and staff-related issues, as well as those regarding respect for human rights, and the fight against active and passive corruption, which are relevant given the activities and characteristics of the Company.
With regard to 2018, the Mondadori Group has updated its materiality analysis, in accordance with the principles set out by the GRI Sustainability Reporting Standards (GRI Standards), including the “Media Sector Disclosures”, defined in 2016 and 2014 respectively by the Global Reporting Initiative (GRI).
A new process was introduced with three main new features: the involvement of independent experts in the media and publishing segments; a comparison with the main European peers; an extension of the level of engagement towards the outside, involving suppliers of the main utilities and franchisees of the Mondadori Store bookstores.

The 2018 results, approved on today’s date by the Board of Directors, will be presented by the Mondadori Group Management to the financial community today, at 4 PM, at the Mondadori Megastore in piazza Duomo, Milan.

The corresponding documentation will be made available on 1Info (www.1info.it), www.borsaitaliana.it and www.gruppomondadori.it (Investors).

The Financial Reporting Manager – Oddone Pozzi – hereby declares, pursuant to art. 154 bis, par. 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 pdf file):

• Consolidated balance sheet;
• Consolidated income statement;
• Consolidated income statement – fourth quarter;
• Group cash flow;
• Arnoldo Mondadori Editore S.p.A. balance sheet;
• Arnoldo Mondadori Editore S.p.A. income statement;
• Arnoldo Mondadori Editore S.p.A. cash flow statement;
• Glossary of terms and alternative performance measures used.

[1] Net of the effects of the outsourcing of logistics activities.
[2] In 2018, the “Adjusted result from discontinued operations” included the net result of Mondadori France in the current year, together with the recognition of the fair value adjustment of assets being sold, to reflect the negotiations in progress, previously measured at value in use. This item also includes the financial expense held by the Parent Company, but attributable to Mondadori France and charged to the latter under the intercompany loan agreement (approximately € 3 million). The “Adjusted result from continuing operations” and the “Adjusted result from discontinued operations” therefore differ by this amount from the amounts of the statements attached to this Report (equal to € -192.4 million in 2018 and € 12.6 million in 2017), prepared in accordance with IFRS international accounting standards.
To enable a like-for-like comparison, 2017 figures have been restated accordingly.
[3] Before application of IFRS 16
[4] Source: GFK, December 2018 (in terms of value)
[5] Source: ESAIE, 2018 (adopted sections)
[6] Source: Databank, 2018
[7] Source: Comscore, December 2018
[8] Source: Mondadori France + Presstalis, December 2018 (in terms of value)
[9] Source: Net Index, December 2018 (in terms of value)
[10] Source: Kantar Media, December 2018 (in terms of volume)

Following today’s meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, the Chief Executive Officer of the Mondadori Group, Ernesto Mauri, signed a put option, whereby Arnoldo Mondadori Editore S.p.A. has guaranteed itself the right to sell its subsidiary Mondadori France S.A.S. to Reworld Media S.A..

The disposal plan is part of the Mondadori Group’s repositioning strategy to place greater focus on the Books Area, and involves 100% of the stake held by Arnoldo Mondadori Editore S.p.A. in Mondadori France S.a.S. and the relating investments (revenue of € 330 million and EBITDA of € 18.4 million recorded in 2017).

The value for Mondadori France has been set at € 70 million (cash free/debt free), plus an earn-out of € 5 million.

Under the terms for exercising the put option:

• 86% of the value of the investment – € 60 million – will be paid in cash, € 50 million of which at the closing date and € 10 million 24 months from the closing date; the deferred payment is not subject to any condition;
• the remaining 14% of the value of Mondadori France S.A.S., for a nominal value of € 10 million, will be paid through issue of new Reworld Media S.A. shares, to be subscribed by Arnoldo Mondadori Editore S.p.A. at a price equal to 112.5% of the average stock market price over the 20 days before the signing and, in any case, ranging from a floor of € 2.2 to a cap of € 2.9.

Following the subscription, Arnoldo Mondadori Editore S.p.A. would hold from an 8% to a 10% interest in the share capital of Reworld Media S.A..

The transaction envisages a price adjustment mechanism linked to the achievement of pre-established targets relating to 2018 adjusted EBITDA and normalized net working capital at the closing date.

The earn-out to Arnoldo Mondadori Editore S.p.A. will be subject to the achievement in 2020, by Reworld Media S.A. in the new set-up, of certain financial results.

Under the terms for exercising the put option, Arnoldo Mondadori Editore S.p.A. is also required to provide the buyer with the usual representations and warranties.

If the deal is finalized, the Mondadori Group’s net financial position is expected to improve by approximately € 58 million at the closing date, considering: financial payables to third parties in Mondadori France (approximately € 7 million); fair value adjustment of Reworld Media shares subscribed by Arnoldo Mondadori Editore S.p.A. at closing (approximately € 3 million calculated to date); transaction costs of € 2 million.

