12072 n796 a 2

Il Sole 24 ORE

This document has been prepared by UBS Limited

Case study

NEITHER THIS DOCUMENT NOR ANY PART OR COPY OF THIS DOCUMENT MAY BE DISTRIBUTED DIRECTLY OR INDIRECTLY IN THE UNITED STATESOR IN CANADA, JAPAN OR AUSTRALIA

2

NEITHER THIS DOCUMENT NOR ANY PART OR COPY OF THIS DOCUMENT MAY BE DISTRIBUTED DIRECTLY OR INDIRECTLY IN THE UNITED STATESOR IN CANADA, JAPAN OR AUSTRALIA.

THIS DOCUMENT HAS BEEN PREPARED BY ITS AUTHORS INDEPENDENTLY OF IL SOLE 24 ORE S.P.A. (THE "COMPANY"), , MEDIOBANCA - BANCA DI CREDITO FINANZIARIO S.P.A. ("MEDIOBANCA"), AND UBS LIMITED ("UBS") OR ANY OTHER MEMBER OF THE UNDERWRITING GROUP OR ANY OF THEIR RESPECTIVE AFFILIATES IN THE PROPOSED OFFERING (THE "OFFERING") OF PREFERRED SHARES (AZIONI DI CATEGORIA SPECIALE) OF THE COMPANY. UBS LTD, WHO MAY ACT IN CONNECTION WITH THE OFFERING, HAS NO AUTHORITY WHATSOEVER TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OR WARRANTY ON BEHALF OF THE COMPANY, MEDIOBANCA, UBS, ANY OTHER MEMBER OF THE UNDERWRITING GROUP OR ANY OF THEIR RESPECTIVE AFFILIATES IN CONNECTION WITH THE OFFERING OR OTHERWISE. IN PARTICULAR, THE OPINIONS AND PROJECTIONS EXPRESSED HEREIN ARE ENTIRELY THOSE OF UBS LTD AS PART OF ITS NORMAL RESEARCH ACTIVITY AND NOT AS A MANAGER OR UNDERWRITER OF ANY OFFER OR AS AN AGENT OF, OR FINANCIAL ADVISER, TO THE COMPANY, MEDIOBANCA, UBS, ANY OTHER MEMBER OF THE UNDERWRITING GROUP OR ANY OF THEIR RESPECTIVE AFFILIATES OR ANY OTHER PERSON.

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Table of contents

SECTION 1 The Company

5

SECTION 2 Market Outlook

12

SECTION 3 Group Strategy

16

SECTION 4 Forecasts

20

SECTION 5 Valuation

25

4


Il Sole 24 ORE—Story in a nutshell

A great Italian brand in Consumer & Financial Publishing and Professional Publishing, with highly valuable readership

Earnings outlook 2006–10E: Top line CAGR 6% (o/w organic 3%) EBITDA CAGR 13% (o/w 8% organic) Net adj. profit CAGR 23%

Favorable momentum, as a few actions recently taken and the Group reorganization are bringing benefits from 2007

Rationale of the offer (100% primary): funding external growth (mostly Italy, Professional Publishing). Float will be 26–30%, listed special shares will have2% ownership limit

Valuation—UBSe value range is €687–782 million (pre-money equity), i.e. a post-money mkt cap of €1.0–1.1 billion, corresponding 08E EV/EBITDA of 8.6–9.9x , P/E of 21–24x, EFCF yield of 5.2–5.9%

The key driver in the post-money scenario will be the timing and details ofre-investment. Recent track record in M&A (€85m invested in 2006–07E) is reassuring: avg EV/EBITDA paid was 8.2x

5


Shareholders and planned offer

Major shareholder is Confindustria (Italian Industry Confederation)

Listed shares will be “special shares” with 2% ownership limit

Float will be 26–30% (depending on over-allotment)

Offer will be 100% primary (UBSe est. proceeds €310–350 million)

Number of share Pre-Offer Offered sharesNumber of shares Post-Offer

(and greenshoe)

m. shares Ordinary Sh. Special Sh. % Ordinary Sh. Special sh. Ordinary sh. Special sh. %

