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Mediaset Group
Half Year Financial Report
at 30 June 2014
MEDIASET S.p.A. - via Paleocapa, 3 - 20121 Milan
Share Capital Euros 614,238,333.28 fully paid up
Tax Code, VAT number and inscription number in the
Milan Enterprises Register: 09032310154
Website: www.mediaset.it
INDEX
Corporate Bodies ..................................................................................................................................... 1
Financial Highlights ................................................................................................................................... 2
Foreword .................................................................................................................................... 3
Interim Report on Operations at 30 June 2014 ........................................................................ 3
Outstanding events and operations in the first half .................................................................................. 8
Performance by geographical area and business segment ..................................................................... 11
Financial results ...................................................................................................................................... 11
The Balance Sheet and Consolidated Financial Situations ...................................................................... 18
Group headcount ................................................................................................................................... 21
Related Parties transactions ................................................................................................................... 22
Opt-out of obligation for publication of information documents
in connection with significant operations ............................................................................................... 22
Significant events that took place after 30 June 2014 ............................................................................. 22
Risks and uncertainties for the remaining part of the financial year ....................................................... 24
Forecast for the year .............................................................................................................................. 25
Interim Consolidated Financial Statements ............................................................................ 27
Consolidated Accounting Tables ............................................................................................................ 28
Explanatory Notes .................................................................................................................................. 35
List of the Equity Investments in the
Consolidated Accounting Statemements at 30 June 2014 ..................................................... 55
Statement concerning the Condensed Half-Year Financial Statements
in compliance with Art. 154-bis of Italian Law Decree 58/98 ................................................. 57
Auditors’ review report on the interim condensed
consolidated financial statements .......................................................................................... 61
1
CORPORATE BODIES
Board of Directors Chairman
Fedele Confalonieri
Deputy Chairman
Pier Silvio Berlusconi
Chief Executive Officer
Giuliano Adreani
Directors
Marina Berlusconi
Pasquale Cannatelli
Paolo Andrea Colombo
Mauro Crippa
Bruno Ermolli
Marco Giordani
Alfredo Messina
Gina Nieri
Michele Perini
Niccolò Querci
Carlo Secchi
Attilio Ventura
Executive Committee Fedele Confalonieri
Pier Silvio Berlusconi
Giuliano Adreani
Gina Nieri
Risk and Control Committee Carlo Secchi (Chairman)
Alfredo Messina
Attilio Ventura
Compensation Committee Attilio Ventura (Chairman)
Paolo Andrea Colombo
Bruno Ermolli
Governance and
Appointments Committee Attilio Ventura (Chairman)
Paolo Andrea Colombo
Carlo Secchi
Committee of Independent Directors for
Related-Party Transactions Michele Perini (Chairman)
Carlo Secchi
Attilio Ventura
Board of Statutory Auditors Mauro Lonardo (Chairman)
Francesca Meneghel (Regular Auditor)
Ezio Maria Simonelli (Regular Auditor)
Massimo Gatto (Alternate Auditor)
Flavia Daunia Minutillo (Alternate Auditor)
Riccardo Perotta (Alternate Auditor)
Independent auditors Reconta Ernst & Young S.p.A.
2
MEDIASET GROUP: FINANCIAL HIGHLIGHTS
mio € % mio € % mio € %
3,414.7 100% Total net Revenues 1,724.8 100% 1,737.0 100%
2,588.5 75.8% Italy 1,257.4 72.9% 1,310.4 75.4%
826.8 24.2% Spain 468.0 27.1% 427.0 24.6%
246.3 100% EBIT 109.5 100% 133.6 100%
176.1 71.5% Italy 29.4 26.8% 86.4 64.7%
70.2 28.5% Spain 80.1 73.2% 47.2 35.3%
100.2 0.0% Profit before Tax and Minority Interest 8.4 0.0% 94.2 0.0%
8.9 0.0% Net Result (20.5) 0.0% 30.1 0.0%
mio € mio € mio €
4,436.7 - Net Invested Capital 4,281.0 - 4,554.4 -
2,977.7 - Total Net Shareholders' Equity 3,254.7 - 3,018.0 -
2,119.9 - Net Group shareholders' Equity 2,346.2 - 2,155.3 -
857.8 - Minorities Shareholders' Equity 908.5 - 862.7 -
(1,459.0) - Net Financial Position (1,026.4) - (1,536.4) -
1,139.3 - Operating Cash Flow 606.4 - 582.6 -
549.4 - Investiments 1,494.4 - 376.4 -
- - Dividens paid by the Parent Company - - - -
4.1 - Dividens paid by Subsidiares - - 4.1 -
% % %
5,693 100% Mediaset Group Personnel (headcount) 5,748 100% 5,828 100%
4,401 77.3% Italy 4,465 77.7% 4,497 77.2%
1,292 22.7% Spain 1,283 22.3% 1,331 22.8%
5,882 100% Mediaset Group Personnel (average) 5,734 100% 5,907 100%
4,574 77.8% Italy 4,449 77.6% 4,579 77.5%
1,308 22.2% Spain 1,285 22.4% 1,328 22.5%
7.2% - EBIT/Net Revenues 6.3% - 7.7% -
6.8% - Italy 2.3% - 6.6% -
8.5% - Spain 17.1% - 11.1% -
2.9% - EBT/Net Revenues 0.5% - 5.4% -
0.3% - Net Profit/Net Revenues -1.2% - 1.7% -
0.01 - EPS (euro per share) (0.02) - 0.03 -
0.01 - Diluted EPS (euro per share) (0.02) - 0.03 -
Main Balance Sheet and Financial Data
Main Income Statement Data
Personnel
1H 2014 1H 2013
1H 2014 1H 2013FY 2013
FY 2013 1H 2014 1H 2013
30st June 2014 30st June 201331st December 2013
Main Indicators
FY 2013
3
FOREWORD
This Interim Financial Report, prepared pursuant to Art. 154-ter of Legislative Decree no.
58/1998, includes the Report on Operations, the half-yearly condensed consolidated financial
statements and the Certification pursuant to Article 154-bis of Legislative Decree no. 58/98.
The half-yearly condensed consolidated financial statements are prepared in accordance with
International Accounting Standards (IAS/IFRS) applicable under the EC Regulation. 1606/2002 of
the European Parliament and of the Council dated 19 July 2002 and in particular IAS 34 -
Interim Financial Reporting, as well as the regulations issued to implement Article. 9 of
Legislative Decree no. N.38/2005.
The presentation of the reclassified consolidated financial statements and of the statutory
financial statements provided in the Interim Report on Operations corresponds to the
presentation adopted for the annual financial statements.
The notes have been prepared in accordance with the content prescribed by IAS 34 - Interim
Financial Reporting, also taking into account the provisions issued by Consob Communication
No. 6064293 dated 28 July 2006. As such, the information disclosed in this report is not
comparable to that of complete financial statements prepared in accordance with IAS 1.
INTERIM REPORT ON OPERATIONS AS AT 30 JUNE 2014
Group Highlights
Despite a more stable general scenario on the whole, domestic demand and consumer
spending were sluggish in Italy during the first half of the year, with a trend in advertising sales
that was still negative and fluctuating. In Spain, where the economic recovery is more marked,
advertising sales reported a very positive trend, also benefiting at the end of the reporting
period from the excellent contribution made in terms of audience numbers, due to Telecinco
broadcasting the best matches in the first round of the Brazil World Cup.
In this context, the Mediaset Group continued its focus of the last two years to consolidate
structural efficiency and generate cash, in addition to identifying major investments and
operations to streamline its asset portfolio, in accordance with a strategy targeted in particular
the pay TV business through the multi-platform development of content, while also maintaining
its financial solidity.
During the period, Mediaset acquired exclusive rights to broadcast Champions League matches
on pay TV and rights to broadcast main Serie A Championship matches on digital terrestrial TV,
for the 2015-2018 period, guaranteeing an exclusive content of national and international
football on Italian pay TV over the next few years, to consolidate the Mediaset Premium
industrial project, also with a view to expanding the pay TV business to international partners,
which began in July with the formalisation of the agreement whereby Telefonica acquired a
11.1% share of capital in the company in which these activities will be channelled.
At the end of the period, the subsidiary Mediaset España, faced with new scenarios on the
Spanish pay TV market, following an agreement whereby Telefonica will acquire control of
Digital Plus, finalised an agreement to sell its 22% investment in Digital Plus to Telefonica, thus
opening new scenarios to work together with one of the leading international
telecommunication groups in terms of technology, know how and content for pay TV.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
4
Key consolidated financial figures for the period are presented below; compared to the same
period of the previous year, these reflect a solid performance from EBITDA and a marked
reduction in consolidated financial debt compared to 31 December 2013.
Consolidated net revenues amounted to EUR 1,724.8 million, down on the EUR
1,737.0 million for 2013;
EBITDA amounted to EUR 668.3 million, up from the EUR 659.4 million recorded in
2013;
EBIT was equal to EUR 109.5 million, compared to EUR 133.6 million recorded in the
same period of the previous year. Operating profitability fell to 6.3% from the 7.7%
recorded in 2013;
Earnings from operating activities, before tax and minority interests amounted to
EUR 8.4 million compared to EUR 94.2 million as at 30 June 2013, of which EUR -47.4
million reflect the adjustment in the carrying amount of the investment in Digital Plus to the
price component unaffected by future events negotiated during the agreement to sell the
investment, effective as from 8 July 2014. The effect on consolidated net profit/(loss) for the
Group arising from this value adjustment was equal to EUR -12.3 million.
Net earnings of the Group amounted to EUR -20.5 million, compared to the EUR 30.1
million profit posted in the first quarter of 2013.
Consolidated net financial debt fell from EUR 1,459.0 million as at 31 December 2013
to EUR 1,026.4 million as at 30 June 2014 due to the effect of free cash flow EUR 165.2
million generated in and net proceeds of EUR 280.2 million arising from the offering on the
market of the 25% investment in EI Towers at the start of the second quarter.
Performance review by geographical area: Italy
In the first half of 2014 consolidated net revenues from the Group’s Italian operations
totalled EUR 1,257.4 million, compared to the EUR 1,310.4 million posted in the
corresponding period of the previous year.
In the first six months of the year, advertising revenues were still affected by conditions
on a market where there are still no clear signs of a sustainable recovery in domestic
demand and consumption. Against this backdrop, the sales strategy of the agency Publitalia
focused on safeguarding profitability, without resorting to the price cutting tactics of some
competitors, event to the detriment of its short-term market share. Gross advertising
revenues in the first half of the year for media licensed to the Group (free-to-air and pay
television channels and the relative share of sub-licensing on websites) fell by 3.9%,
although the figure suggests that the advertising market is slowly but progressively returning
to normal compared to previous quarters. In the first half of 2013 advertising revenues fell
by 17.5% year-on-year, while in the fourth quarter of 2013 they fell by 6.2%. According to
the latest figures released by Nielsen, in the first five months of the year, the advertising
market fell by -4.1% year-on-year.
Core revenues for Mediaset Premium from the sale of prepaid cards, recharges and easy
pay subscriptions and revenues from the "Infinity" on demand service amounted to EUR
274.3 million, compared to EUR 280.2 million in the first half of 2013.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
5
Revenues for EI Towers from external customers came to EUR 26.6 million, in line with
the 2013 figure;
Operating costs for the period (personnel expenses, costs for purchases, services and
other charges) fell slightly (-0.9%) compared to the same period of 2013, consolidating the
structural reduction in running costs achieved over the last two years through cost
efficiency measures.
Total EBIT from operations in Italy amounted to EUR 29.4 million, compared to EUR 86.4
million as at 30 June 2013. Operating profitability at the end of the reporting period came to
2.3%, compared to the 6.6% posted in 2013.
Total audience over the 24-hour period averaged 10,853,000 viewers in the first half of 2014.
Auditel statistics show that Mediaset networks as a whole, including both free-to-air and pay
television (Premium Calcio) channels broadcast over the digital terrestrial network, obtained an
audience share of 32.9% over the 24-hour period, 32.9% in the Day Time slot and 33.9% in
Prime Time.
The table below shows the breakdown of audience share by network for the reporting period.
(Source: Auditel)
The Group is the affirmed market leader with the commercial target audience for all three of its
general interest channels and as broadcaster in all three time slots. Notably, Canale 5 ranks in
top spot and Italia 1 in third spot in all time slots with the 15–64 year-old viewer target.
35.1 35.0
36.3
32.2 31.8
35.4
24 ore Day Time Prime Time
First Half 2014
% COMMERCIAL TARGET SHARE 15-64 years old
Mediaset RAI
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
6
Mediaset’s general interest channels held an audience share in the spring season of 27.4% over
the 24-hour period, 27.6% in the Day Time slot and 27.8% in Prime Time. Adding to the
Group’s digital channels, total audience share over the 24-hour period came to 33.8% of all
viewers, with a 33.8% share in the Day Time slot and 34.8% in Prime Time.
A positive contribution also came from the Multichannel Free and Pay networks, which added
more than six points of audience share for overall viewers and seven points for the commercial
target audience.
36.1 36.137.4
31.5 31.2
34.4
24 ore Day Time Prime Time
GUARANTEE PERIOD: SPRING 2014
(from 12/01 to 07/06)
% COMMERCIAL TARGET SHARE 15-64 years old
Mediaset RAI
The following tables show the hours broadcast by each Mediaset network in the first quarter of
the two years compared.
Mediaset Networks - Broadcasted programs D D%
Film 2,032 15.6% 2,141 16.4% (109) -5.1%
Tv Movie 435 3.3% 447 3.4% (12) -2.7%
Mini-series 208 1.6% 221 1.7% (13) -5.9%
Telefilm 2,540 19.5% 2,903 22.3% (363) -12.5%
Tv Romance 11 0.1% 12 0.1% (1) -8.3%
Sit-com 435 3.3% 261 2.0% 174 66.7%
Soap 129 1.0% 140 1.1% (11) -7.9%
Telenovelas 495 3.8% 283 2.2% 212 74.9%
Cartoons 72 0.6% 440 3.4% (368) -83.6%
Total TV Rights 6,357 48.8% 6,848 52.6% (491) -7.2%
News 1,473 11.3% 1,636 12.6% (163) -10.0%
Information programmes 1,369 10.5% 1,318 10.1% 51 3.9%
Sport programmes 313 2.4% 283 2.2% 30 10.6%
Event 109 0.8% 180 1.4% (71) -39.4%
Entertainment 2,620 20.1% 2,120 16.3% 500 23.6%
Culture 327 2.5% 188 1.4% 139 73.9%
Teleshopping 464 3.6% 455 3.5% 9 2.0%
Total in-house productions 6,675 51.2% 6,184 47.4% 491 7.9%
Total 13,032 100.0% 13,032 100.0% - 0.0%
1H 2014 1H 2013
Performance review by geographical area: Spain
Consolidated net revenues for Mediaset España Group at the end of the first half of 2014
amounted to EUR 468.0 million, increasing by 9.6% compared to the corresponding
period of the previous year.
