Annual report 2016

Summary of the consolidated financial statements.

In view of the negotiations for the sale of the subsidiary A.C. Milan underway as at 31 December 2016, which was completed after the year end, within the consolidation of the Fininvest Group, in accordance with IFRS 5 (“Non-current assets held for sale”), the business of the Milan Group was classified as a discontinued operation and has been shown as such in this report. This made it necessary to restate the comparative figures for the previous years, which, to make the presentation of the Group more significant, excluded A.C. Milan from the line-by-line consolidation, in the so-called pro forma financial statements.

Notes on the performance of the financial statements (EUR million)

The main items of the financial statements are summarised in the table below:

INCOME STATEMENT FIGURES 31.12.2015 31.12.2016 % Change
vs. 31.12.2015
REVENUES 4,736.3 5,050.8 6.6%
EBITDA 1,402.9 1,217.5 -13.2%
% of revenues 29.6% 24.1%
EBIT 225.6 (188.7) n.s.
% of revenues 4.8% -3.7%
Net profit/(loss) from continuing operations 208.5 (123.8) n.s.
% of revenues 4.4% -2.5%
Net profit/(loss) from discontinued operations (*) (93.9) (95.0) -1.1%
Group net profit/(loss) (0.1) (120.2) n.s.
% of revenues 0.0% -2.4%
BALANCE SHEET FIGURES 31.12.2015 31.12.2016 Change in amount
vs. 31.12.2015
Net invested capital 5,976.0 5,548.6 (427.4)
Shareholders' equity – Group and non-controlling interests 4,998.4 4,268.7 (729.7)
Financial position (surplus)/deficit 977.6 1,279.9 302.3
CASH FLOW STATEMENT FIGURES 31.12.2015 31.12.2016 Change in amount
vs. 31.12.2015
Financial surplus/(deficit) 324.9 (302.3) (627.2)
Investments 1,012.7 1,053.8 41.1
WORKFORCE 31.12.2015 31.12.2016 Change in number
vs. 31.12.2015
Workforce (number) 17,114 17,415 301

(*) Mainly includes the losses from the A.C. Milan operations


Revenues2016 Revenues

The consolidated revenues of the Fininvest Group for the year 2016 amounted to EUR 5,050.8 million, up 6.6% on EUR 4,736.3 million for 2015. On a like-for-like basis, namely not including the contribution of the revenues resulting from the consolidation of the Rizzoli Libri area and the radio broadcasting operations of the former Finelco, the growth was +1.8%. The Mediaset Group reported revenues of EUR 3,667.0 million, up 4.0% on the EUR 3,524.8 million for the previous year. Revenues of the Mondadori Group amounted to EUR 1,280.2 million, up by 11.8% on the EUR 1,145.4 million in 2015 (fall of 3% on a like-for-like basis).


NetResult2016 EBIT

EBIT was a negative EUR 188.7 million, compared to a positive amount of EUR 225.6 million in 2015. The year 2016 was heavily penalised by the significant impacts largely resulting from the expenses from the impairment write-downs and provisions carried out by Mediaset and made necessary due to the contractual default by Vivendi, with the consequent progressive deterioration of the main performance indicators in the Pay TV area, due to the impact on business operations during the interim management period, in addition to other non-recurring costs. The impact on the EBIT of these types of costs, write-downs and provisions amounted to a total of EUR 336.4 million; Excluding these expenses, EBIT was a positive amount of EUR 147.7 million, compared to a positive EBIT for 2015 of EUR 248.0 million, again without the impact of non-recurring expenses.


Net profit/(loss) from continuing operations

The net profit/(loss) from continuing operations was a loss of EUR 123.8 million compared to a profit of EUR 208.5 million for the previous year. The net profit/(loss) also included – in addition to the non-recurring expenses noted in relation to the EBIT – extraordinary finance expenses, amounting to EUR 41.7 million, relating to the entry into hedge agreements and the early termination of credit lines connected to the agreement with Vivendi. Profit/(loss) from equity investments shows a profit of EUR 129.9 million, compared to a profit of EUR 159.5 million for 2015 and mainly includes Fininvest’s share of the net profit of the Mediolanum Group, amounting to EUR 119.1 million (EUR 131.8 million as at 31 December 2015). Excluding the total amount of the non-recurring expenses, net of the related tax effects, the net profit/(loss) from continuing operations was a positive amount of EUR 162.0 million.


Group net profit/(loss)

The Group net profit/(loss) was a loss of EUR 120.2 million, compared to an essentially breakeven figure for the 2015 and included the net profit/(loss) from discontinued operations amounting to a cost of EUR 95.0 million (EUR -93.9 million for 2015), mainly consisting of the net profit/(loss) of the A.C. Milan operations, in addition to extraordinary expenses relating to the sale. The profit/(loss) attributable to non-controlling interests was a profit of EUR 98.6 million (EUR 114.7 million in 2015). Excluding all the non-recurring costs and expenses, as well as the net profit/(loss) of Milan Group for the second half of 2016, essentially recognised (upon the final sale of A.C. Milan which took place in early 2017) as the component of the sale price by the purchaser, the net profit/(loss) for the year 2016 was a positive amount of EUR 46.9 million.


NetFinancialPosition2016 Net Financial Position

The consolidated net financial position was a debt of EUR 1,279.9 million, compared to a debt of EUR 977.6 million as at 31 December 2015.

Financial Deficit

In 2016 there was therefore a financial deficit of EUR 302.3 million, compared to a financial surplus of EUR 324.9 million in 2015. In 2016 the Mediaset Group had a financial deficit of EUR 303.0 million and the Mondadori Group had a deficit of EUR 64.2 million. The Group Parent reported a financial deficit of EUR 140.8 million, which included the purchase of around 4.8% of the Mediaset shares for EUR 212.9 million offset by the receipt of the down payments for the sale of A.C. Milan of EUR 200.0 million (EUR 125.0 million net of capital contributions made). The deconsolidation of A.C. Milan’s debt (following the reclassification of that company to Assets/Liabilities held for sale) generated a financial surplus of EUR 188.5 million.


Investments2016 Investments

Investments for 2016 amounted to EUR 1,053.8 million (EUR 1,012.7 million as at 31 December 2015) and consisted of EUR 640.7 million for television and movie broadcasting rights (EUR 655.9 million in 2015), EUR 36.1 million of investments in intangible fixed assets (EUR 139.9 million in 2015), EUR 64.0 million of investments in tangible fixed assets (EUR 99.2 million as at 31 December 2015) and EUR 312.9 million equity investments, financial assets and business combinations, including Rizzoli, Banzai and the radio stations for the former Finelco (EUR 117.6 million in 2015). For more details, refer to the sections on the individual business segments.


Employees2016 Workforce

The workforce as at 31 December 2016 (including the agents in the sales networks and the workforce of the A.C. Milan area, a discontinued operation) totalled 17,415, up 301 compared to 31 December 2015. The consolidation of the operations acquired (Rizzoli libri, Banzai Media and the radio stations of the former Finelco) resulted in an increase of over 400 people at the end of 2016.

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