Confindustria 1 90.0 _ 91.6 _ – 90.0 _ 67.5

Il Sole 24 ORE 2 – 8.2 8.4 – – – 8.2 (3.0) 6.2 (2.3)

Market 2 – – – – 35.1 – 35.1(40.3) 26.3 (30.2)

Total 98.2 100.0 35.1 133.3 100.0

Source: UBS estimates

Notes:1 Confindustria only holds ordinary shares 2 All Shares held by Il Sole 24 ORE and the market following the Global Offering are special

shares

SECTION 1

The Company

NEITHER THIS DOCUMENT NOR ANY PART OR COPY OF THIS DOCUMENT MAY BE DISTRIBUTED DIRECTLY OR INDIRECTLY IN THE UNITED STATES OR IN CANADA, JAPAN OR AUSTRALIA

7


The businessesTwo core divisions, a strong captive adv arm, two minor businessesConsumer & Financial Publishing

The leading Italian financial daily(346k copies / day)

Add-ons, magazines, free press: all launched in the last two years

EBIT margin at 10–11%

Advertising (“System”)

Focused on the Group products, third parties are marginal (mostly web adv)

Key top line / margin driver, after reorganization of H1 07

Professional Publishing

Main product line is Tax & Legal

A few acquisitions in 2006–07

EBIT margins at 16% and growing

Key growth area for future acquisitions

Radio & Multimedia

Radio listeners and adv revenues in strong acceleration, no margin yet

Multimedia is two-fold: a) Real time financial info service under pressure;b) On line adv and e-commerce ok but marginal. Division with no margins

8


Contribution by division in perspective

Consumer & Financial Publishing includes:

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2005 2006 2007E 2008E 2009E 2010E

Consumer & financial publishing Professional publishing Sy stem (adv ertising) Radio Multimedia other

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100

2005 2006 2007E 2008E 2009E 2010E

Consumer & fin. publishing Professional publishing others Corporates & intragroup adj.

Two core divisions, a strong captive adv arm, two minor businesses Revenues (€m)

EBITDA (€m)


Product Titles Launch FrequencyRevenues

2007E (€m)Newspaper Il Sole 24 ORE

(and related inserts)1965 Daily 216

Add-ons Books, CDs 2005 Irregular (spot or collections)

63

Magazines Ventiquattro 2001 Monthly 8

English 24 2006 Monthly

Nova 24 Review 2006 Bi-monthly

I Viaggi del sole 2006 Monthly

House 24 2007 QuarterlyFree press 24 Minuti End-

2006Daily (Milan and Rome)

8

The Professional Publishing will represent more than half of group margin by 2008E



(€m) 2006 2007E 2008E 2009E 2010E

Tax & legal 86 90 92 94 96

Business Media 36 69 83 84 85

Software solution 16 28 43 45 48

Education/training 8 8 8 8 8

Total 147 195 227 232 238

o/w subs./circ. 133 156 176 181 186

o/w advertising 13 40 50 51 51

9


Consumer & Financial Publishing

Strong B2B components (Fiscal & legal contents, working tool)

Resilient & loyal readership (48% of circulation is subscriptions via mail or at newstand)

Scale benefits being the largest financial title in one country

Sizeable synergies with Professional Publishing

Highly valuable / not fully exploited readership (based on avg income and education)

Unexploited growth potential from

– niche to be covered with specific inserts, magazines

– higher cover price (the only financial daily priced as generalists)

Cost cutting program

Different from most of others, generalist and financial ones

6% 9%

48%

0%

25%

50%

Il Sole24 ORE

othersItaly

FT (UK)

-5050

150250350

Il So

le 24

ORE

Hand

elsbla

tt

FT (U

K)

Les

Echo

s

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

1999 2000 2001 2002 2003 2004 2005 2006 2007E 2008E 2009E 2010E

FT Les Echos WSJ

Il Sole 24 ORE avg 2007-10E EBIT margin 10.7%

Subscriptions/total circ. Total circ. (000s copies/day) EBIT margin of key peers


10


Professional Publishing

Organic growth: Professional Publishing is a “real growth” segment outside Italy

The growing segment of the industry

Margin upside: divisional margins still below leading-large-scale-EU players

M&A potential and benefits: external growth should accelerate and bring scale benefits, synergies are “visible”