Gross television advertising revenues amounted to EUR 446.5 million, up 6.8% year-on-
year. Mediaset España confirmed its leadership position on the TV advertising market, with
a 44.3% share, breaking away from its main competitor Atresmedia by 1.7%. According to
the latest figures released by Infoadex, total advertising investments on the Spanish market
went up by 2.7%, and the television advertising segment during the reporting period
increased 5.7% year-on-year.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
7
Total costs amounted to EUR 387.9 million, showing substantially no change year-on-year
thanks to the continuous policy of cost optimisation, and also considering that costs for
rights to broadcast main matches in the first round of the 2014 World Cup were recognised
in the period. Over the last four years, cost control measures have brought a cumulative
saving of EUR 123.5 million (-24.3%), without however affecting the quality of production.
As a result of the above performance EBIT came to EUR 80.1 million, compared to EUR
47.2 million in the same period of 2013, corresponding to an operating profitability of
17.1% compared to 11.0% in the first half of 2013.
Mediaset España Group’s free-to-air multichannel television offering at 30 June 2014
included Telecinco and Cuatro, as well as the thematic channels Factoría De Ficción, Boing,
Divinity and Energy. As reported in the section Significant events and transactions in the first
half of the year, following the Supreme Court ruling becoming effective as of 6 May 2014,
the channels La Siete and Nueve from the Mediaset España Group’s multichannel offering
were blacked out. In terms of audience figures, Mediaset España consolidated its leadership
position in the period. In particular, Mediaset España Group’s average audience share in
the first half of the year over the 24-hour segment was 30.2% of all viewers and 32.3% of
the commercial target audience.
In the first half of the year television consumption in Spain dropped by 6 minutes year-on-
year to 4.2 hours of viewing per day, with the average daily audience numbering more than
seven million viewers.
Mediaset España also consolidated its web leadership position during the period, in terms of
unique visitors and pages visited.
Reported below is the breakdown of audience share for Mediaset España Group’s general
interest channels and thematic channels.
(*) audience share for La Siete and Nueve channels included until 6th
May 2014
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
8
The table below shows the programming schedule for the two main networks, Telecinco and
Cuatro, for the reporting period, with comparative figures provided for the corresponding
period of the previous year.
Telecinco-Cuatro Schedule
Hours of broadcasted contentsD D%
Film 568 6.5% 544 6.3% 23 4.3%
TV Movies, Mini-series and Telefilm 1,537 17.7% 1,308 15.1% 229 17.5%
Cartoons - 0.0% 16 0.2% (16) -100.0%
Total TV Rights 2,105 24.2% 1,869 21.5% 236 12.6%
Quiz-game-show 1,219 14.0% 1,587 18.3% (367) -23.1%
Sport 204 2.3% 278 3.2% (74) -26.6%
Documentaries and others 3,504 40.3% 3,571 41.1% (67) -1.9%
News 1,224 14.1% 1,283 14.8% (59) -4.6%
Fiction 432 5.0% 101 1.2% 331 328.3%
Others - 0.0% - 0.0% - 0.0%
Total in-house productions 6,583 75.8% 6,819 78.5% (236) -3.5%
Total 8,688 100.0% 8,688 100.0% - 0.0%
1H 2014 1H 2013
Outstanding events and operations in the first half
As of 1 January 2014 the partial transfer of broadcasting assets from the subsidiary Towertel
S.p.A. to EI Towers S.p.A. took effect, as approved in 2013 by the companies’ respective
boards of directors.
On 1 January 2014 the transfer of the "commercial" business unit from Mondadori Pubblicità
S.p.A. to Mediamond S.p.A. took effect. This transaction – involving the transfer from the assets
and liabilities, from the personnel and from the contractual relationships relating to advertising
sales of printed magazines published by Arnoldo Mondadori Editore and third-party publishers
and on the R101 radio stations, and third party stations – has enabled the creation, within one
company, Mediamond S.p.A., of the most comprehensive integrated advertising sales house for
Magazines, Radio and Web in Italy.
On 10 February UEFA, at the end of a tender open to all operators, awarded Mediaset the
exclusive broadcasting rights for Italy on all platforms for all Champions League live matches and
highlights for the three-year period 2015-2016, 2016-2017, 2017-2018.
Mediaset will therefore have the exclusive rights for the live broadcast of all matches in pay TV
and for a game per round in freeview, in addition to the possibility of also broadcasting all
matches in delayed broadcast, highlights, and all goals viewable in the same evening, as well as
live streaming of the games on all fixed and mobile devices.
As of the forthcoming 2014–2015 Champions League season, the most important match of the
Wednesday round will be broadcast exclusively and free of charge in HD only on Mediaset
channels. Accordingly, it will not be visible on either the digital and satellite paid networks.
As of the following season and for three years until 2018, all the matches of the most important
football tournament in Europe, including the European Super Cup, will only be broadcast by
Mediaset, on the Group’s free-to-air and pay television networks and online services.
On 4 April 2014, Mediobanca–Banca di Credito Finanziario S.p.A., the sole bookrunner for the
transaction, brought to a successful close the placement of 7,065,600 EI Towers S.p.A. ordinary
shares, equal to 25% of the share capital. The shares are held by Elettronica Industriale S.p.A.,
an indirect wholly-owned subsidiary of Mediaset S.p.A..
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
9
The shares were offered through an accelerated bookbuild targeted at Italian and international
qualified investors. The offering was closed at a final price of EUR 40.15 per share, raising a
total of EUR 283.7 million.
At a consolidated level the transaction qualified as a sale of equity interests in a subsidiary,
without entailing a loss of control. As such, the transaction was recognised in accounts as
required by IAS/IFRS in force, as a transaction with the shareholders of the company.
Accordingly, the transaction has had no impact on Group performance in the income
statement. The difference between the net price received from the placement of the shares
and minority interests in the transaction at the transaction date, totalling EUR 248.8 million, net
of tax effects, was carried in a specific Group shareholders’ equity reserve.
From the second quarter of 2014 the full consolidation of the EI Towers group took place on
the basis of the equity interests resulting from the transaction, with 59.911% of the share
capital recognised as minority interests. Following the sale of that interest, the Mediaset Group
went from a situation of legal control to de fact control over EI Towers S.p.A. With effect from
the year 2014, EI Towers S.p.A. and its subsidiaries are no longer included in the national tax
consolidation and the centralised VAT scheme with Mediaset S.p.A. as the consolidating entity.
As of 6 May 2014, nine out of 24 Spanish digital terrestrial channels were blacked out in
implementation of the supreme court ruling of 27 November 2012, which repealed the
resolution adopted by cabinet on 16 May 2010 assigning each Spanish television broadcaster an
additional channel. Specifically, broadcasting was suspended on two of the eight channels
operated by Mediaset España (La Siete and Nueve), three of the eight channels operated by
Atresmedia Group (Xplora, La Sexta3 and Nitro), two of the four channels operated by VeoTV
Group and two of the four teleshopping channels operated by Net TV Group.
On 13 June, the subsidiary EI Towers S.p.A. signed a Term Sheet of agreements with Cairo
Network S.r.l., a wholly owned subsidiary of Cairo Communication S.p.A., for the development
and long-term full service management (hosting, service and maintenance, use of broadcasting
infrastructure), of a new television network, which will broadcast on a national frequency with
UHF technology, to cover 94% of the population when fully operational (as from 2018), aligned
with national Multiplexes offering greater coverage. The term of these agreements is 17 years
(2018-2034).Final agreements should be signed before 31 October.
The tender published in the Gazzetta Ufficiale of 12 February 2014 was finalised, with the
assignment, on 25 June, of rights to use one of the three frequency lots to the sole bidder
Cairo Network S.r.L.. Considering the above and the resulting competition scenario, also
following recent operations (three active operators with five multiplexes each and five
operators with one multiplex each), the broadcasting capacity market does not have any
significant barriers preventing access to independent publishers. Although the outcome of the
broadcasting capacity market analysis conducted by AGCOM has not been released, it may be
reasonably assumed that the Authority will reach the same conclusions, considering the
requirement for owners of several multiplexes to stop broadcasting capacity as an unnecessary
obligation.
Sufficient elements appear to exist for the European Commission to end infringement
proceedings which are still pending against Italy.
On 27 June 2014, as regards the tender published on 19 May 2014 for broadcasting rights of
the Serie A Championships for the 2015/2108 seasons, the Lega Nazionale Professionisti Serie
A (Serie A League) assigned R.T.I. S.p.A. licensing rights relative to Packages B and D of the
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
10
tender. On 26 June 2014, R.T.I. and Sky Italia S.r.l. signed an agreement for the exclusive sub-
licensing to SKY of rights to package D relative to 132 matches for each of the three seasons.
The validity of this agreement is subject to the League obtaining authorisation from relevant
authorities, as required by applicable laws. As stated in Subsequent events, AGCOM authorised
this agreement on 18 July 2014.
Mediaset Premium will broadcast live 248 matches of Italy's main eight teams, in addition to its
Live Premium service and highlights of all matches, for an average investment over the three
seasons of EUR 370 million. During the 2015 – 2018 period, Mediaset Premium will broadcast
the best of Serie A matches, as well as all Champions League matches, on an exclusive basis - on
all platforms.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
11
Performance by geographical area and business segment
In this section we give a breakdown of the consolidated income statement, balance sheet and
cash flows statement to show the contribution to Group performance of the two geographical
areas of business, Italy and Spain. For each geographical area, revenues and performance are
reported, broken down by business segment.
The presentation of the income statement, balance sheet and cash flows figures shown below
corresponds to the presentation adopted in the Report on Operations accompanying the annual
Consolidated Financial Statements. As such the figures are restated with respect to the financial
statements attached, in order to highlight the intermediate aggregates considered most
significant for understanding the performance of the Group and of the individual business units.
Although not required by law, the criteria adopted in preparing the aggregates and notes
referring the reader to the relevant statutory financial statement items have been disclosed in
accordance with guidance provided by Consob Communication 6064293 of 28 July 2006 and
the CESR Recommendation on alternative performance measures (or non-GAAP measures)
dated 3 November 2005 (CESR/05-178b).
The performance figures provided refer to progressive totals at the end of the first half of 2014
and 2013; balance sheet figures are stated at 30 June 2014 and at 31 December 2013.
Financial results
The consolidated income statement reported below shows the intermediate aggregates making
up earnings before interest, taxes, depreciation and amortisation (EBITDA) and earnings before
interest and taxes (EBIT).
EBITDA measures the difference between consolidated net revenues and operating costs, including
costs of a non-monetary nature relating to amortisation, depreciation and write-downs (net of any
impairment reversals) of current and non-current assets.
EBIT is measured by deducting from EBITDA costs of a non-monetary nature relating to
amortisation, depreciation and write-downs (net of any write-backs) of current and non-current
assets.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
12
(values in EUR million)
2014 2013 2014 2013
Total consolidated net revenues 1,724.8 1,737.0 904.0 905.3
Personnel expenses 276.0 273.3 137.3 132.4
Purchases, services, other costs 780.6 804.3 421.2 435.1
Operating costs 1,056.5 1,077.6 558.5 567.5
EBITDA 668.3 659.4 345.5 337.9
Rights amortisations 482.4 436.1 225.1 207.7
Other amortisations and depreciations 76.4 89.7 40.5 50.0
Amortisations and depreciations 558.8 525.8 265.6 257.6
EBIT 109.5 133.6 79.9 80.2
Financial income/(losses) (40.5) (30.7) (18.0) (16.9)
Income/(expenses) from equity investments (60.7) (8.7) (56.0) (6.3)
EBT 8.4 94.2 5.8 57.0
Income taxes (7.2) (40.8) (2.8) (23.1)
Net profit from continuing operations 1.1 53.4 3.0 33.9
Net profit from discontinued operations - - - -
Minority interests in net profit (21.7) (23.3) (11.1) (13.1)
Mediaset Group net profit (20.5) 30.1 (8.1) 20.8
Mediaset Group: Income Statement
2nd Quarter1H
The following table shows key Group income statement figures stated as a percentage of
consolidated net revenues.
2014 2013 2014 2013
Total consolidated net revenues 100.0% 100.0% 100.0% 100.0%
Operating costs 61.3% 62.0% 61.8% 62.7%
EBITDA 38.7% 38.0% 38.2% 37.3%
Amortisation, depreciation and write-downs 32.4% 30.3% 29.4% 28.5%
EBIT 6.3% 7.7% 8.8% 8.9%
EBT 0.5% 5.4% 0.6% 6.3%
Net profit -1.2% 1.7% -0.9% 2.3%
Tax rate (EBT %) -86.4% -43.3% -48.7% -40.6%
1H 2nd Quarter
Below we look at the breakdown of the income statement by geographical area to report the
contribution to performance of the Group’s Italian and Spanish operations.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
13
Breakdown by geographical area: Italy
The following is a condensed income statement of Mediaset Group’s domestic business:
(values in EUR million)
2014 2013 2014 2013
Total consolidated net revenues 1,257.4 1,310.4 636.5 675.0
Personnel expenses 223.8 221.8 111.0 106.0
Purchases, services, other costs 554.2 563.0 291.0 299.4
Operating costs 778.0 784.8 402.0 405.4
EBITDA 479.3 525.6 234.5 269.5
Rights amortisations 381.5 357.8 175.4 171.8
Other amortisations and depreciations 68.4 81.4 36.8 45.8
Amortisations and depreciations 449.9 439.2 212.1 217.7
EBIT 29.4 86.4 22.4 51.9
Financial income/(losses) (39.6) (29.7) (17.7) (16.3)
Income/(expenses) from equity investments (1.4) (0.8) (3.2) (1.0)
EBT (11.6) 55.8 1.5 34.6
Income taxes (8.4) (32.3) (7.0) (18.2)
Net profit from continuing operations (20.0) 23.5 (5.5) 16.4
Net profit from discontinued operations - - - -
Minority interests in net profit (9.3) (5.9) (6.1) (2.9)
Mediaset Group net profit (29.3) 17.6 (11.6) 13.4- - - -
Italy: Income Statement
2nd Quarter1H
The following table shows key income statement figures stated as a percentage of consolidated
net revenues.
