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2/7/2020

Approval of the Financial Statements at 31 December 2019 of De Agostini S.p.A.

GROUP OPERATING PERFORMANCE BROADLY

IN LINE WITH THE PREVIOUS YEAR

 

IMPROVEMENT IN CONSOLIDATED NET FINANCIAL POSITION BY OVER 400 M€

 

DIVIDENDS FROM INVESTEES

TO HOLDING COMPANIES EQUAL TO 117 M

 

Novara, 2 July 2020. The Shareholders’ Meeting of De Agostini S.p.A., held under the chairmanship of Marco Drago, approved the Financial Statements at 31 December 2019 and reviewed the Consolidated Financial Statements at the same date, the latter prepared in accordance with IAS/IFRS International Accounting Standards.

 

In summary, at the consolidated level:

 

  • Net Revenues were equal to 4,627 M€ (million euros), up 3% compared to 2018, and Gross Operating Margin (EBITDA) amounted to 1,641 M€ (equal to 35% of Net Revenues, a slight improvement compared to 34% in 2018);
  • Ordinary EBIT was positive at 758 M€, broadly in line with 2018;
  • Group Net Result was positive at 19 M€;
  • Net Financial Position was -7,521 M€.

 

The Group Net Asset Value amounted to 2,355 M€, against Equity of 1,864 M€.

 

With regard to the Parent Company De Agostini S.p.A., the Net Result recorded in 2019 was a positive for 55.3 M€.

 

The Shareholders’ Meeting also:

  • resolved not to distribute dividends in a prudent response to the impact of Covid-19 on the economic scenario;
  • appointed the new Board of Directors, after expiration of the term of the previous Board of Directors. The new Board now has eleven members: Marco Drago – Chairman, Paolo Boroli, Pietro Boroli, Roberto Drago, Paolo Tacchini, Lorenzo Pellicioli – who were already members of the previous Board of Directors – and Andrea Boroli, Paolo Basilico, Mario Cesari, Marco Costaguta and Marco Sala, as new members.

 

The Company Board of Directors, which met after the Shareholders’ Meeting, appointed Pietro Boroli and Roberto Drago as Vice-Chairmen and Lorenzo Pellicioli as Chief Executive Officer (Group CEO).

  

* * *

 

Group performance by sector of activity is illustrated as follows.

 

Publishing Activities

At De Agostini Editore, work proceeded down the well-worn path of focusing its activities, leading to additional simplifications of the business portfolio, while launching important new development ventures, aimed partly at opening up new markets. In particular, this included the Betterly project, which is an innovative direct to consumer offer of subscription boxes.
The net result was positive overall for the second year in a row, due to the good results of the School Books unit and the contribution made by non-recurring items.
The Net Revenues of the activities in question totalled 288 M€ and EBITDA was positive for 18 M€, reflecting the continued phase-out of Direct Marketing and the performance of Partworks.

 

Media & Communication Activities

With regard to Banijay Group Holding, 2019 closed with an improvement in operating results compared to the previous year, confirming the good operating profitability.
The year was marked by the signing of agreements to acquire the EndemolShine Group. Upon completion of the acquisition, Banijay expects to more than double its own turnover, positioning itself as the unchallenged leader in Content production in Europe and as a key player even at the global level.
Banijay Group Holding reported Revenues of 1,004 M€, with EBITDA of over 150 M€.
The Grupo Planeta-De Agostini reported a more than positive change in training activities, together with steady results at Atresmedia, in spite of the difficult context faced by this company relating to advertising sales in Spain. It responded to the challenge with constant cost-cutting and the development of new lines of activities in digital advertising, production and distribution of content.
Atresmedia reported Revenues of 1,039 M€, with EBITDA of 184 M€. 

It should be noted that due to the accounting rules with which the De Agostini Group Consolidated Financial Statements are prepared, the indirect investments in Banijay Group Holding and Grupo Planeta-De Agostini/Atresmedia are recognised according to the equity method, without therefore including the operating figures on the respective lines of relevance.