-4%

-2%

0%

2%

4%

6%

8%

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

E20

08E

2009

E20

10E

Reed Elsev ier Legal WK European Legal Thomson Legal

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

2005

2006

2007E

2008E

2009E

2010E

Il Sole 24 ORE

Av g peers

Material room for consolidation

Company war chest is €200–250 millionpre-offer and >€600 million post offer

Organic growth key peers

EBIT margin of Il Sole 24 ORE vs. avg key peers



11


Radio

The Group radio (Radio 24) has been a great success story (unique format News & Talk) and post re-launch of 2006, listeners are up 18% (H1 07) vs. 2005

The advertising revenues (up 15% in H1 07) are “monetizing” the higher listener level

Target of listener is very consistent with the other Group’s products: some further upside on adv rates, supported by “premium” listeners

Low music component is a “defensive” element

but

Further upside in penetration of daily listeners is limited (c. 2 million vs.current 1.85 million), but will be supported by improving population coverage

Margin potential is limited, being a one channel radio: long term 10% EBITDA vs. c. 50% for Edit. L’Espresso. Today EBITDA-EBITA break-even, while EBIT affected by high amortization of radio frequencies (equal to 75% of revenues)

A great commercial success with limited earnings upside

12


Multimedia

Real time financial information—leadership with Italian retail banks but strong price pressure (Borsa Italiana is key data supplier and competitor)

On-line advertising and e-commerce—The www.ilsole24ore.com website is first (43% reach) in the Financial News & Information segment and third (10% reach) in the overall News & Information segment. Revenues come from advertising and from fees on e-commerce (mostly of Group’s products)

News agency—now integrated with free-press

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10

20

30

40

50

2005 2006 2007E 2008E 2009E 2010E

Real time financial info On line New s agency (Radiocor) other

Multimedia division revenues (€m)—mix changing towards online


A transforming division

1

2

3

http://www.ilsole24ore.com/

SECTION 2

Market Outlook


14


Market Outlook

Saturation of the FTA TV share—a positive for publishers

Add-on products: a shrinking market—a negative for most publishers

Still room for freesheets

0%

20%

40%

60%

80%

100%

TV printed Radio Cinema & Outdoor Internet

0

50

100

150

200

250

2002 2003 2004 2005 2006 2007E 2008E 2009E 2010E

MONDADORI RCS Media GroupEdit. L'Espresso Il Sole 24 ORE

The Italian advertising market


The add-on products revenues: key players

Freesheet titles circulation

(000s copies/day) 2006E24MInuti 400City 860Leggo 1,118Metro 860total 3,238E-Polis, CdS Anteprima 1,075

Three trends to outline in Italy:

15


Newspaper market

Mkt size (2006)Recent growth (2004–

06 CAGR)Outlook (2006–09E CAGR /

2007 / 06 y / y) Competitors

Newspaper €3.6bn +1.3% +0%/+0.8% RCS MediaGroup, Edit L’Espresso

Newspaper €2.8bn +1.3% +1% / +2.2% RCS Media Group, Edit L’ Espresso, Caltagirone Ed, Class Ed

– Circulation €1.2bn +0.6% +0% / +0% –

– Advertising €1.6bn +1.9% +1.7% / +3.8% –

Add-ons €475m (all circ) -3% -10% / -11% RCS Media Group, Edit, L’ Espresso, Il Giornale

Magazines €230m (all adv) +5.3% +4.5% / +5% RCS Media Group, Edit L’ Espresso, La Stampa

Freesheet €80m (all adv) +17.7% +9% / +10% Metro, Caltagirone Ed, RCS Media Group, E-Polis

Financial titles should have ‘easier life’

Il Sole 24 ORE is expected to outperform the newspaper market

5,000

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9,000

11,000

13,000

15,000

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

200250300350400450500550600

UK market Financial Times (rhs)