2014 2013 2014 2013
Total consolidated net revenues 100.0% 100.0% 100.0% 100.0%
Operating costs 61.9% 59.9% 63.2% 60.1%
EBITDA 38.1% 40.1% 36.8% 39.9%
Amortisation, depreciation and write-downs 35.8% 33.5% 33.3% 32.3%
EBIT 2.3% 6.6% 3.5% 7.7%
EBT -0.9% 4.3% 0.2% 5.1%
Net profit -2.3% 1.3% -1.8% 2.0%
Tax rate (EBT %) 71.9% -57.9% n.s. -52.7%
1H 2nd Quarter
Below we report the performance of the Group’s Italian operations broken down by business
segment.
Integrated Television Operations, including free-to-air and pay television broadcasting
and accessory operations consisting of Web publishing, teleshopping, publishing,
licensing and merchandising, and film production and distribution.
EI Towers including hosting, maintenance and management operations in relation to
radio, television and wireless telecommunications networks run by the listed company
EI Towers S.p.A..
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
14
The two abridged statements that follow report revenues and EBIT for the business segments
identified.
Revenues
Business segments breakdown 2014 2013 2014 2013
Integrated Television Operations 1,230.8 1,283.9 -53.1 -4.1% 622.8 661.4 -38.7 -5.8%
EI Towers 116.7 116.4 0.3 0.2% 58.8 58.6 0.1 0.2%
Eliminations (90.1) (89.9) -0.2 -0.2% (45.0) (45.1) 0.1 0.1%
Total 1,257.4 1,310.4 -53.0 -4.0% 636.5 675.0 -38.5 -5.7%
changes % changes1H
% changeschanges2nd Quarter
Operating Result
Business segments breakdown 2014 2013 2014 2013
Integrated Television Operations (3.7) 56.6 -60.3 n.s. 5.4 36.3 -30.8 -85.0%
EI Towers 33.1 29.8 3.3 10.9% 17.0 15.6 1.4 8.8%
Total 29.4 86.4 -57.0 -66.0% 22.4 51.9 -29.5 -56.8%
changes % changes
1H% changes
2nd Quarterchanges
Reported below are the income statements for the two areas identified.
Integrated Television Operations 2014 2013 changes % changes 2014 2013 changes % changes
Gross advertising revenues 1,019.2 1,061.1 (41.9) -3.9% 526.7 559.3 (32.7) -5.8%
Agency discounts (148.8) (155.6) 6.8 4.4% (76.9) (82.1) 5.2 6.3%
Total net advertising revenues 870.4 905.5 (35.1) -3.9% 449.8 477.3 (27.5) -5.8%
Revenues from subscriptions/pre-paid cards 274.3 280.2 (5.9) -2.1% 131.5 135.7 (4.2) -3.1%
Other revenues 86.0 98.3 (12.3) -12.4% 41.5 48.5 (7.0) -14.4%
Total Revenues 1,230.8 1,283.9 (53.1) -4.1% 622.8 661.4 (38.6) -5.8%
Personnel expenses 200.8 199.6 1.2 0.6% 99.2 95.4 3.8 3.9%
Operating costs 516.4 522.5 (6.1) -1.2% 272.6 279.2 (6.6) -2.4%
TV and movie rights amortisation 381.5 357.8 23.7 6.6% 175.4 171.8 3.6 2.0%
Other amortisation and depreciation 47.3 59.1 (11.8) -20.0% 26.1 34.5 (8.4) -24.4%
Inter-segment costs 88.4 88.3 0.1 0.1% 44.2 44.2 (0.1) -0.2%
Total Costs 1,234.4 1,227.3 7.1 0.6% 617.4 625.2 (7.8) -1.2%
Operating result (3.7) 56.6 (60.3) n.s. 5.4 36.3 (30.8) -85.0%
% on revenues -0.3% 4.4% 0 0 0.9% 5.5% 0 0
1H 2nd Quarter
EBIT from television broadcasting in the reporting period was driven by lower advertising
revenues, as reported earlier. The drop in other revenues was almost entirely due to lower
proceeds from movie distribution operations which, compared to 2013, do not include the
transfer of the relative broadcasting rights to the pay television satellite platform.
The change in total costs was due to higher amortisation expense for pay television broadcasting
rights, which included a EUR 30.4 million decrease in impairment of the 2012 financial
statements. Excluding this component, the change in total costs was far lower compared to the
same period of the previous year, in relation to actions targeting an optimised editorial
content/advertising revenues ratio.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
15
(values in EUR million)
EI Towers 2014 2013 changes % changes 2014 2013 changes % changes
Revenues towards third parties 26.6 26.5 0.1 0.5% 13.7 13.5 0.2 1.2%
Inter-segment revenues 90.1 89.9 0.2 0.2% 45.0 45.1 (0.1) -0.1%- - - 0.0% - - - 0.0%
Total revenues 116.7 116.4 0.3 0.2% 58.8 58.6 0.1 0.2%
Personnel expenses 23.0 22.2 0.8 3.8% 11.8 10.6 1.2 11.5%
Operating Costs 37.8 40.5 (2.7) -6.8% 18.4 20.2 (1.8) -9.1%
Other amortisation and depreciation 21.1 22.3 (1.1) -5.2% 10.7 11.3 (0.7) -5.9%
Inter-segment costs 1.7 1.6 0.1 4.9% 0.9 0.8 - 3.3%
Total costs 83.6 86.5 (3.0) -3.4% 41.8 43.0 (1.3) -2.9%
Operating result 33.1 29.8 3.3 10.9% 17.0 15.6 1.4 8.8%
% on revenues 28.4% 25.6% 0 0 28.9% 26.6% 0 0
1H 2nd Quarter
Inter-segment revenues refer to hosting, assistance, maintenance and logistics services,
broadcasting infrastructure use and engineering services provided to the subsidiary Elettronica
Industriale. Revenues from other customers refer to hosting, maintenance and logistics services
provided to other broadcasters and wireless telecommunications providers.
During the period, EI Towers Group increased profit by EUR 3.3 million and operating
profitability by 28.4%, with a slight increase in revenues and a further optimisation of operating
costs.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
16
Breakdown by geographical area: Spain
The following is an abridged income statement of the Group’s Spanish business; figures are
those of Mediaset España Group (consolidated figures).
(values in EUR million)
2014 2013 2014 2013
Total consolidated net revenues 468.0 427.0 267.6 230.4
Personnel expenses 52.2 51.6 26.3 26.4
Purchases, services, other costs 226.9 241.7 130.4 135.7
Operating costs 279.0 293.2 156.7 162.1
EBITDA 189.0 133.8 110.9 68.3
Rights Amortisations 100.9 78.3 49.8 35.9
Others amortisations and depreciations 8.0 8.4 3.7 4.1
Amortisations and depreciations 108.9 86.6 53.5 40.0
EBIT 80.1 47.2 57.5 28.4
Financial income/(losses) (0.8) (1.0) (0.4) (0.6)
Income/(expenses) from equity investments (59.3) (7.8) (52.7) (5.4)
EBT 20.0 38.4 4.3 22.4
Income taxes 1.1 (8.5) 4.1 (4.9)
Net profit from continuing operations 21.1 29.8 8.5 17.5
Net profit from discontinued operations - - - -
Minority interests in net profit 0.3 0.3 0.1 0.1
Mediaset Group net profit 21.4 30.1 8.6 17.6
1H 2nd Quarter
Spain: Income Statement
The following table shows key income statement figures stated as a percentage of consolidated
net revenue from Spanish operations.
2014 2013 2014 2013
Total consolidated net revenues 100.0% 100.0% 100.0% 100.0%
Operating costs 59.6% 68.7% 58.6% 70.4%
EBITDA 40.4% 31.3% 41.4% 29.6%
Amortisation, depreciation and write-downs 23.3% 20.3% 20.0% 17.4%
EBIT 17.1% 11.0% 21.5% 12.3%
EBT 4.3% 9.0% 1.6% 9.7%
Net profit 4.6% 7.0% 3.2% 7.6%
Tax rate (EBT %) 5.7% -22.2% 95.2% -21.9%
Tax rate (EBT %)
1H 2nd Quarter
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
17
The breakdown of Mediaset España Group’s revenues is shown below:
(values in EUR million)
2014 2013
%
change
2014 2013 %change
Gross advertising revenues 446.5 418.2 6.8% 251.9 227.0 11.0%
Agency discounts (20.4) (24.9) 17.8% (9.7) (13.5) 28.4%
Net advertising revenues 426.1 393.3 8.3% 242.3 213.4 13.5%
Other revenues 41.9 33.7 24.4% 25.4 17.0 49.1%
Total net consolidated revenues 468.0 427.0 9.6% 267.6 230.4 16.1%
1H 2nd Quarter
The increase reported in item Other revenues mainly refers to revenues from the distribution
of movie co-productions and revenues from gambling and merchandising.
2014 2013 changes % changes 2014 2013 changes % changes
Operating costs 387.9 379.8 8.1 2.1% 210.2 202.1 8.1 4.0%
Personnel expenses 52.2 51.6 0.6 1.2% 26.3 26.4 -0.1 -0.4%
Purchases, services, other costs 226.9 241.7 -14.8 -6.1% 130.4 135.7 -5.3 -3.9%
TV and movie rights amortisation 100.9 78.3 22.6 28.9% 49.8 35.9 13.9 38.7%
Other amortisation and write-downs 8.0 8.4 -0.4 -4.8% 3.7 4.1 -0.4 -9.8%
1H 2nd Quarter
Total costs for the Mediaset España Group in the first half of 2014, thanks to concerted cost
optimisation policies, are in line with the figure for the first half of the previous year, bearing in
mind that in this period the costs related to the main matches of the first round of Brazil 2014
World Cup.
At 30 June 2014, EBIT from Spanish operations totalled EUR 80.1 million, up from EUR 47.2
million in the first half of 2013, with an operating profitability of 17.1%.
Other income statement components for Mediaset Group as a whole are shown below.
2014 2013 changes % changes 2014 2013 changes % changes
Financial income/(losses) -40.5 -30.7 -9.8 -31.9 -18.0 -16.9 -1.1 -6.6
1H 2nd Quarter
The higher net finance expenses, despite a lower average financial debt, were due to the higher
level of bonds as a proportion of total financial debt (two bonds were placed last year after the
end of the first quarter by the subsidiary EI Towers S.p.A. and by Mediaset S.p.A.) and the
consequent difference between the rate of return applied to bonds and the rate applied to bank
debt, as well as the costs resulting from the early termination of certain lines of credit.
2014 2013 changes % changes 2014 2013 changes % changes
Result from equity investments -60.7 -8.7 -52.0 n.s. -56.0 -6.3 -49.6 n.s.
1H 2nd Quarter
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
18
The item Income from equity investments is affected in the period by the negative effect of EUR -
47.4 million arising from the value adjustment of the equity investment held in Digital Plus to its
estimated realisable value, concerning the part of the negotiated price unconditioned on future
events, on the basis of the sale agreements with Telefonica S.A. signed early in July this year.
2014 2013 changes % changes 2014 2013 changes % changes
EBT 8.4 94.2 -85.9 -91.1 5.8 57.0 -51.1 -89.8
Income taxes -7.2 -40.8 33.6 82.3 -2.8 -23.1 20.3 87.7
Tax Rate (%) -86.4% -43.3% -48.7% -40.6%
Net profit from discontinued operations 0.0 0.0 0.0 n.s. 0.0 0.0 0.0 n.s.
Minority interests in net profit -21.7 -23.3 1.6 7.0 -11.1 -13.1 2.0 15.5
Group net profit -20.5 30.1 -50.6 n.s. -8.1 20.8 -28.8 n.s.
1H 2nd Quarter
Earnings for the reporting period are stated net of income taxes in accordance with the
recognition criteria set forth by IAS 34, applying the estimated income tax rate that will be
applied at year end.
Minority Interests refers to the share of consolidated net earnings of Mediaset España and EI
Towers attributable to third parties, on the basis of the interests held by the Group at the
respective reporting dates.
The Balance Sheet and Consolidated Financial Situations
The Group’s balance sheet and its breakdown by geographical area are reported below in
abridged form, restated to show the two main aggregates Net Invested Capital and Net
Financial Position; the latter consisting of Total Financial Debt, Cash and Other Cash Equivalents
and Other Financial Assets. Details of the items making up the net financial position are provided
in Note 4.8.
The following tables therefore differ in their layout from the statutory balance sheet, which
primarily distinguishes current from non-current assets and liabilities.
Equity investments and other financial assets include assets recognised in the Consolidated
statement of financial position as Investments in subsidiaries and other companies, and Other
financial assets (only as regards Investments and Non-current financial receivables) with the
exclusion of hedging derivatives, which are included as Net working capital and Other
assets/liabilities).
Net working capital and Other assets/liabilities include Current assets (apart from Cash and cash
equivalents and Current financial assets included in the Net financial position), Deferred tax assets
and liabilities, Non-current assets held for sale, Provisions for risks and charges, Trade payables and
Tax payable.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
19
(values in EUR million)
Balance Sheet Summary 30/06/2014 31/12/2013
TV and movie rights 2,828.3 1,830.3
Goodwill 916.0 912.4
Other tangible and intangible non current assets 1,160.1 1,218.9
Equity investments and other financial assets 82.5 469.7
Net working capital and other assets/(liabilities) (608.9) 97.9
Post-employment benefit plans (96.9) (92.5)
Net invested capital 4,281.0 4,436.7#RIF! #RIF!
Group shareholders' equity 2,346.2 2,119.9
Minority interests 908.5 857.8
Total Shareholders' equity 3,254.7 2,977.7#RIF! #RIF!
Net financial position 1,026.4 1,459.0
The breakdown of the balance sheet by geographical area (Italy and Spain) is shown below.
With reference to the Group’s Italian business, Equity Investments and Other Financial Assets
include the carrying amount of the controlling interest held in Mediaset España and the 25%
equity interest held in Mediacinco Cartera, a fully consolidated subsidiary of Mediaset España,
which owns the remaining 75% interest. These holdings are then netted and eliminated on
consolidation. The decrease in Equity investments and other financial assets refers to EUR
325.0 million reclassification of the value of the investment in Digital Plus under Non-current
assets held for sale in Net Working Capital.
(values in EUR million)
Balance Sheet Summary (geographical breakdown)
30/06/2014 31/12/2013 30/06/2014 31/12/2013
TV and movie rights 2,579.7 1,606.4 248.8 224.1
Goodwill 265.5 261.9 287.4 287.4
Other tangible and intangible non current assets 883.7 931.4 276.4 287.5
Equity investments and other financial assets 1,018.3 1,023.0 16.8 399.4
Net working capital and other assets/(liabilities) (1,081.4) (41.6) 472.5 139.5
Post-employment benefit plans (96.9) (92.5) - -
Net invested capital 3,568.9 3,688.6 1,301.9 1,337.9#RIF! #RIF! #RIF! #RIF!