 

Games and Services Activities

IGT closed 2019 with improved operating results, mainly due to the strong performance of Gaming product sales – both in North America and on other international markets – and of the Lottery segment, especially in Italy, market where results has been well maintained despite renewed regulatory and tax pressures.
Good results were also reported for the activities in North America (Lottery, Gaming and Sport Betting). In the Lottery segment, major contracts were renewed in Colorado, Minnesota, Kentucky and Oregon, complemented by the award of a new contract in Mississippi. At the international level, the joint venture where IGT is a 50% partner with Scientific Games was awarded a 15-year license to operate the instant win lottery in Brazil.
Moreover, driven by its good operating results and favourable capex trend, the company generated strong cash flow, which translated into an improvement in the Net Financial Position.
IGT achieved Net Revenues of 4,274 M€, with EBITDA of 1,603 M€.

 

Financial Assets

For DeA Capital the year 2019 was of great strategic importance for the expansion of its Alternative Asset Management Platform.
Activities on the international Real Estate market were launched, relying on the fully operational joint ventures set up in France and Spain, which were recently joined by a new joint venture in Poland with an important local partner. Moreover, two significant, growth-oriented acquisitions were made: one to expand the range of management activity in the promising NPL Management segment, and the other to enter the “multi-asset, multi-manager” Investment Solutions segment, increasingly central to the asset allocation choices of institutional investors.
DeA Capital recorded another positive year in terms of operating and financial results, with Assets Under Management growing to over 22 B€, a positive Group Net Result of 12.3 M€ and a positive Consolidated Net Financial Position of 105.6 M€. 

Finally, Assicurazioni Generali continues to achieve outstanding results through growth in all of its business lines while maintaining a solid capital position. This translates into strong dividend flows, which have been confirmed at this time.

 

* * *

 

After 2019 had ended, De Agostini S.p.A. activated a loan which it had requested from Credit Suisse. This was done as part of the program undertaken in 2018 to rebalance the De Agostini portfolio, with an approximately 9% stake in IGT as the underlying asset. The amount requested was equivalent to the present value of the stake in question measured at the Put Option Strike, i.e. the “Pre-Payment Amount”, for a cash-in of about 432 MUS$.
If De Agostini S.p.A. decided to close the transaction with the Physical Settlement of all four of the prescribed tranches – on a half-yearly basis, beginning in May 2022 – the loan obtained from Credit Suisse “would pay for itself” with the proceeds from the sale of the aforementioned IGT stake, together with the interest already prepaid beforehand. 

Specifically with regard to the macroeconomic scenario, COVID-19 spread globally after the end of 2019. The Group reacted promptly to it by taking all timely measures as necessary to protect both the health of its employees and the continuity of its business. It became clearer and clearer as the weeks passed that the system as a whole was being put to one of its hardest tests in years.
Notwithstanding this context, the De Agostini Group remains focused on the consolidation and development of its own activities, to overcome the acute phase of the crisis as well as possible and to be ready to seize the opportunities that might arise when it emerges from this crisis. 

 

* * *

 

After the De Agostini S.p.A. Shareholders' Meeting, was held the Ordinary Shareholders' Meeting of the Parent Company B&D Holding S.p.A. which:

  • approved the Financial Statements at 31 December 2019, closed with a profit of 31.6 M€ (compared to 19.0 M€ recorded in 2018);
  • resolved – for the previously mentioned reasons of prudence – not to distribute dividends;
  • appointed the new Board of Directors, as the term of the previous Board had expired. The Board of Directors now has seven members: Marco Drago – Chairman, Alberto Boroli, Marco Boroli, Roberto Drago, Lorenzo Pellicioli, Guido Corbetta and Alberto Toffoletto. 

 

* * *

 

Corporate reorganisation

A corporate reorganisation project was defined and implemented during 2019. It involved De Agostini S.p.A., B&D Holding S.p.A. and its wholly owned subsidiary, B&D Finance S.p.A., and aimed to:

 

  • bring together at De Agostini S.p.A. the shareholding management and investment activities carried out by B&D Holding S.p.A. and B&D Finance S.p.A.;
  • articulate the shareholding structure of B&D Holding S.p.A. and De Agostini S.p.A. according to the most appropriate methods agreed upon unanimously by the Shareholders.

 

In consequence of the reorganisation – which took force on 1 January 2020 – the shareholding of B&D Holding S.p.A. in De Agostini S.p.A. amounted to 65.3% of the latter's share capital (i.e. 61.2% when also considering the special category shares held by Investendo Due S.r.l.).

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