50,000

52,000

54,000

56,000

58,000

60,000

62,000

64,000

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

1,500

1,600

1,700

1,800

1,900

2,000

US total US WSJ (rhs)

…and to be more ‘defensive’ than generalist titles

Outlook of the Italian newspaper market

FT circulation vs. UK market (000s copies)

WSJ circulation vs. US market (000s copies)

Source: UBS estimates, Company data

Source: UBS estimates, UPA, Nielsen

16


Professional PublishingTwo thirds of newspaper mkt, but room for consolidation

Mkt size (2006)Recent growth

(2004–06 CAGR)Outlook

(2006–09E CAGR) Competitors

Professional publishing €2.3bn +1.8% +2% Wolters Kluwer, Giuffre’, Maggioli

Tax and legal €570m +3% +3% Wolters Kluwer, Giuffre’, Maggioli

Business media (technical) €400m (incl adv) +0% +0% Reed Elsevier, Tecniche Nuove

Software (relevant segments) €1bn +1% +2% Zucchetti, Wolters Kluwer, Team System

Education €380m +4.5% +2.5% SDA Bocconi

Outlook of the Italian professional publishing market

Source: UBS estimates, UPA, Nielsen

Organic growth of key intl peers vs. Italian mkt and Il Soler 24 ORE

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1997

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2004

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2006

2007

E20

08E

2009

E20

10E

Reed Elsev ier Legal WK European Legal Thomson Legal Il Sole 24 ORE

Italian mkt


Tax & Legal and software the fast growing segments, with material consolidation scope

Our assumptions of growth are below those of international peers

SECTION 3

Group Strategy


18


Recent EventsShifted gear: a few actions are fuelling earnings growth

Reorganization of the advertising division (“System”) in H1 2007

Cost cutting program launched in H2 2006

New product launched in the Consumer & Financial Publishing over 2006–07: add-ons, four magazines, the freesheet, new inserts

Acquisitions in the Professional Publishing division (€85 million invested in last 18 million)

Completion of a sizeable capex plan (full colour available since H2 06, last “leg” planned in 2008)

H1 2007 results offer evidence of early results: +12% top line (+8% organic), +16% EBITDA (+14% organic)

The rationale of the planned offer (100% primary) is funding external growth (mostly Italy, Professional Publishing)

19


Track record in M&AThe multiples paid so far are not demanding

Timing Target Stake Equity valueNet debt

(cash) EVImpact net

debtEV /

EBITDA (x)2006

revenues2006

EBITDA

Feb-06 El Economista 15% 22 nm 22 3 nm 2 0

Oct-06 Motta Architettura 100% 4 0 4 4 13.5 2 0

Dec-06 Motta Arti Grafiche 57% 4 0 4 2 37.5 2 0

Mar-07 GPP 100% 40 6 47 47 8.6 42 5

Jul-07 Data Ufficio 100% 8 4 12 12 6.5 13 2

Jul-07 Blogosfere 30% 3 nm 3 1 nm 0 0

Aug-07 STR 100% 16 (3) 13 13 6.7 10 2

Total YTD Only controlling stakes 82 8.2 71 10

Q4 07 (E) Alinari 55% 3 0 3 2 nm 0 0

Q4 07 Diamante 30% 5 nm 5 1 nm 1 0

Total committed 85 72 10

Deals announced in 2006–07: avg EV / EBITDA paid is 8.2x

Source: Company data, UBS estimates. All in €m if not stated

20


Use of proceeds—Re-investment scenariosIl Sole 24 ORE valuation (offer proceeds)

Bottom of UBS range (€308m)

Top of UBS range(€351m)