Group shareholders' equity 2,316.7 2,099.5 1,442.6 1,419.1
Minority interests 73.2 36.6 12.0 12.2
Total Shareholders' equity 2,389.9 2,136.1 1,454.6 1,431.4#RIF! #RIF! #RIF! #RIF!
Net financial position 1,179.1 1,552.5 (152.7) (93.5)
Italy Spain
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
20
The table below shows the breakdown of the Group balance sheet as at 30 June 2013 to show
the effect of the line-by-line consolidation of Mediaset España.
(values in EUR million)
Balance Sheet Summary (geographical
breakdown)
Italy SpainEliminations/
Adjustments
Mediaset
Group
TV and movie rights 2,579.7 248.8 (0.2) 2,828.3
Goodwill 265.5 287.4 363.2 916.0
Other tangible and intangible non current assets 883.7 276.4 0.0 1,160.1
Equity investments and other financial assets 1,018.3 16.8 (952.7) 82.5
Net working capital and other assets/(liabilities) (1,081.4) 472.5 (0.0) (608.9)
Post-employment benefit plans (96.9) - - (96.9)
Net invested capital 3,568.9 1,301.9 (589.8) 4,281.00.0 0.0 0.0 0.0
Group shareholders' equity 2,316.7 1,442.6 (1,413.1) 2,346.2
Minority interests 73.2 12.0 823.4 908.5
Total Shareholders' equity 2,389.9 1,454.6 (589.8) 3,254.70.0 0.0 0.0 0.0
Net financial debt 1,179.1 (152.7) 0.0 1,026.4
The following table is an abridged cash flows statement broken down by geographical area,
showing cash flows over two periods. Items have been restated with respect to the standard
IAS 7 layout used to prepare the statutory cash flows statement in order to show changes in
Net Financial Position, considered the most significant indicator of the Group’s ability to meet
its financial obligations.
(values in EUR million)
Cash Flow Statement
from 1/1 to 30/6 2014 2013 2014 2013 2014 2013
Net Financial Position at the beginning of the year (1,459.0) (1,712.8) (1,552.5) (1,786.5) 93.5 73.7- - - - - -
Free Cash Flow 165.2 178.7 104.3 177.4 60.9 1.3
- Cash Flow from operating activities (*) 606.4 582.6 433.3 461.2 173.1 121.4
- Investments in fixed assets (1,494.4) (376.4) (1,371.0) (254.0) (123.5) (122.4)
- Disposals of fixed assets 0.0 42.6 0.0 42.4 0.0 0.2
- Changes in net working capital and other current assets/liabilities 1,053.2 (70.1) 1,042.0 (72.1) 11.2 2.1
- - - - - -
Change in the consolidation perimeter (3.3) - (3.3) - - -
Own share's sell/buyback - - - - - -
Equity investments/Invesment in other financial assets 268.2 0.2 271.8 0.5 (3.5) (0.3)- - - - - -
Cashed-in dividends 2.5 1.7 0.6 0.6 1.9 1.1- - - (113.6) - -
Dividends paid - (4.1) - (4.1) - -- - - - - -- - - - - -
Financial Surplus/Deficit 432.7 176.4 373.4 174.4 59.2 2.1- - - - - -
Net Financial Position at the end of the period (1,026.4) (1,536.4) (1,179.1) (1,612.1) 152.7 75.8
(*): Net profit +/- minority interests + amortisations +/- net provisions +/- valuation of investments recorded using the net equity method + changes
in valuation reserves - gains/losses on equity investments
Italy SpainMediaset Group
The Group’s free cash flow amounted to EUR 165.2 million. In particular, in Italy, free cash
flow amounted to 104.3 million compared to 177.4 in the first half of 2013. Cash flow in the
first half of the year compared to the corresponding period of the previous year was affected by
the change in advertising sales.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
21
The table below shows the increase of fixed assets reported in the cash flows statement.
Increase in fixed assets
from 1/1 to 30/6 2014 2013 2014 2013 2014 2013
Investments in TV and movie rights (1,480.4) (342.2) (1,354.9) (230.6) (125.6) (111.6)
Changes in advances on TV rights (1.4) (17.1) (6.3) (8.9) 4.8 (8.2)
TV and movie rights: investments and advances (1,481.8) (359.3) (1,361.1) (239.5) (120.7) (119.8)
Investments in other fixed assets (12.6) (17.1) (9.9) (14.5) (2.7) (2.6)
Total investments in fixed assets (1,494.4) (376.4) (1,371.0) (254.0) (123.5) (122.4)
Mediaset Group Italy Spain
The item Investments in television and movie broadcasting rights includes the value of rights
assigned to Mediaset for the 2015-2018 seasons of the Serie A Championships, amounting to
EUR 1,110.0 million, with a corresponding amount recognised in working capital.
Cash outflows of EUR 3.3 million carried under the item Change in consolidation area refer
to the acquisition on 28 February 2014 of the company Sart S.r.l. by the subsidiary Towertel
S.p.A. at a price of EUR 3.9 million, net of cash and cash equivalents held by the target company
at the acquisition date.
Equity investments/other financial assets for the first half of 2014 include proceeds arising
from the sale of 25% in the share capital of the subsidiary EI Towers S.p.A., of EUR 280.2
million, and EUR 5.0 million in costs incurred for the acquisition of a 1.8% equity interest in the
company Jade 1290 GMBH by the subsidiary RTI S.p.A., acquired via payment for new rights
issued and subscribed by the subsidiary as at 31 December 2013.
Group headcount
At 30 June 2014 the Mediaset Group headcount came to 5,748 employees (5,828 at 30 June
2013 and 5,693 at 31 December 2013). The increase compared to 31 December is exclusively
due to the higher number of employees on fixed-term contracts used in the Group's television
production operations in Italy.
The following tables show the change in the workforce for the reporting period, broken down
by employment grade for the two geographical areas of operation.
Number of employees (including temporary staff)
as at 30 June 2014 2013 2014 2013
Managers 302 307 115 120
Journalists 328 342 146 169
Middle managers 859 882 78 81
Office workers 2,908 2,920 921 938
Industry workers 68 46 23 23
Total 4,465 4,497 1,283 1,331
ITALY SPAIN
Average workforce (including temporary staff)
1H 2014 2013 2014 2013
Managers 303 313 115 119
Journalists 329 339 145 171
Middle managers 861 885 78 82
Office workers 2,910 2,985 924 933
Industry workers 46 57 23 23
Total 4,449 4,579 1,285 1,328- - 0 0
ITALY SPAIN
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
22
Related-party transactions
Transactions conducted with related parties do not qualify as “atypical” or “unusual”, and are
part of the normal course of business of the Group companies. Such transactions are conducted
at arm’s length, considering the nature of the goods and services provided. Detailed information
on the impact on Group performance, financial position and cash flow of transactions
conducted with holding companies, associates, joint ventures and affiliates is provided in Note
7, together with the disclosures required by the Consob Communication of 29 July 2006.
With reference to the significant transaction, in accordance with the Procedure for Related-
Party Transactions, undertaken between the indirect subsidiary Elettronica Industriale S.p.A.
and Mediobanca – Banca di Credito Finanziario S.p.A., a related party of Mediaset, please refer,
pursuant to Article 5.6 of Consob Regulation 17221 of 12 March 2010, to the Information
Document available on the Company's website in the section Governance – Related Parties and
on the website of Borsa Italiana S.p.A..
Opt-out of obligation for publication of information documents in connection with
significant operation
Pursuant to Article 3 of Consob Resolution no. 18079 of 20 January 2012, on 13 November
2012 the Board of Directors decided to apply the opt-out mechanism established in Article 70,
paragraph 8 and Article 71, paragraph 1-bis of Consob Regulation no. 11971/99, as amended,
thereby taking advantage of the right to opt-out of obligations to publish the reports required in
the event of significant transactions such as mergers, spin-offs, and share capital issues through
the transfer of assets in kind, acquisitions and disposals.
Significant events that took place after 30 June 2014
On 4 July, Mediaset España sold its 22% investment in Distribuidora de Televisión Digital S.A.
(Digital Plus-DTS) to Telefonica for EUR 325 million, of which EUR 295 million equivalent pro-
rata to the valuation recognised by Telefonica for 100% of DTS, in relation to the acquisition of
the controlling interest in Promotora de Informaciones S.A. (Prisa) and EUR 30 million relative
to the valuation of the waiver of the pre-emption right (due under shareholder agreements
entered into in 2010 with Digital Plus shareholders), following the acceptance of the binding
offer made by Telefonica S.A. for the acquisition of a controlling interest of 56% from Prisa.
The agreement also gives Mediaset España the right to collect an additional EUR 10 million if
Telefonica acquires the controlling interest in DTS from Prisa, a transaction which is subject to
authorisation from the relevant authorities, and up to a maximum of EUR 30 million, subject to
reaching established customer targets generated by DTS and Movistar TV over the next four
years.
As part of the agreement, commitments were also signed that will enable Mediaset España to
supply content for the Spanish pay TV market, on a non-exclusive basis.
On 4 July, the Board of Directors of Mediaset España also resolved to start the process to
evaluate different options to repurchase treasury shares for an amount equal to the sale of the
investment in DTS.
On 7 July, Mediaset and Telefonica signed an agreement for Telefonica to acquire 11.11% of
Mediaset Premium's assets for a total of EUR 100 million, which reflects an equity value of EUR
900 million, recognised 100%, of the company that will shortly be established and to which all
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
23
Mediaset pay TV activities will be transferred. The agreement does not change the operating
flexibility of the business and will not impact in any way the possibility to extend the partnership
to other potential industrial investors, while complying with minimum protection levels
normally afforded to minority shareholders in financial transactions. The transaction is
scheduled for completion by the end of the current year.
This transaction marks the start of a process to expand Mediaset Premium's capital on an
international level, with a view to developing its content production and distribution activities
on all pay platforms, laying the foundations for a partnership between Mediaset and Telefonica
for future joint pay TV operations, in terms of technology, know how and content.
On 8 July 2014, with reference to the “Mediatrade” trial (case 40382/05 RGNR), involving
Frank Agrama and Group directors and managers, the Court of Milan acquitted all persons
charged.
On 18 July, AGCOM, following the application from the Serie A League regarding the
agreement between RTI and Sky Italia, authorised the sub-licensing to Sky Italia of multiplatform
rights for 132 matches of the Serie A Championships for the 2015/2018 seasons of 12 minor
teams, originally assigned to RTI by the League on 26 June. The decision of the Authority is
subject to a prohibition on further sub-licensing the rights.
On 23 July 2014 EI Towers S.p.A. signed an agreement for the acquisition of Hightel S.p.A., a
company that manages a total of 216 sites mainly located in southern Italy, that host mobile
telephone and Wifi - WiMAX operators. The agreement is for the initial acquisition of 35% of
the share capital, through the payment of an advance amounting to EUR 5.0 million, and the
subsequent acquisition of the remaining 65% before 31 October. Overall, the operation is
subject to some conditions, including the successful outcome of the due diligence process now
underway.
On 24 July 2014 Mediaset España Comunicación, S.A. acquired 34,583,221 treasury shares
accounting for 8.5% of the share capital in Mediaset España from the company Promotora de
Informaciones S.A. (PRISA). The purchase price was EUR 8.892 per share, with a 2.5%
discount compared to the trading price (EUR 9.120) for a total of EUR 307.5 million.
On 23 July, the Board of Directors of Mediaset España resolved on the acquisition of treasury
shares (pursuant to the resolution passed by the Shareholders' Meeting on 9 April 2014)
approving the decision already taken by the Board on 4 July of a repurchase plan of treasury
shares in order to remunerate shareholders, following the sale of 22% of DTS Distribuidora de
Televisión Digital S.A..
As a result of this operation, Mediaset Group's share in Mediaset España (considering the float
of shares as at 30 June 2014) went up from 42.1% to 46.1%.
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
24
Risks and uncertainties for the remaining part of the financial year
The evolution of the macroeconomic context is still the main risk factor and uncertainty for the
Group's activities over the coming months. After seven years of crisis, the current economic
situation in the Eurozone is still marked by general stagnation. And it remains to be seen in the
coming months whether the newly-installed European Commission is capable of providing
effective stimuli for recovery, by strengthening the ECB’s recent anti-deflationary policies.
In Italy, the main indicators show that despite a greater degree of stabilisation – including in
domestic politics – expectations for growth in consumer spending and industrial output are still
likely to be weak over the coming months and therefore unable to stimulate a sustainable
reversal of the trend in the advertising market.
Another persistent uncertainty in Italy is the extreme commercial aggression of our main
competitors. In respons to this, the strategy of the group's internal advertising sales houses will
remain focused on defending profitability and developing the integrated multiplatform
commercial model, in an effort to maintain market share over the medium term by leveraging
the Group's established leadership in terms of audience share among the commercial target. In
this perspective, Mediaset’s autumn broadcasting offering will be significantly stronger than in
the first half of the year, having been further enhanced by the exclusive free-to-air rights to the
biggest game of the week involving Italian clubs in the forthcoming edition of the Champions
League.
In addition, the acquisitions during the first half of the year of the exclusive pay-TV rights for the
Champions League across all platforms and the DTT rights for the main clubs in Serie A over
the three-year period 2015-2018 – as well as the partnership agreement sealed in July between
Mediaset Premium and Telefonica – bring a significant reduction in the competitive and
strategic risk faced by Mediaset's Pay Business. The moves also strengthen its positioning and
the prospects for pursuing its business plan and expanding its ownership structure, against an
international background that even in the last few months has seen ever-increasing
concentration and vertical integration between telecoms and media players and the spread of
“over-the-top TV" business models.
In Spain, the consolidation of the recovery that began in the second half of 2013 should,
according to forecasts, bring GDP growth of 1% in 2014, mainly driven by domestic demand,
which should continue to favour growth in advertising expenditure over the coming months.
On the regulatory front, the implementation on 6 May of the Supreme Court ruling demanding
the closure of nine of the 24 Spanish digital terrestrial channels (including the Group's two
channels “Siete” and “La Nueve”) is having a substantially neutral effect on the Group’s
audience share and advertising revenues.
As usual, the consolidated annual results will be subject to impairment testing of goodwill and
other company assets; these measurement processes will be conducted in full when preparing
the draft financial statements as at December 31, when the information contained in the
updated multiannual plans of the respective Cash Generating Units will also be available. At the
date of this half year report, consideration of the main external and internal factors has not, in
any case, led to the revision of the measurements arising from the plans approved while
preparing the last consolidated financial statements.