In the financial statements for the year ended 31.12.2018, the result from discontinued operations, including impairment, is expected to be basically in line with the amount recorded in the Interim Management Statement at 30.09.2018.

Pursuant to the provisions of law, Mondadori France S.a.S. will start negotiations with its union representatives.

If the put option is exercised, the parties will sign a purchase and sale agreement envisaging completion of the transaction if the following conditions precedent are met:

• authorization issued by the Autorité de la Concurrence;
• approval of a reserved capital increase by the shareholders of Reworld Media;
• disbursement of a bank loan to Reworld Media.

Arnoldo Mondadori Editore S.p.A. today announced, as per Art. 2.6.2 of the regulations governing markets organised and managed by Borsa Italiana S.p.A., the corporate events scheduled for 2019:

• Thursday 14 March 2019: meeting of the Board of Directors for the approval of the Annual Report for the year ended 31 December 2018;
• Wednesday 15 May 2019: meeting of the Board of Directors for the approval of the Interim Management Statement at 31 March 2019;
• Tuesday 30 July 2019: meeting of the Board of Directors for the approval of the Half-Year Report at 30 June 2019;
• Wednesday 13 November 2019: meeting of the Board of Directors for the approval of the Interim Management Statement at 30 September 2019.

The Annual General Meeting of the Shareholders for the approval of the Annual Report for the year ended 31 December 2018 will be held on first calling on Wednesday 17 April 2019.

Presentations to the financial community of the results for the full year at 31 December 2018, the Half-Year Report at 30 June 2019 and the Interim Management Statements at 31 March and at 30 September 2019 will be held on the dates, as indicated above, of the respective meetings of the Board of Directors.

Any changes will be promptly communicated to the market.

Mention should be made that Arnoldo Mondadori Editore S.p.A., as a company listed on the STAR segment of Borsa Italiana, will publish the Interim Management Statements at 31 March 2019 and at 30 September 2019 – pursuant to art. 2.2.3, par. 3, of the Borsa Italiana Regulations – within 45 days after the end of the first, third and fourth quarters of the year (with exemption from the publication of the interim report on the fourth quarter if the annual financial report, together with the other documents referred to in art. 154 – ter, par. 1, of the Finance Consolidation Act, is made available within 90 days after year end). The Interim Management Statements will be made available, in accordance with current regulations, at the Company’s registered office, on the Company’s website www.gruppomondadori.it (Investors section), and through the authorized storage mechanism (www.1info.it), together with the relating press releases.

Arnoldo Mondadori Editore S.p.A. (LEI Code 815600049A1F9AFE6666) announces the purchase on the MTA (Electronic Stock Market), in the period from 10 to 14 December 2018, of no. 4,003 ordinary shares (equal to 0.002% of the share capital) at an average unit price of Euro 1.4471 for a total amount of Euro 5,792.74.

These transactions were made under the authorization to purchase treasury shares approved by the Shareholders’ Meeting on 24 April 2018 (previously disclosed pursuant also to art. 144 bis of Consob Regulation 11971/99 and to art. 132 of Legislative Decree 58/98).

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

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

Following the purchases made so far, Arnoldo Mondadori Editore S.p.A. holds no. 1,346,703 treasury shares, equal to 0.515% of the share capital.

Purchases in detail in the complete pdf.

Arnoldo Mondadori Editore S.p.A. (LEI Code 815600049A1F9AFE6666) announces the purchase on the MTA (Electronic Stock Market), in the period from 3 to 7 December 2018, of no. 15,000 ordinary shares (equal to 0.006% of the share capital) at an average unit price of Euro 1.4898 for a total amount of Euro 22,347.60.

These transactions were made under the authorization to purchase treasury shares approved by the Shareholders’ Meeting on 24 April 2018 (previously disclosed pursuant also to art. 144 bis of Consob Regulation 11971/99 and to art. 132 of Legislative Decree 58/98).

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

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

Following the purchases made so far, Arnoldo Mondadori Editore S.p.A. holds no. 1,342,700 treasury shares, equal to 0.514% of the share capital.

Purchases in detail in the complete pdf.

Arnoldo Mondadori Editore S.p.A. (LEI Code 815600049A1F9AFE6666) announces the purchase on the MTA (Electronic Stock Market), in the period from 26 to 30 November 2018, of no. 15,000 ordinary shares (equal to 0.006% of the share capital) at an average unit price of Euro 1.4298 for a total amount of Euro 21,446.25.

These transactions were made under the authorization to purchase treasury shares approved by the Shareholders’ Meeting on 24 April 2018 (previously disclosed pursuant also to art. 144 bis of Consob Regulation 11971/99 and to art. 132 of Legislative Decree 58/98).

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

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

Following the purchases made so far, Arnoldo Mondadori Editore S.p.A. holds no. 1,327,700 treasury shares, equal to 0.508% of the share capital.

Purchases in detail in the complete pdf.