Multiple of target companies (EV / EBITDA) 8x 10x 8x 10x50% proceeds re-invested (€m)Proceeds re-invested 154 154 175 175EV 781 781 898 898Equity 994 994 1,133 1,133Net cash (debt) 194 194 216 216Net debt / EBITDA nm nm nm nmEBITDA (2008E) 92 88 95 90Net profit (2008E) 45 43 47 45EFCF 53 51 55 52EV / EBITDA (x) 8.5 8.9 9.5 9.9PE (x) 22.1 23.1 24.3 25.4EFCF yield 5.3% 5.1% 4.8% 4.6%100% proceeds re-invested (€m)Proceeds re-invested 308 308 351 351EV 935 935 1,073 1,073Equity 994 994 1,133 1,133Net cash (debt) 40 40 40 40Net debt / EBITDA nm nm nm nmEBITDA (2008E) 111 104 117 108Net profit (2008E) 51 48 54 50EFCF (2008E) 59 56 62 58EV / EBITDA (x) 8.4 9.0 9.2 9.9PE (x) 19.4 20.9 21.0 22.8EFCF yield 6.0% 5.6% 5.5% 5.1%Re-leverage scenario (1x net debt / EBITDA)EV 1,060 1,048 1,197 1,184Equity 994 994 1,133 1,133Net cash (debt) (127) (115) (135) (122)Net debt / EBITDA 1.0 1.0 1.0 1.0EBITDA (2008E) 128 119 134 124Net profit (2008E) 55 51 58 53EFCF (2008E) 63 59 66 61EV / EBITDA (x) 8.3 8.8 8.9 9.5PE (x) 18.1 19.5 19.6 21.3EFCF yield 6.3% 5.9% 5.8% 5.4%Re-leverage scenario (2x net debt / EBITDA)EV 1,227 1,204 1,372 1,346Equity 994 994 1,133 1,133Net cash (debt) (294) (271) (310) (283)Net debt / EBITDA 2.0 2.0 2.0 2.0EBITDA (2008E) 145 135 152 140Net profit (2008E) 59 54 62 57EFCF (2008E) 67 62 70 65EV / EBITDA (x) 8.5 8.9 9.0 11.2PE (x) 16.9 18.3 18.4 19.9EFCF yield 6.7% 6.3% 6.2% 5.7%

Re-investment will bea key driver of thepost-money scenario

We see room for a materialscale-up of the business, with positive impact on rating


SECTION 4

Forecasts (pre-money)


22


Key driversThe key drivers and risk factors of top line and margins

Division Growth drivers Visibility issues (+ / -) Potential risksConsumer and financialpublishing:

- Newspaper Cover price gap to “generalists” + Higher than peers’ subscription revenuesWeakening advertising from financial services segment

Advertising re-positioning + High “professional” readershipIncreasing competition from smaller players (Italia Oggi)

Full colour impact Circulation and readership weakness

Cost cutting plan

Product innovation (inserts)

- Magazines / free press “Young” titles (mostly launched in 2006–07) - New entrants in il sole 24 ore niches

Free press launched in November 2006, gaining momentum

- Saturation of the add-on segment

Launch cost decreasing

Advertising upside from new titles and free press

Free press due to break-even in 2009 / 10E

Professional publishing: Organic growth above consumer publishing + More resilient than consumer publishers M&A

Impact of acquisitions+ Smoother tradition to new media

(web, electronic)

Scale effect

Synergies from integration of new businesses

Radio: Growing listeners - Cost inflation Shortage of frequencies

Premium listeners to be fully “monetized”

Multimedia:

- online Strong online advertising

- financial info services Price pressure - Increasing competition Consolidation of clients

Advertising: See above plus web-based adv exposure


23


Revenues2006–10E CAGR is +6%, o / w 3% organic

(€m) 2004 2005 2006 2007E 2008E 2009E 2010E

Consumer & fin. publishing 212 243 268 295 301 305 308

% change 14.8% 10.2% 10.0% 2.1% 1.3% 1.1%

Professional publishing 142 144 147 195 227 232 238

% change 1.4% 2.0% 33.2% 16.1% 2.4% 2.4%

System (advertising) 179 180 183 203 216 226 236

% change 0.4% 1.4% 11.0% 6.7% 4.8% 4.4%

Radio 11 11 12 14 15 16 16

% change 0.4% 9.7% 12.9% 7.0% 4.0% 5.0%

Multimedia 52 47 43 40 40 41 43

% change (9.3)% (9.2)% (6.3)% (1.3)% 2.8% 6.2%

Total gross 596 625 652 746 798 819 842

% change 4.9% 4.3% 14.5% 6.9% 2.7% 2.7%

Corporates & intra-group adj. -137 (139) (141) (163) (173) (181) (189)