A detailed analysis of the risks to which the Group is structurally exposed in performing its
activities – deriving both from external factors and from strategic decisions and internal
Half Year Financial Report at 30 June 2014 – Interim Report on Operations
25
operational risks – is provided in the dedicated section of the Directors’ Report on Operations to
the Consolidated Financial Statements at 31 December 2013, which may be referred to together
with the following Business Outlook section of this Report.
FORECAST FOR THE YEAR
Forecasts regarding trends in the Italian advertising market confirm that also in July the situation
is in line with the first half of the year. As we wait for more clear and decisive signals indicating a
recovery in internal demand and consumer spending, the poor visibility on advertising
expenditure makes it difficult to make predictions about the second half of the year.
On the other hand, in Spain, where the economic recovery is more advanced, advertising
revenues are expected to continue to improve also in the coming months, given the excellent
results that the matches of the World Cup in Brazil had in June and July on the sales of Mediaset
España.
In the second half of the year the Group's stake in Mediaset España, following the re-acquisition
of the 8.5% stake held by Prisa, will rise from 42.1% to 46.1% and will not include the share of
the profits of the stake held until 30 June of Digital Plus.
In conclusion, the general economic situation in Italy continues to make it difficult to make
reliable predictions about the consolidated results for the full year, a year in which the Group
will remain focused on the multiplatform development of its content, of the strategic evolution
of pay TV, as well as operating efficiency, cash generation and medium-term profitability,
leveraging the reduction in structural costs successfully implemented over the last two years.
for the Board of Directors
the Chairman
Mediaset Group
Interim Consolidated Financial Statements
at 30 June 2014
28
MEDIASET GROUP
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(EUR million)
Notes 30/6/2014 31/12/2013
ASSETS
Non current assets
Property, plant and equipment 4.1 498.6 533.6
Television and movie rights 4.1 2,828.3 1,830.3
Goodwill 4.1 916.0 912.4
Other intangible assets 4.1 661.5 685.3
Investments in associates 4.2 46.7 431.5
Other financial assets 4.2 37.6 38.3
Deferred tax assets4.3
557.6 538.7
TOTAL NON CURRENT ASSETS 5,546.4 4,970.1
Current assets
Inventories 37.8 41.8
Trade receivables 1,514.6 898.3
Tax receivables 56.1 66.3
Other receivables and current assets 243.2 311.1
Current financial assets 4.8 42.0 37.8
Cash and cash equivalents 4.8 206.4 197.6
TOTAL CURRENT ASSETS 2,100.1 1,552.9
Non current assets held for sale 325.0 -
TOTAL ASSETS 7,971.5 6,523.0
29
MEDIASET GROUP
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(EUR million)
Notes 30/6/2014 31/12/2013
LIABILITIES AND SHAREHOLDERS' EQUITY
Share capital and reserves
Share capital 614.2 614.2
Share premium reserve 275.2 275.2
Treasury shares (416.7) (416.7)
Other reserves 4.5 753.4 504.7
Valuation reserve 4.6 (17.3) (13.9)
Retained earnings 1,157.9 1,147.4
Net profit for the period (20.5) 8.9
Group Shareholders' Equity 2,346.2 2,119.9
Minority interests in net profit 21.7 13.9
Minority interests in share capital, reserves and retained earnings 886.8 843.9
Minority interests 908.5 857.8
TOTAL SHAREHOLDERS' EQUITY 3,254.7 2,977.7
Non current liabilities
Post-employment benefit plans 96.9 92.5
Deferred tax liabilities 4.3 64.4 66.1
Financial liabilities and payables 4.8 1,081.1 1,327.4
Provisions for non current risks and charges 4.7 67.7 65.4
TOTAL NON CURRENT LIABILITIES 1,310.1 1,551.4
Current liabilities
Financial payables 4.8 141.5 326.3
Trade and other payables 2,898.4 1,201.0
Provisions for current risks and charges 4.7 46.9 95.2
Current tax liabilities 20.9 17.7
Other financial liabilities 4.8 58.8 54.9
Other current liabilities 240.2 298.8
TOTAL CURRENT LIABILITIES 3,406.7 1,993.9
Liabilities related to non current assets held for sale - -
TOTAL LIABILITIES 4,716.8 3,545.3
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 7,971.5 6,523.0
30
MEDIASET GROUP
INTERIM CONSOLIDATED INCOME STATEMENT
(EUR million)
STATEMENT OF INCOMENotes
1H 2014 1H 2013
Sales of goods and services 1,705.8 1,712.4
Other revenues and income 19.1 24.5
TOTAL NET CONSOLIDATED REVENUES 1,724.8 1,737.0
Personnel expenses 276.0 273.3
Purchases, services, other costs 780.6 804.3
Amortisation, depreciation and write-downs 558.8 525.8
Impairment losses and reversal of impairment on fixed assets - -
TOTAL COSTS 1,615.3 1,603.4
EBIT 109.5 133.6
Financial expenses 4.9 (40.5) (30.7)
Income/(expenses) from equity investments (60.7) (8.7)
EBT 8.4 94.2
Income taxes 4.10 7.2 40.8
NET PROFIT FROM CONTINUING OPERATIONS 1.1 53.4
Net Gains/(Losses) from discontinued operations - -
NET PROFIT FOR THE PERIOD 1.1 53.4
Attributable to:
- Equity shareholders of the parent company (20.5) 30.1
- Minority Interests 21.7 23.3
Earnings per share 4.11
- Basic (0.02) 0.03
- Diluted (0.02) 0.03
31
MEDIASET GROUP
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR million)
Note
PROFIT OR (LOSS) FOR THE PERIOD 1.1 53.4
OTHER COMPREHENSIVE INCOME RECYCLED TO PROFIT AND
LOSS 2.5 3.6
Changes arising from translating the financial statement of foreign operations - -
Effective portion of gains and losses on hedging instruments (cash flow hedge) 4.6 3.4 5.2
Gains and losses on available-for-sale financial assets - -
Other gains and losses of associates valued by equity method - (0.2)
Other gains and losses - -
Tax effects 4.6 (0.9) (1.4)
OTHER COMPREHENSIVE INCOME NOT RECYCLED TO PROFIT
AND LOSS (5.2) (0.6)
Changes in revaluation surplus - -
Actuarial gains and losses on defined benefit plans 4.6 (7.2) (0.8)
Other gains and losses of associates valued by equity method - -
Other gains and losses - -
Tax effects 4.6 2.0 0.2
TOTAL OTHER COMPREHENSIVE INCOME FOR THE PERIOD NET
OF TAX EFFECTS (B) (2.8) 3.0
TOTAL COMPREHENSIVE INCOME (A)+(B) (1.6) 56.4
attributable to:
- owners of the parent (22.8) 33.1
- non controlling interests 21.2 23.3
1H 2014 1H 2013
32
MEDIASET GROUP
INTERIM CONSOLIDATED CASH FLOWS STATEMENT
(EUR million)
Notes 1H 2014 1H 2013
CASH FLOW FROM OPERATING ACTIVITIES:
Operating profit before taxation 109.5 133.6
+ Depreciation and amortisation 558.8 525.8
+ Other provisions and non-cash movements 1.7 2.6
+ Change in trade receivables 31.7 87.0
+ Change in trade payables 69.0 42.6
+ Change in other assets and liabilities (30.8) (78.5)
- Interests (paid)/received (1.7) (10.1)
- Income tax paid (46.8) (39.6)
Net cash flow from operating activities [A] 691.4 663.4
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from the sale of fixed assets 0.3 4.1
Proceeds from the sale of equity investments - -
Interests (paid)/received - -
Purchases in television rights (1,480.4) (342.2)
Changes in advances for television rights (1.4) (17.1)
Purchases of other fixed assets (12.6) (17.1)
Equity investments (7.2) (1.2)
Changes in payables for investing activities 5.1 980.4 (133.8)
Proceeds/(Payments) for hedging derivatives (5.9) 8.2
Changes in other financial assets (0.5) 7.1
Dividends received 2.5 2.7
Business Combinations net of cash acquired 5.2 (3.3) -
Changes in stakes of controlled entities 5.3 280.2 -
Net cash flow from investing activities [B] (247.9) (489.3)
CASH FLOW FROM FINANCING ACTIVITIES:
Changes in financial liabilities (395.7) (353.5)
Corporate bond - 230.0
Dividends paid - (4.1)
Changes in other financial assets/liabilities 1.0 (1.5)
Interests (paid)/received (40.0) (34.9)
Net cash flow from financing activities [C] (434.7) (164.0)
CHANGE IN CASH AND CASH EQUIVALENTS [D=A+B+C] 8.8 10.1
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE PERIOD [E] 197.6 221.8
CASH AND CASH EQUIVALENTS AT THE
END OF THE PERIOD [F=D+E] 206.4 231.9
33
MEDIASET GROUP
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS’ EQUITY
(EUR million)
Share Share Legal Company's Valuation Retained Profit/ Total Total TOTAL
capital premium reserve treasury reserve earnings/ (loss) Group shareholders' SHARE-
reserve and other shares (accumulated for the shareholders' equity HOLDERS'
reserves losses) period equity attributable EQUITY
to minority interests
Balance at 1/1/2013 614.2 275.2 504.9 (416.7) 0.6 1,430.7 (287.1) 2,121.9 843.2 2,965.1
Business Combinations - - - - - - - - - -
Allocation of the parent company's 2011 net
profit - - - - - (287.1) 287.1 - - -
Dividends paid by the parent company - - - - - - - - (4.2) (4.2)
Stock Option plan valuation - - - - (2.1) 2.3 - 0.2 0.1 0.3
(Purchase)/sale of treasury shares - - - - - - - - - -
Profits/(losses) from negotiation of treasury
shares - - - - - - - - - -
Change in consolidation perimeter - - - - - (0.1) - (0.1) - (0.1)
Other changes - - - - - 0.2 - 0.2 0.3 0.5
Comprehensive income/(loss) - - (0.2) - 3.2 - 30.1 33.1 23.3 56.4
Balance at 30/06/2013 614.2 275.2 504.6 (416.7) 1.6 1,146.2 30.1 2,155.3 862.7 3,018.0
Balance at 1/1/2014 614.2 275.2 504.7 (416.7) (13.9) 1,147.4 8.9 2,119.9 857.8 2,977.7
Allocation of the parent company's 2013 net
profit - - - - - 8.9 (8.9) - - -
Dividends paid by the parent company - - - - - - - - - -
Stock Option plan valuation - - - - (1.1) 1.1 - - - -
(Purchase)/sale of treasury shares - - - - - - - - - -
Profits/(losses) from negotiation of treasury
shares - - - - - - - - - -
Change in consolidation perimeter - - 248.8 - - (0.5) - 248.3 28.4 276.7
Other changes - - - - - 0.9 - 0.9 1.1 2.0
Comprehensive income/(loss) - - - - (2.3) - (20.5) (22.8) 21.2 (1.6)
- - - - - - - - - -
Balance at 30/06/2014 614.2 275.2 753.4 (416.7) (17.3) 1,157.9 (20.5) 2,346.2 908.5 3,254.7
34
EXPLANATORY NOTES TO THE
INTERIM CONDENSED FINANCIAL STATEMENTS
AT 30 JUNE 2014
1. Basis of preparation
These half-yearly condensed consolidated financial statements, prepared in accordance with IAS
34 - Interim Financial Reporting - are based on the same accounting standards and
measurement criteria adopted in preparing the consolidated financial statements at 31
December 2013, to which reference is made, except for the adoption of new standards,
amendments and interpretations effective from 1 January 2014 and for some complex
measurement processes, including the impairment tests designed to ascertain any impairment
of fixed assets. In the absence of indicators, events, or circumstances such as to change the
measurements previously made, these tests are generally carried out when preparing the
annual financial statements, when the information is available for this process to be completed
in a comprehensive manner. Finally, actuarial valuations needed to determine employee benefits
provisions are normally drawn up on a semi-annual basis.
These half-yearly condensed consolidated financial statements do not contain all information
and disclosures required for the annual financial statements and should therefore be read in
conjunction with the Consolidated Financial Statements at 31 December 2013.
The preparation of the interim financial statements requires management to make estimates
and assumptions that affect the reported amounts of revenues, costs, assets and liabilities and
the disclosure of contingent assets and liabilities at the reporting date.
Income taxes for the period were recognised based on the best estimate of the weighted
average tax rate expected for the entire year.
The consolidated interim results of the Mediaset Group are affected by the seasonal nature of
advertising revenues, traditionally more concentrated in the first half of the year.
The values of the items in the Consolidated Financial Statements, in view of their size, are
shown in millions of Euros.
These half-yearly condensed consolidated financial statements have been subject to limited
audit by the independent auditors Ernst & Young S.p.A..
2. New accounting standards, amendments and interpretations effective from 1
January 2014
The Group has applied the following new accounting standards and/or amendments and
interpretations to previously effective standards with effect from 1 January 2014.
IFRS 10 Consolidated Financial Statements
IFRS 10 replaces the portion of IAS 27 (Consolidated and Separate Financial Statements) that
addresses the accounting for consolidated financial statements and SIC-12 Consolidation -
Special Purpose Entities, coordinating the notion of control under IAS 27 with the "risks and
benefits” approach of SIC 12.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
35
IFRS 10 introduces a single notion of control for consolidation purposes that applies to all
entities including special purpose entities. The new definition provides for the recognition of
control when the investor is able to influence its returns (exposure or rights to the variability of
results) by exercising its power, defined as the current ability to direct the relevant activities of
the controlled entity, i.e. those that have a significant impact on the returns of the investee,
resulting from possession of valid substantive rights (ranging from voting rights by way of equity
instruments - legal control - nevertheless ascertaining and considering all the facts and
circumstances including those linked to any actual or potential rights arising from one or more
contractual agreements - "de facto control" -).
The adoption of this standard had no impact on the consolidation area in this Interim Financial
Report.
IFRS 11 Joint Arrangements
IFRS 11 replaces IAS 31 Investments in Joint Ventures and SIC-13 Jointly-controlled Entities -
Non-monetary Contributions by Venturers. This principle governs the two different types of
"joint arrangements":
Joint ventures: corporate agreements involving joint control, in which the parties to the
agreement have rights to the net assets (equity) covered by the agreement. Joint controlled
entities that qualify as a joint venture must be accounted for at equity.
Joint operation: the parties to the agreement have rights to the individual assets and
liabilities. For the purposes of the consolidated financial statements, each party recognises
its share of the assets and/or liabilities, costs and/or revenues in its financial statements.
There are currently no arrangements of this type within the scope of consolidation of the
Mediaset Group.
IFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate
consolidation, subject to the criteria for assessing whether an arrangement qualifies as a joint
arrangement as above specified.
The adoption of this new standard has no impact at Group level because the equity method has
already been adopted for the measurement of equity investment in joint ventures as an
alternative to proportionate consolidation.