% change 1.4% 1.6% 14.9% 6.6% 4.6% 4.2%

Total group 458 486 511 584 625 638 653

% change 6.0% 5.1% 14.3% 7.0% 2.1% 2.3%


24


Costs

Labour is the largest single cost item

Reducing cost of launches of magazines and freesheet


(€m) 2004 2005 2006 2007E 2008E 2009E 2010E

Raw materials 35 33 34 56 56 56 57

% revenues 7.6% 6.8% 6.6% 9.7% 9.0% 8.8% 8.8%

o / w paper 30 27 28 51 50 50 51

% revenues 6.4% 5.6% 5.5% 8.7% 8.0% 7.8% 7.8%

Costs of services 214 234 249 280 293 297 303

% revenues 46.7% 48.2% 48.7% 47.9% 46.9% 46.5% 46.5%

o / w printing & distr. 59 72 73 75 78 78 80

% revenues 12.9% 14.8% 14.3% 12.9% 12.5% 12.3% 12.3%

Contributions & others 11 14 9 12 9 9 9

% revenues 2.4% 2.8% 1.7% 2.0% 1.4% 1.4% 1.4%

Other operating costs 46 51 52 51 52 52 53

% revenues 10.1% 10.5% 10.1% 8.8% 8.4% 8.2% 8.1%

Cost of labour 122 134 135 143 159 163 167

% revenues 26.6% 27.6% 26.5% 24.5% 25.4% 25.6% 25.6%

25


Financials

Tax rate is very high, as business is concentrated in Italy and labour cost is very high (i.e. high IRAP)

We expect it to fall to c. 48% overtime, due to benefits of recent fiscal changes and changing business mix

Capex will ease from this year. We assume the last “leg” of one off investments in 2008E (€14 million for full colour project and radio frequencies)

FCF is expected to grow from €18 million of 2007E to €45 million in 2009E and €48 million in 2010E

FCF growing by 2.6x in three years

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54 57 60

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FCF from operations capex FCF pre div .

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Il Sole 24 ORE

Espresso

av g peers



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2004

2006

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High tax rate vs. peers (2007E)

Tax rate, 2004–10E

Group capex and FCF outlook

SECTION 5

Valuation


27


Stock positioningA balanced positioning between plus and minus

Earnings growth at top of industry

Business visible and resilient

Unexploited growth options (adv, new products, cover prices)

No currency exposure

Trophy asset

Unfavorable tax-rate rel. to peers

Lack of M&A appeal in S / M term

2% ownership limit

Rigid cost structure

Plus Minus

Italian publishers (affected by relatively high tax rates) trades at premium on P / Es and small discount on EV / multiples

DMGT example suggests that limited voting rights do not necessarily hit the stock rating

28


Peers

Need to select appropriate peers

Given the group positioning and asset quality we compare it to best in class

Key peer group includes Pearson, Wolters, Reed, Espresso

Price Mkt cap EV / EBITDA EV / EBITA P / E (adj.) EFCF yield

(local) (€m) 2008E 2009E 2008E 2009E 2008E 2009E 2008E 2009E

Reed Elsevier plc 601 19,570 11.3 10.2 13.2 11.9 15.5 13.7 5.7% 6.3%

Wolters-Kluwer 21.7 6,406 9.6 8.6 10.9 9.66 13.4 12.2 7.5% 8.3%

Avg selected prof. publishers 10.4 9.4 12.0 10.8 14.5 12.9 6.6% 7.3%

Professional publishers 10.0 9.0 11.1 10.0 15.7 12.9 6.9% 7.6%

L'Espresso 3.5 1,525 7.7 7.2 9.5 8.8 16.7 16.0 5.8% 6.1%

Pearson 765 8,801 9.5 8.3 11.0 9.5 15.8 13.9 7.6% 8.8%

Avg selected consumer publ. 8.7 7.9 10.4 9.2 16.3 15.0 6.7% 7.5%

Consumer publishers 9.2 7.8 10.6 8.6 13.1 11.8 9.8% 11.4%


29


EV Multiples – SOTP Outcome is equity value at €751–729 million (pre-money)

(€m) EBITDA Multiple EBITA MultipleEV (driven byEV / EBITDA)

EV (driven byEV / EBITA)

Consumer & financial publishing 37.6 8.7x 31.1 10.4x 327 323

Professional publishing 42.8 10.4x 42.5 12.0x 447 509

Total core divisions 80.4 9.6x 73.6 11.3x 774 833

Radio 1 0.7 nm 0.0 nm 67 75

Multimedia 0.8 5.0x 0.1 7.0 4 1

% of group

Total divisions 81.9 9.5x 73.7 11.3x 778 833

Corporate costs (9.1) 9.5x (14.5) 11.3x (86) (164)

Total group EV 72.9 9.5x 59.3 11.3x 692 669

Net cash (debt) as of December 2008E 40 40

Peripheral assets 2 19 19

Equity (pre-money) 751 729


SOTP based on mkt EV multiples

Notes:1 Radio is valued on the back of frequencies cost2 Mostly represented by the stakes in Borsa Italiana and Ecoprensa

30


P / E and DCFP / E suggests equity value of €687 million,DCF €737–782 million (pre-money)

Consumer publ. Professional publ. Weighted II Sole 24 ORE

2007E 2007E(15 consumer/

85 prof.)Adj. net profit

(2007E)EPS CAGR

(2007–10E) 2007E multiples Equity

P / E (UBS adj.) 16.7x 16.5x 16.4x €24.1m 17% 28.5x €687m

PEG 1 2.7x 1.5x 1.7x 1.7x


Equity value driven by peers’ P / E

Net debt / EV 0% 5% 10% 15%

WACC 8.45% 8.29% 8.17% 8.08%

PV of CF 2009–15E 232 233 234 235

Terminal value 445 463 477 488

Implied exit multiple (EV / EBITDA) 8.2x 8.4x 8.6x 8.8x

Entity value 677 696 711 722

Net cash (Dec. 2008E) 40 40 40 40

Peripheral assets 1 19 19 19 19

Equity value (pre-money) 737 755 770 782


DCF—key assumptions and outcomes (€m)

Notes:

1 Equal to 2007E P / E divided by 2006–09E adj. EPS CAGR. Target P / E and PEG are weighted on the basis of contribution to growth

Notes:

1 Mostly represented by the stakes in Borsa Italiana and in Ecoprensa

31


Valuation range (pre-money)

This implies 2008E EV / EBITDA of 8.6–9.9x, P / E 21–24x, EFCF yield 5.2–5.9%

Pre-money range is €687–782 million

(€m) EV Equity EV / EBITDA EV / EBITA P / E (adj.) EFCF yield

Methodology Drivers / assumptions pre-money pre-money 2008E 2009E 2008E 2009E 2008E 2009E 2008E 2009E

DCF 15% debt/EV; WACC 8.08% 722 782 9.9x 9.2x 12.2x 11.2x 24.2x 21.7x 5.2% 5.7%

Un-leveraged/WACC 8.45% 677 737 9.3x 8.6x 11.4x 10.5x 22.8x 20.4x 5.5% 6.0%

SOTP EV / EBITDA driven 692 751 9.5x 8.8x 11.7x 10.7x 23.2x 20.8x 5.4% 5.9%

EV / EBITA driven 669 729 9.2x 8.5x 11.3x 10.4x 22.5x 20.2x 5.5% 6.1%

P / E adj. to growth 2007E PEG at 1.7x 627 687 8.6x 8.0x 10.6x 9.7x 21.2x 19.0x 5.9% 6.5%


32


A break-up scenario

Break-up scenario based on recent deals suggests equity value above €1.1 billion

We do not consider this scenario as likely in the short-medium term

Another invaluable and overvalued “trophy”?