IFRS 12 Disclosure of Investments in Other Companies
IFRS 12 provides information regarding all the disclosures requirements that were previously in
IAS 27 related to consolidated financial statements, as well as all the disclosures that were
previously required by IAS 31 and IAS 28. The new standard establishes reporting requirements
for equity investments in subsidiaries, joint arrangements, associates and structured entities,
introducing new cases requiring disclosure, not contemplated in the past. This new standard
will have no impact on the Group’s financial position or performance.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
36
IAS 27 Separate Financial Statements (as revised in 2011)
Following the introduction of the new IFRS 10 and IFRS 12, what remains of IAS 27 is limited to
accounting for subsidiaries, jointly controlled entities, and associates in separate financial
statements.
IAS 28 Investments in Associates (as revised in 2011)
As a consequence of the new IFRS 11 Joint Arrangements, and IFRS 12 Disclosure of Interests in
Other Entities, IAS 28 has been renamed Investments in Associates and Joint Ventures, and
describes the application of the equity method to investments in joint ventures, in addition to
associates. The adoption of this standard has no impact at Group level because the equity
method has already been adopted for the measurement of equity investment in joint ventures
as an alternative to proportionate consolidation.
IAS 32 Offsetting Financial Assets and Financial Liabilities — Amendments to IAS 32
These amendments clarify the meaning of “currently has a legally enforceable right to set-off”.
The amendment also clarifies the application of the IAS 32 offsetting criteria to settlement
systems (such as central clearing house systems) which apply gross settlement mechanisms that
are not simultaneous. These amendments have not impact on the Group’s financial position or
performance.
3. Key corporate transactions and changes in the scope of consolidation
The partial spin-off of the subsidiary Towertel S.p.A. (broadcasting operations) in favour of EI
Towers S.p.A., approved in 2013 by the respective Boards of Directors, became effective on 1
January 2014. This transaction had no impact on the scope of consolidation.
On 28 February 2014, the subsidiary Towertel S.p.A. acquired 100% of the share capital of
Società Assistenza Ripetitori Televisivi S.r.l. (S.A.R.T.), a company that offers hosting,
maintenance and management services for telecommunication and broadcasting networks. This
company has been consolidated on a line-by-line basis.
On 4 April 2014 the subsidiary Elettronica Industriale sold 25% of the share capital of EI
Towers S.p.A., corresponding to 7,065,600 ordinary shares. As a result, the investment in the
company decreased from 65% to 40% of the share capital. The Group still has control in this
company, as regards the right to appoint the majority of board directors.
In May, the subsidiary Mediaset España acquired 6.74% of the capital in ByHours Travel, S.L.,
a company operating in the development and management of an innovative technological
platform for on-line hotel booking, where users can indicate arrival and departure times.
On 25 June the subsidiary Mediaset España acquired 11.82% of the share capital in Grupo
Yamm Comida a Domicilio, S.L., a company offering home catering services on-line.
Finally, following the sale of treasury shares by the subsidiary Mediaset España Comunicación in
the period, the Group’s equity investment fell from 42.128% to 42.096%, after the option right
of stock option plan beneficiaries was exercised.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
37
4. Comments on the main changes in assets, liabilities, revenues and expenses
4.1 Tangible and intangible fixed assets, Television and movie broadcasting rights
Property, plant
and equipment
Television and
movie rights
Goodwill
Other intangible
assets
Balance at 31/12/2013 533.6 1,830.3 912.4 685.3
Changes in the consolidation area 0.2 - 3.6 (0.0)
Additions 9.2 1,412.7 0.0 72.4
Other changes (1.4) 67.7 (0.0) (71.4)
Disposals (0.0) - - -
Amortisation, depreciation and write-downs (43.2) (482.4) - (24.8)
Balance at 30/06/2014 498.6 2,828.3 916.0 661.5
The item Business combinations refers to the acquisition during the period by the subsidiary
Towertel S.p.A. of 100% of the capital in the company Assistenza Ripetitori Televisivi S.r.l.
Specifically, the increase in Goodwill of EUR 3.6 million reflects the provisional allocation of the
consideration paid for the acquisition equal to EUR 4.6 million. Of this amount, EUR 3.9 million
were already paid in the half year period. As required by IFRS 3, the final allocation of the
consideration paid shall be made within twelve months from the acquisition date in order to
determine the fair value of assets acquired and liabilities assumed. If at the end of the evaluation
period, any tangible or intangible assets are identified, an adjustment will be made to the
provisional amounts recognised at the acquisition date, with retrospective effect as of the
acquisition date.
Below is a summary of the main changes, in addition to depreciation, amortisation, write-downs
and business combinations, compared to the amounts in the consolidated financial statements at
31 December 2013:
increases in Television and movie broadcasting rights of EUR 1,480.4 million of which
EUR 1,412.7 million for purchases in the period and EUR 67.7 million for capitalisation of
advances paid to suppliers (recognised as Assets in progress and advances as at 31 December
2013). As already indicated in the section Significant events in the first half of the year of the
Report on Operations, investments for the period include EUR 1,110.0 million referring to
rights assigned by the Football League corresponding to DTT rights to broadcast matches of
the best 8 teams in the Italian Serie A Championships for the 2015 to 2018 seasons, and
highlights and Premium Live rights for all matches. On 30 June, the corresponding amount
recognised in the balance sheet of this investment referred to trade payables for the total
amount of rights assigned by the League and trade receivables for the amount of the sub-
licence to Sky. Other changes include decreases and cancellations of previously recognised
rights.
increases in property, plant and equipment of EUR 9.2 million, mainly relating to
ongoing investments in broadcasting sites, infrastructure and transmission equipment
nearing completion;
increases in other intangible fixed assets totalling EUR 72.4 million, primarily consisting
of increases in assets in progress and advances for advances on future purchases of rights.
As already commented for Television and movie broadcasting rights, the item Other changes
Half Year Financial Report at 30 June 2013 – Explanatory Notes
38
includes decreases of EUR 67.7 million relating to the capitalisation as broadcasting rights of
advances paid to suppliers. During the period, EUR 15.2 million were capitalised,
recognised in the previous year under Intangible assets in progress for the implementation of
the new ADSales platform used for the new management system supporting sales and
invoicing of advertising space in Italy. A useful life of 7 years was recognised for this
intangible asset, in relation to a specific use supporting the business model, with
amortisation for the period of EUR 1.0 million. Compared to the useful life of 3 years
normally assigned to software, lower amortisation, equal to EUR 1.5 million was generated
in the period.
4.2 Equity Investments in Associates and Joint Ventures and other financial assets
Equity investments in jointly-controlled
and affiliated companies
431.5 3.6 (2.7) (60.6) (325.0) 46.7
Investments in other companies 7.0 2.8 - (0.1) - 9.8
Receivables and other financial assets 31.3 0.7 (0.4) - (3.8) 27.8
Total 469.8 7.2 (3.1) (60.7) (328.8) 84.3
Balance at
30/06/2014
Balance at
31/12/2013
Additions Disposals
Write-ups /
(Write-offs)
Other changes
With regard to the item Investments in associates and joint ventures, the negative effect of
the period refers to EUR 12.6 million for the equity accounted 22% stake in DTS Distribuidora
de Televisión Digital S.A., corresponding to the pro-rata share in the result for the period, and
EUR 3.6 million for the amortisation of intangible assets identified during the final allocation of
the cost of this investment. As reported in Subsequent Events, during July, Mediaset España sold
its investment, realising a capital loss of EUR 47.4 million recognised under Write-
backs/(impairment). Other changes refer to the 22% share held in the company reclassified
under the item Non-current assets held for sale.
Please note that after 30 June, pursuant to IFRS 5 the sale became likely of the 48.96% interest
held by the subsidiary RTI S.p.A. in Capitolosette S.r.l., a company of the The Space Cinema
Group, a leader in the operation of multiplex cinemas in Italy, following the initiation of the
process of sale of that interest by shareholders.
Increases for the period refer to the payment made by the subsidiary RTI S.p.A. to cover losses
of the jointly controlled company Boing S.p.A..
Increases in the item Investments in other companies refers to the purchase by the subsidiary
Mediaset España of 6.74% of the capital in the company ByHours Travel S.L. for EUR 0.3
million and the purchase of 11.82% of share capital in the company Grupo Yamm Comida a
Domicilio, S.L. for EUR 2.5 million.
The main changes in Receivables and other financial assets refer to the restatement under
Other receivables and current assets of the current portion of the receivables due in one year
from the associate Boing S.p.A., originating from the transfer of a library of television
broadcasting rights and entertainment programmes for child audiences carried out in the
previous financial year.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
39
4.3 Deferred Tax Assets and Liabilities
The increase in the item Deferred tax assets equal to EUR 18.9 million mainly refers to the
increase arising from the recognition of deferred tax assets generated during the period against
a negative taxable base transferred from companies that are part of the Italian tax consolidation
scheme, to the tax benefit of the impairment of the investment in DTS Distribuidora de
Televisión Digital S.A., and to referable uses, as well as to the effect of temporary
misalignments between tax and economic values of assets and liabilities for the adjustment of
the IRAP tax rate from 3.9% to 3.5% and to tax receivables of Mediaset España made available
during the period. As at 30 June 2014, based on the estimate of deferred and current taxes for
the period in accordance with IAS 34, deferred tax assets relative to tax losses carried forward
for an unlimited period for IRES tax purposes amounted to EUR 34.8 million, recoverable on
the basis of the Group's most recent business plans.
4.4 Non-current assets available-for-sale
This item amounted to EUR 325.0 million and refers to the sale value of the 22% equity
investment in DTS Distribuidora de Televisión Digital S.A. following the signing of the sale of
such investment on 4 July 2014.
This value includes, in addition to the sale price equal to EUR 295.0 million, EUR 30.0 million
arising from the evaluated waiver of the pre-emption and sale rights held by Mediaset España
and provided for in the shareholders' agreement signed in 2010.
4.5 Other reserves
30/06/2014 31/12/2013
Legal reserve 122.8 122.8
Equity investment evaluation reserve (0.2) (0.2)
Consolidation reserve (78.9) (78.9)
Reserves for minority transactions 383.3 134.6
Other reserves 326.3 326.3
Total 753.4 504.7
The change in the first half of the year in item Reserves for minority transactions, amounting to
EUR 248.8 million, relates to the recognition of gain, net of tax effects, resulting from the
allocation of 25% - equal to n. 7,065,600 ordinary shares - of the subsidiary EI Towers S.p.A.,
as discussed in section Significant events and transactions in the first half of the year.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
40
4.6 Valuation reserves
30/06/2014 31/12/2013
Cash flow hedge reserve (7.6) (10.1)
Stock option plans 12.8 13.9
Actuarial Gains/(Losses) (22.5) (17.7)
Total (17.3) (13.9)
The table below shows the changes occurred during the period.
Valuation reserves
Balance at
1/1
Increase/
(Decrease)
Through
Profit and
Loss Account
Opening
balance
adjustments
of the hedged
item
Fair Value
adjustments
Deferred tax
effect
Balance at
30//06
Financial assets for cash flow hedging
purpose (10.1) (0.3) (1.0) 2.5 2.1 (0.9) (7.6)
of which:
- FOREX rate risk (9.6) (0.3) 0.0 2.5 3.1 (1.5) (5.8)
- interest rate risk (0.5) - (1.0) - (0.9) 0.5 (1.8)
Stock option plans 13.9 (1.1) - - - - 12.8
Actuarial Gains/(Losses) on defined
benefit plans (17.7) (6.6) - - - 1.8 (22.5)
Total (13.9) (8.0) (1.0) 2.5 2.1 0.9 (17.3)
The Valuation reserve for financial assets for cash flow hedging purpose is connected with
valuations of derivative instruments designated as hedges against the foreign exchange risk
associated with the acquisition of television and movie broadcasting rights in foreign currencies,
or as hedges against the interest rate risk associated with medium and long-term financial
liabilities.
The reserve for stock option plans consists of debit entries for costs accruing at 30 June 2014,
measured in accordance with IFRS 2, in connection with stock options assigned by Mediaset
under three-year stock option plans and by the subsidiary Mediaset España Comunicación, for
the portion attributable to the Group. The change for the period is attributable to the
restatement in retained earnings of the portion of the reserve associated with plans for which
the exercise period has expired.
The Reserve for actuarial gains and losses consists of components arising from the actuarial
valuation of defined benefit plans, recognised directly through shareholders’ equity.
The change in the Valuation reserve for financial assets for cash flow hedging purpose and
the Valuation reserve for actuarial gains and losses, before tax, is shown in the
Comprehensive Income Statement.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
41
4.7 Provisions for risks and contingent liabilities
The decrease in risk provisions of EUR 46.0 million is mainly attributable to the use of
provisions allocated as at 31 December 2013 as a result of the corresponding liabilities
occurring during the first half of the year. Uses include EUR 13.5 million referring to the portion
for the half year of provisions allocated in 2012 that, in accordance with IAS 37, reflect the costs
of some long-term contracts for sports events of which the outstanding value as at 30 June 2014
was equal to EUR 3.7 million.
Below is an update of the main lawsuits pending and contingent liabilities associated with them,
which were reported in the financial statements as at 31 December 2013.
As mentioned in section Subsequent events with reference to the “Mediatrade” trial (case
40382/05 RGNR), involving Frank Agrama and Group directors and managers, on 8 July 2014,
the Court of Milan acquitted all persons charged.
In June, tax claims were made against RTI S.p.A. for the tax years from 2005 to 2012, with the
request to make a settlement in accordance with Article 5 of Legislative Decree 218/1997 with
the payment of EUR 9.5 million (of which EUR 6.9 million for taxes, EUR 1.1. million for fines
and EUR 1.5 million for interest) against a provision for risks of EUR 11.5 million recognised in
the financial statements as at 31 December 2013. To pay the aforesaid amounts, the current
account opened on 6 February available to the judicial authorities was used.
The decision to settle the tax dispute was made solely for reasons of expediency related to
savings on the costs that would have arisen from the continuation of the tax dispute and
without acknowledging any liability on the part of the company.
As at 30 June, Mediaset S.p.A. had made a provision of EUR 1.8 million equal to the estimated
maximum cost for the closure of the years after 2004 for tax disputes related to the "Mediaset
Rights Trial", as already reported in the financial statements as at 31 December 2013.
With reference to the main disputes in progress and the contingent liabilities relative to
Mediaset España Group, during the period no facts or circumstances occurred as to alter the
situation reported in the financial statements as at 31 December 2013.
On 3 February 2014, with a first-instance ruling (no. 1181/10) Mediaset España was sentenced
to pay a content supplier (approximately EUR 15 million) for failing to meet contract
obligations. Mediaset España is finalising its appeal against this ruling, as there are numerous
reasons supporting this action. The company believes that the “Audiencia Provincial” (Provincial
Court) will annul the ruling, so no provision was considered necessary as of this Interim
Financial Report.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
42
4.8 Net Financial Position
In accordance with Consob Communication 6064293 of 28 July 2006, here we report the
breakdown of the consolidated net financial position, showing the Group's current and non-
current net financial debt.
For a breakdown of changes in the net financial position over the period, see the section on the
Group's balance sheet and financial structure in the Interim Report on Operations.
30/06/2014 31/12/2013
Cash in hand and cash equivalents 0.1 0.1
Bank and postal deposits 206.4 197.6
Securities and other current financial assets 6.4 5.5
Total liquidity 212.9 203.1
Current financial receivables 34.8 32.3
Due to banks (138.3) (315.1)
Current portion of non current debt (38.6) (38.2)
Other current payables and financial liabilities (19.2) (21.9)
Current financial debt (196.1) (375.2)
Current Net Financial Position 51.6 (139.8)
Due to banks (197.4) (427.0)
Corporate bond (876.2) (890.9)
Other non current payables and financial liabilities (4.3) (1.4)
Non current financial debt (1,077.9) (1,319.3)
Net Financial Position (1,026.4) (1,459.0)
Securities and other current financial assets consist of bonds and investment funds held by
the subsidiary Mediaset Investment S.a.r.l. (EUR 5.5 million at 31 December 2013).
Current financial receivables include EUR 22.9 million (EUR 22.9 million as at 31 December
2013) in government subsidies for movie productions made by Medusa Film and Taodue, which
had been approved but not paid at the reporting date; EUR 11.0 million in relation to current
accounts managed by the parent Mediaset S.p.A. on behalf of associates and joint ventures
(EUR 8.6 million as at 31 December 2013) and EUR 0.9 million in financial receivables held by
Mediaset España Group (EUR 0.8 million as at 31 December 2013). The item also includes the
fair value of financial hedging instruments for the amount exceeding the change in hedged
foreign currency payables of EUR 1.2 million.
Due to banks (current) refer to short term credit lines.
The decrease of EUR 176.8 million refers to a reduced use of short-term credit facilities.
The current portion of non-current financial debt primarily consists of the current portion
of corporate bonds for EUR 34.9 million (EUR 26.4 million as at 31 December 2013), the
current portion of committed credit facilities for EUR 3.2 million (EUR 11.1 million as at 31
December 2013) and the current portion of the fair value of collar derivatives designated as
hedges against the risk of interest rate fluctuations on medium and long-term financial liabilities,
amounting to EUR 0.5 million (EUR 0.6 million as at 31 December 2013).
Other current payables and financial liabilities mainly include current accounts managed
by the parent Mediaset S.p.A. on behalf of associates and joint ventures totalling EUR 13.6
million (EUR 11.2 million as at 31 December 2013 ), amounts owed to factoring companies
Half Year Financial Report at 30 June 2013 – Explanatory Notes
43
totalling EUR 3.0 million (EUR 7.4 million at 31 December 2013), loans totalling EUR 1.6 million
received to finance film development, distribution and production operations (EUR 3.1 million
at 31 December 2013).
Due to banks (non current) refers to the portion of committed credit facilities (revolving)
maturing beyond 12 months. These payables are recognised in the financial statements using
the amortised cost method.
The change compared to 31 December 2013 was equal to EUR 229.6 million and refers to the
early settlement of two loans for a total nominal amount of EUR 240 million (recognised the
previous year at amortised cost for a value of EUR 229.6 million).
As already reported in the financial statements at 31 December 2013, existing loans and credit
facilities are subject to financial covenants on a consolidated basis (semi-annual and annual),
which if not met, would result in a refund of the portion used. To date, these requirements
have been met.
The item Bond issue refers to the non-current portion of bonds issued by Mediaset Group, as
set out below:
bonds issued by Mediaset S.p.A. on 1 February 2010 for a total nominal value of EUR 300.0
million, whose amortised cost (including the current portion) amounted to EUR 378.9
million,
bonds issued by Mediaset S.p.A. on 23 October 2013 for a total nominal value of EUR 375.0
million, whose amortised cost (including the current portion) amounted to EUR 304.4
million;
and the bonds issued by the subsidiary EI Towers S.p.A. on 26 April 2013 for a total nominal
value of EUR 230.0 million, whose amortised cost (including the current portion) amounted
to EUR 227.9 million.
Non-current financial liabilities and payables primarily consist of loans received to finance
film development, distribution and production operations for EUR 1.4 million (EUR 1.4 million
as at 31 December 2014) and the non-current portion of the fair value of collar derivatives
designated as hedges against the risk of interest rate fluctuations on medium and long-term
financial liabilities, for EUR 2.9 million.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
44
4.9 Financial income and expenses
1H 2014 1H 2013
Interests on financial assets 1,4 0,9
Interests on financial liabilities (29,2) (23,6)- -
Other financial income/(losses) (12,3) (8,3)
- -
Foreign exchange gains/(losses) (0,3) 0,4
Total financial income/(losses) (40,5) (30,7)
The item Interest expense on financial liabilities includes the interest expense for the period on
bonds issued by the Mediaset Group and the EI Towers Group totalling EUR 22.6 million (EUR
9.4 million at 30 June 2013).
The increase in item Other financial income/(charges) primarily refers to the costs resulting from
the early pay-off of credit facilities and the amount for the period of the fees due on the release
of the bank guarantee issued at UEFA's request following the assignment of the Champions
League rights.
4.10 Taxes for the period
1H 2014 1H 2013
IRES and IRAP tax expenses 1.9 (4.5)
Tax expenses (foreign companies) 25.3 7.8
Deferred tax expense (20.0) 37.5
Total 7.2 40.8
The item IRES and IRAP taxes includes costs relative to the estimate of IRAP tax for the period
and the estimate of IRES tax for companies that are not part of the tax consolidations scheme
and income of EUR 13.7 million resulting from a negative consolidated taxable base for IRES
purposes for companies that are part of the Italian tax consolidation scheme, with a
corresponding amount being recognised in the balance sheet as deferred tax assets.
The item deferred tax assets and liabilities comprises the financial movements for the period for
the posting and/or use generated by the impact of the progress of temporary differences
between the values for tax and accounting purposes. The item includes EUR 18 million for the
tax benefit recognised following the impairment of DTS Distribuidora de Televisión Digital S.A.
in the period, in relation to the sale of the investment at the end of the half year. This item also
includes the effect, equal to EUR 1.8 million, of the change in the IRAP tax rate from 3.9% to
3.5% (as provided for by Law Decree no. 66 of 24 April 2014) on deferred tax assets and
liabilities.
The taxes of foreign companies primarily include charges for current taxes recognised by
companies of the Mediaset España Group.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
45
4.11 Profit/loss per share
The calculation of basic and diluted earnings per share is based on the following data:
1H 2014 1H 2013
Net result for the period (millions of euro) (20.5) 30.1
Weighted average number of ordinary shares (without own shares) 1,136,402,064 1,136,402,064
Basic EPS (0.02) 0.03
Weighted average number of ordinary shares for the diluted EPS
computation 1,136,402,064 1,136,402,064
Diluted EPS (0.02) 0.03
The figure for earnings per share is calculated using the ratio of the Group’s net profit/loss to
the weighted average number of shares in circulation during the period, net of treasury shares.
The figure for earnings per diluted share is calculated using the number of shares in circulation
and the potential diluting effect from the allocation of treasury shares to the beneficiaries of
vested stock option rights.
5. Cash flows statement
5.1 Change in payables for investments
This item includes EUR 1,110 million related to payables to Lega Calcio following the
assignment of the Serie A league championship broadcasting rights net of trade receivables for
the amount arising from the sub-licensing of such rights to Sky Italia.
5.2 Business combinations net of cash and cash equivalents acquired
This item refers to the impact on cash and cash equivalents for the period arising from the
purchase of 100% of the share capital of the Company Assistenza Ripetitori Televisivi S.r.l..
5.3 Changes in stakes in subsidiaries
The amount refers to the net proceeds arising from the sale of the 25% of the subsidiary EI
Towers.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
46
6. Segment reporting
As required under IFRS 8, the following information relates to the operating segments identified
on the basis of the Group’s present organisational structure and internal reporting system.
The Group’s main operating segments, already included in the analysis of results contained in
the Interim Report on Operations, are the same as the geographical areas (Italy and Spain)
identified according to the location of operations. These operations are then segmented
further, to monitor the performance of the business areas operating in each country. In relation
to Spain, which corresponds to the Mediaset España Group, no significant areas have been
identified other than the core business of television, which is therefore the same as that entity.
The following paragraphs contain the information and reconciliations required under IFRS 8 in
relation to profits, losses, assets and liabilities, based on this segmentation process. The
information can be extrapolated from the two sub-consolidated financial statements prepared
at that level, while the information provided for the three operating segments based in Italy has
been given with reference to the earnings and operational activities directly attributable to
them.
Geographical sectors
The following tables report key financial information for the two geographical operational areas
of Italy and Spain, as at 30 June 2014 and 2013 respectively.
The tables have been prepared on the basis of specific sub-consolidated financial statements in
which the carrying amount of the equity investments held by companies belonging to a segment
in companies belonging to another segment have been kept at their respective purchase cost
and eliminated upon consolidation. Likewise, in the sector income statement, income and
expenses (relating to any dividends received from these investments) have been included under
Income from other equity investments.
The inter-segment assets figures for Italy mainly relate to the carrying amount of investments
held in Mediaset España (41.6%) and Mediacinco Cartera S.L. (25%-owned, and already fully
consolidated into the Spain area, which owns 75% of it) and the loan granted to Mediacinco
Cartera S.L. by Mediaset Investment S.a.r.l., which amounted to EUR 19.7 million at 30 June
2014.
Non-monetary costs relate to the provisions for risks and charges.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
47
1H 2014 ITALY SPAIN
Eliminations/
Adjustments
MEDIASET
GROUP
MAIN INCOME STATEMENT FIGURES
Revenues from external customers 1,256.9 468.0 - 1,724.8
Inter-segment revenues 0.5 - (0.5) -
Consolidated net revenues 1,257.4 468.0 (0.5) 1,724.8
% 73% 27%0.0 100%
EBIT 29.4 80.1 - 109.5
% 27% 73% 0%100%
Financial income/(losses) (39.6) (0.8) - (40.5)
Income/(expenses) from equity investments valued with the equity method(1.3) (11.9) - (13.2)
Income/(expenses) from other equity investments (0.1) (47.4) - (47.5)
EBT (11.6) 20.0 - 8.4
Income taxes (8.4) 1.1 - (7.2)
NET PROFIT FROM
CONTINUING OPERATIONS(20.0) 21.1 - 1.1
Net Gains/(Losses) from discontinued operations - - - -
NET PROFIT FOR THE PERIOD (20.0) 21.1 - 1.2
Attributable to:
- Equity shareholders of the parent company (29.3) 21.4 (12.7) (20.5)
- Minority Interests 9.3 (0.3) 12.7 21.7
OTHER INFORMATION
Assets 6,793.1 1,789.8 (611.4) 7,971.5
Liabilities 4,403.3 335.3 (21.7) 4,716.8
Investments in tangible and intangible non current assets 1,371.0 123.5 - 1,494.4
Amortization 449.9 108.9 - 558.8
Other non monetary expenses 2.0 (0.2) - 1.7
(*) Includes the change in “Advances for the purchase of broadcasting rights”
Half Year Financial Report at 30 June 2013 – Explanatory Notes
48
1H 2013 ITALY SPAIN
Eliminations/
Adjustments
MEDIASET
GROUP
MAIN INCOME STATEMENT FIGURES
Revenues from external customers 1,310.0 427.0 - 1,737.0
Inter-segment revenues 0.4 - (0.4) -
Consolidated net revenues 1,310.4 427.0 (0.4) 1,737.0
% 75% 25%0.0 100%
EBIT 86.4 47.2 - 133.6
% 65% 35% 0%100%
Financial income/(losses) (29.7) (1.0) - (30.7)
Income/(expenses) from equity investments valued with the equity method(1.7) (7.8) - (9.5)
Income/(expenses) from other equity investments 0.9 (0.0) - 0.8
EBT 55.8 38.4 - 94.2
Income taxes (32.3) (8.5) - (40.8)
NET PROFIT FROM
CONTINUING OPERATIONS23.5 29.8 - 53.4
Net Gains/(Losses) from discontinued operations - - - -
NET PROFIT FOR THE PERIOD 23.5 29.8 - 53.4
Attributable to:
- Equity shareholders of the parent company 17.6 30.1 (17.7) 30.1
- Minority Interests 5.9 (0.3) 17.7 23.3
OTHER INFORMATION
Assets 5,744.6 316.6 (21.3) 6,039.9
Liabilities 3,588.1 294.0 (2.3) 3,879.8
Investments in tangible and intangible non current assets 254.0 122.4 - 376.4
Amortization 439.2 86.6 (0.0) 525.8
Other non monetary expenses (2.3) 2.6 - 0.3
(*) Includes the change in “Advances for the purchase of broadcasting rights”
Half Year Financial Report at 30 June 2013 – Explanatory Notes
49
Italy: Operating segments
Operating segments have been reported in the Interim Report on Operations, where details on
performance for the period can be found.