(€m) EBITDA Multiple EBITA MultipleEV (driven byEV / EBITDA)

EV (driven byEV / EBITA)

Consumer & financial publishing 37.6 15.6x 31.1 22.1x 588 689

Professional publishing 42.8 14.5x 42.5 16.2x 621 689

Radio 0.7 nm 0.0 nm 67 75

Multimedia 0.8 5.0x 0.1 7.0x 4 1

Total divisions 81.9 14.8x 73.7 18.7x 1,213 1,378

Corporate costs (9.1) 14.8x (14.5) 18.7x (134) (271)

Total Group EV 72.9 14.8x 59.3 18.7x 1,079 1,107

Net cash (debt) December 2008E 40 40

Peripheral assets 1 19 19

Equity (pre-money) 1,138 1,166

Asset Bidder Date Price EV / Sales (x) EV / EBITDA (x) EV / EBITA (x)

Dow Jones News Corp 2007 $5300m 2.4 15.0 21.5

De Agostini Wolters Kluwer 2005 c€250m 3.4 14.5 16.2

Les Echos LVMH 2007 c€240m 1.9 18.0 20.0

Recoletos Retos Cartera 2004 €941m 3.3 20.8 30.3

Recoletos RCS Mediagroup 2007 €1100m 3.6 13.9 24.9


Break-up value

Recent deals in the sector


Note:

1 Mostly represented by the stakes in Borsa Italiana and in Ecoprensa

33


The post-money scenario

Post-moneymultiples assumingno-reinvestment (30% of mkt cap is cash)

Post-moneymultiples assumingre-investment of all proceeds (still nore-leverage)

Re-investment assumptions are key for P / E and EFCF yield


Methodology Drivers / assumptions Post-moneypost-

money 2008E 2009E 2008E 2009E 2008E 2009E 2008E 2009E

DCF15% debt / EV;WACC 8.08%

1,073 1,133 9.6x 9.0x 11.4x 10.6x 21.9x 20.2x 5.3% 5.7%

un-leveraged /WACC 8.45%

1,008 1,067 9.2x 8.6x 10.9x 10.2x 21.1x 19.4x 5.5% 5.9%

SOTP EV / EBITDA driven 1,029 1,088 9.3x 8.7x 11.1x 10.3x 21.4x 19.7x 5.4% 5.8%

EV / EBITA driven 996 1,055 9.1x 8.6x 10.8x 10.1x 21.0x 19.3x 5.5% 6.0%

P / E adj. to growth

2007E PEG at 1.7x 935 994 8.7x 8.2x 10.4x 9.7x 20.2x 18.5x 5.8% 6.2%

Source: UBS estimates. Table assumes full exercise of over-allotment (greenshoe) and that 100% of proceeds are re-invested at

an average post synergy EV / EBITDA multiple of 9x. The 2008E EFCF is restated for €14 million one-off capital expenditures


Methodology Drivers / assumptionsPost-

moneypost-

money 2008E 2009E 2008E 2009E 2008E 2009E 2008E 2009E

DCF15% debt / EV;WACC 8.08%

722 1,133 9.9x 9.2x 12.2x 11.2x 28.8x 26.1x 4.2% 4.6%

un-leveraged /WACC 8.45%

677 1,067 9.3x 8.6x 11.4x 10.5x 27.4x 24.8x 4.4% 4.8%

SOTP EV / EBITDA driven 692 1,088 9.5x 8.8x 11.7x 10.7x 27.8x 25.2x 4.3% 4.7%

EV / EBITA driven 669 1,055 9.2x 8.5x 11.3x 10.4x 27.1x 24.6x 4.4% 4.8%

P / E adj.to growth

2007E PEG at 1.7x 627 994 8.6x 8.0x 10.6x 9.7x 25.8x 23.4x 4.7% 5.1%

Source: UBS estimates. Table assumes full exercise of over-allotment (greenshoe). The 2008E EFCF is restated for €14 millionone-off capital expenditures

34


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