Income Statement Summary INTEGRATED EI ELIMINATIONS GEOGRAPHICAL
1H 2014 TELEVISION TOWERS / SEGMENT
OPERATIONS ADJUSTMENTS ITALY
Revenues from external customers 1,230.8 26.6 - 1,257.4
Inter-segment revenues - 90.1 (90.1) -
Consolidated net revenues 1,230.8 116.7 (90.1) 1,257.4
% 98% 9% -7% 100%
Operating costs from thrid parties (717.2) (60.8) - (778.0)
Inter-segment operating costs (88.4) (1.7) 90.1 -
Total Operating Costs (805.6) (62.5) 90.1 (778.0)
Amortisation, depreciation and write-downs (428.8) (21.1) - (449.9)
EBIT (3.7) 33.1 - 29.4
Income Statement Summary INTEGRATED EI ELIMINATIONS GEOGRAPHICAL
1H 2013 TELEVISION TOWERS / SEGMENT
OPERATIONS ADJUSTMENTS ITALY
Revenues from external customers 1,283.9 26.5 - 1,310.4
Inter-segment revenues - 89.9 (89.9) -
Consolidated net revenues 1,283.9 116.4 (89.9) 1,310.4
% 98% 9% -7% 100%
Operating costs from thrid parties (722.1) (62.7) - (784.8)
Inter-segment operating costs (88.3) (1.6) 89.9 -
Total Operating Costs (810.4) (64.3) 89.9 (784.8)
Amortisation, depreciation and write-downs (416.9) (22.3) - (439.2)
EBIT 56.6 29.8 (0.0) 86.4
Half Year Financial Report at 30 June 2013 – Explanatory Notes
50
Operating Assets and Investments INTEGRATED EI ELIMINATIONS GEOGRAPHICAL
30th June 2014 TELEVISION TOWERS / SEGMENT
OPERATIONS ADJUSTMENTS ITALY
Television rights 2,579.7 - - 2,579.7
Other tangible and intangible non current assets 584.4 300.9 (1.6) 883.7
Goodwill 142.8 457.9 (335.1) 265.5
Trade receivables 1,325.5 29.6 - 1,355.2
Inventories 30.8 2.6 - 33.4
Operating assets 4,663.2 791.0 (336.7) 5,117.5
- - - -
Investments in television rights (*) 1,354.9 - - 1,354.9
Other investments 6.4 3.5 - 9.9
Investments in tangible and intangible assets 1,361.3 3.5 - 1,364.7
(*) Not including the change in “Advances for the purchase of broadcasting rights”
Operating Assets and Investments INTEGRATED EI ELIMINATIONS GEOGRAPHICAL
30th June 2013 TELEVISION TOWERS / SEGMENT
OPERATIONS ADJUSTMENTS ITALY
Television rights 1,871.5 - - 1,871.5
Other tangible and intangible non current assets 642.2 334.4 (1.4) 975.3
Goodwill 142.8 454.5 (335.1) 262.2
Trade receivables 701.5 34.7 - 736.2
Inventories 27.3 3.0 - 30.3
Operating assets 3,385.4 826.6 (336.5) 3,875.5
- - - -
Investments in television rights (*) 230.6 - - 230.6
Other investments 12.2 2.3 - 14.5
Investments in tangible and intangible assets 242.8 2.3 - 245.1
(*) Not including the change in “Advances for the purchase of broadcasting rights”
The main operating assets allocated to the Italy sector include television and movie broadcasting
rights assigned to the Integrated Television Operations segment, the library (films, dramas,
mini-series, TV films and cartoons), long-running self-produced drama series, and
entertainment, news and sport rights serving both the free-to-air and Mediaset Premium
channels. In particular, sports broadcasting rights include the broadcasting rights for the Serie A
league championship for Italy’s leading soccer clubs, up until the 2014/2015 season, as well as
the three subsequent seasons 2015/2018, following the assignment that took place at the end of
the period.
Other tangible and intangible assets mainly relate to:
for the Integrated Television Operations segment, television frequency user rights for
DTT Multiplex and related transmission equipment, equipment supporting television
production centres, IT systems, and the upgrading of management offices and other
properties and investments relating to development of the Mediaset Premium subscription-
based pay-TV platform;
for EI Towers, they include land, buildings and the equipment related to the broadcasting
network.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
51
7. Related party transactions
The following summary table shows, for the main income statement and balance sheet
groupings, the details of the companies that are the counterparties of these transactions
(identified in accordance with IAS 24 and grouped by type of relation):
Revenues
Operating
costs
Financial
income/
(charges)
Trade
receivables
Trade payables
Other
receivables/
(payables)
CONTROLLING ENTITY
Fininvest S.p.A. 0.1 2.5 - 1.3 0.0 0.3
ASSOCIATED ENTITIES
A.C. Milan S.p.A.* 0.1 0.1 - 0.1 4.2 -
Alba Servizi Aerotrasporti S.p.A. 0.0 0.3 - 0.3 0.2 -
Arnoldo Mondadori Editore S.p.A.* 6.9 0.4 - 4.9 0.5 (0.0)
Fininvest Gestione Servizi S.p.A. 0.0 0.0 - 0.0 - 0.0
Isim S.p.A. - - - - - -
Mediobanca S.p.A. - 0.0 (2.9) 0.0 - (197.6)
Mediolanum S.p.A.* 2.8 - - 1.0 - -
Trefinance S.A.* - 0.0 - - - -
Other associated 0.0 0.5 - 0.0 0.0 -
Total associated 9.9 1.4 (2.9) 6.4 5.0 (197.6)
JOINT CONTROLLED AND AFFILIATED ENTITIES
60 DB Entertainment S.L. - 0.0 - - - -
Agrupaciòn de Interés Economico Furia de Titanes II A.I.E. - - - - - -
Auditel S.p.A. - 2.3 - - - -
Beigua S.r.l. - - - - - -
Big Bang Media S.L. 0.0 1.9 - 0.0 4.1 -
Boing S.p.A. 4.8 16.9 0.2 13.3 11.1 10.1
Capitolosette S.r.l.** 0.8 0.2 0.0 1.3 0.2 0.8
DTS Distribuidora de Television Digital SA 0.0 11.5 - 0.0 7.6 -
Editora Digital de Medios S.L. 0.0 0.1 - 0.0 0.1 -
Fascino Produzione Gestione Teatro S.r.l. 0.3 25.0 (0.1) 0.3 13.7 (11.2)
La Fabbrica De la Tele SL - 12.1 - 1.2 7.4 -
Mediamond S.p.A. 16.4 3.3 0.1 17.9 4.6 11.1
MegaMedia Televisión SL 0.1 2.1 - 0.1 0.9 -
Nessma Lux S.A.** - - 0.0 0.0 0.1 (0.0)
Netsonic SL - - - - - 0.7
Pegaso Television INC** - - 0.2 - - 3.8
Produciones Mandarina SL 0.0 6.0 - 0.0 2.9 0.1
Supersport Televisión SL 0.7 7.4 0.0 0.8 1.5 -
Titanus Elios S.p.A. - 2.0 - 0.6 - 6.1
Tivù S.r.l. 1.2 0.6 - 1.2 0.5 0.0
Total joint controlled and affiliated entities 24.4 91.3 0.3 36.8 54.8 21.5
KEY STRATEGIC MANAGERS*** - 0.8 - - - (0.3)
PENSION FUNDS (Mediafond) - - - - - (1.8)
OTHER RELATED PARTIES**** 0.0 0.5 - 0.1 - -
TOTAL RELATED PARTIES 34.3 96.5 (2.6) 44.6 59.7 (177.9)
* The figure includes the company and its subsidiaries, associates or jointly controlled companies.
** The figure includes the company and its subsidiaries.
*** The figure includes the directors of Mediaset S.p.A. and of Fininvest S.p.A., their close family members and companies in which these persons
exercise control, joint control or significant influence or in which they hold, either directly or indirectly, a significant stake of no less than 20%, of the
voting rights.
**** The figure includes transactions with several consortiums that mainly carry out activities connected with the television signal transmission
operational management.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
52
Revenues and trade receivables due from associated entities mainly relate to the sales of television
advertising space. The costs and the related trade payables mainly refer to purchases of
television productions and broadcasting rights and to the fees paid to associates for the sale of
advertising space managed through exclusive concessions by Group companies.
The item other receivables/(payables) mainly refers to payables for loans and credit facilities due
to affiliate companies, intercompany current accounts and loans given to associates. The other
receivables due from Boing S.p.A. mainly relate to the remaining consideration due to R.T.I.
S.p.A. for the disposal of the business unit carried out on 1 April 2013.
The payables for loans and credit facilities due to other affiliates amounting to EUR 200.6
million mainly relate to contracts with Mediobanca (an associate of the Fininvest Group) and
refer to the draw down of the revolving facility with a term of 8 years granted by Mediobanca in
May 2011.
The main impacts on the consolidated cash flows generated by related-party transactions are
related to inflows of EUR 12.8 million from Fininvest S.p.A. as payment of the receivable for
which a hold harmless agreement had been signed on 5 March 2010, and outflows for the
acquisition of rights regarding the company Milan A.C. of EUR 7.7 million. During the half year
dividends were also received from associates and joint ventures for a total of €2.5 million.
Half Year Financial Report at 30 June 2013 – Explanatory Notes
53
8. Personal guarantees given and commitments
The overall amount of guarantees received, mainly bank guarantees, for receivables from third
parties totalled EUR 22.9 million (EUR 30.6 million at 31 December 2013). Of this amount EUR
16.3 million were issued by Mediaset España Group (EUR 25.1 million at 31 December 2013).
In addition, bank guarantees in favour of third party companies were issued for a total amount
of EUR 48.0 million (EUR 76.7 million at 31 December 2013). Of this amount EUR 41.7 million
were issued by Mediaset España Group (EUR 61.2 million at 31 December 2013).
The main commitments of the Mediaset Group can be summarised as follows:
commitments for the acquisition of television and movie broadcasting rights, totalling EUR
699.8 million (EUR 878.9 million at 31 December 2013). These future commitments relate
mainly to volume deal contracts of the Mediaset Group with some of the leading American
TV producers;
commitments for content and program rental contracts totalling EUR 855.5 million, of
which 36.1 to associates (EUR 241.2 million at 31 December 2013). The change mainly
relates to commitments for the purchase of the exclusive broadcasting rights on all
platforms for the Champions League for the years 2015-2016, 2016-2017, 2017-2018;
commitments for artistic projects, television productions and press agency contracts of
approximately EUR 112.4 million (EUR 123.6 million at 31 December 2013), of which EUR
2.2 million due to Related Parties;
commitments for digital broadcasting capacity services of EUR 214.8 million (EUR 239.5
million at 31 December 2013);
contractual commitments for the use of satellite capacity of EUR 97.2 million (EUR 108.0
million at 31 December 2013);
commitments for the purchase of new equipment, works and supplies for the companies’
head offices, multi-year rents and leases, and the supply of EDP services and commitments
to trade associations for the use of intellectual property rights totalling EUR 191.7 million
(EUR 163.1 million at 31 December 2013).
9. Movements resulting from atypical and/or unusual transactions
Pursuant to Consob communication no. DEM/6064296 of 28 July 2006 it is hereby stated that
in the first half of 2014 no atypical and unusual transactions were carried out by the Group as
defined by the above Communication.
for the Board of Directors
the Chairman
Half Year Financial Report at 30 June 2013 – Explanatory Notes
55
LIST OF THE EQUITY INVESTMENTS IN THE
CONSOLIDATED ACCOUNTING STATEMENTS AT 30 JUNE 2014
(values in EUR million)
Companies consolidated on a line-by-line basis Registered Office Currency Share capital
% held by the
Group (*)
Mediaset S.p.A. Milan EUR 614.2 -
Publitalia '80 S.p.A. Milan EUR 52.0 100.00%
Digitalia '08 S.r.l. Milan EUR 10.3 100.00%
Promoservice Italia S.r.l. Milan EUR 6.7 100.00%
Publieurope Ltd. London GBP 5.0 100.00%
R.T.I. S.p.A. Rome EUR 500.0 100.00%
Videotime S.p.A. Milan EUR 52.0 99.06%
Elettronica Industriale S.p.A. Lissone (MB) EUR 363.2 100.00%
E.I. Towers S.p.A. Lissone (MB) EUR 2.8 40.00%
Towertel S.p.A. Lissone (MB) EUR 22.0 40.00%
Società Assistenza Ripetitori Televisivi S.r.l. (S.A.R.T.) Trento EUR 0.1 40.00%
Medusa Film S.p.A. Milan EUR 120.0 100.00%
Taodue S.r.l. Rome EUR 0.1 100.00%
Mediashopping S.p.A. Rome EUR 10.0 100.00%
Mediaset Investment S.a.r.l. Luxembourg EUR 50.5 100.00%
Mediaset España Comunication S.A. (former Gestevision Telecinco S.A.) Madrid EUR 203.4 41.55%
Publiespaña S.A.U Madrid EUR 0.6 41.55%
Publimedia Gestion S.A.U. Madrid EUR 0.1 41.55%
Integracion Transmedia S.A.U. Madrid EUR 0.1 41.55%
Grupo Editorial Tele 5 S.A.U. Madrid EUR 0.1 41.55%
Telecinco Cinema S.A.U. Madrid EUR 0.2 41.55%
Conecta 5 Telecinco S.A.U. Madrid EUR 0.1 41.55%
Mediacinco Cartera S.L. Madrid EUR 0.1 56.16%
Premiere Megaplex S.A. Madrid EUR 0.1 41.55%
Sogecable Editorial S.L.U. Madrid EUR 0.0 41.55%
Sogecable Media S.L.U. Madrid EUR 0.0 41.55%
Joint control and affiliated companies Registered Office Currency Share capital
% held by the
Group
Agrupacion de interés Economico Furia de Titanes II A.I.E. Santa Cruz de Tenerife EUR 0.0 14.13%
Auditel S.r.l. Milan EUR 0.3 26.67%
Beigua S.r.l. Rome EUR 0.1 9.80%
BigBang Media S.L. (former Telecinco Factoria de Production, SLU) Madrid EUR 0.2 12.47%
Boing S.p.A. Milan EUR 10.0 51.00%
Capitolosette S.r.l. Milan EUR 2.9 48.96%
DTS Distribuidora de Television Digital S.A. (**) Madrid EUR 126.3 9.14%
Editoria Digital de Medios S.L. Madrid EUR 1.0 20.78%
Fascino Produzione Gestione Teatro S.r.l. Rome EUR 0.0 50.00%
La Fabrica De La Tele S.L. (former Hormigas Blancas Producciones S.L.) Madrid EUR 0.0 12.47%
Mediamond S.p.A. Milan EUR 1.5 50.00%
Megamedia Television S.L. Madrid EUR 0.1 12.47%
Nessma S.A. Luxembourg EUR 11.3 34.12%
Nessma Broadcast S.a.r.l. Tunis EUR 1.0 25.00%
Netsonic S.L Barcelona EUR 0.0 15.79%
Pegaso Television INC Miami (Florida) USD 83.3 18.16%
Producciones Mandarina S.L. Madrid EUR 0.0 12.46%
Titanus Elios S.p.A. Rome EUR 29.5 29.72%
Tivù S.r.l. Rome EUR 1.0 48.16%
Supersport Television S.L. Madrid EUR 0.1 12.47%
60 DB Entertaniment S.L. Barcelona EUR 0.0 12.47%
Equity investments held as "Available for sale" Registered Office Currency Share capital
% held by the
Group
Aprok Imagen S.L. Madrid EUR 0.3 1.27%
Ares Film S.r.l. Rome EUR 0.1 5.00%
ByHours Travel S.L. Madrid EUR 0.0 2.80%
Cinecittà Digital Factory S.r.l. Rome EUR 6.0 15.00%
Class CNBC S.p.A. Milan EUR 0.6 10.90%
Grattacielo S.r.l. Milan EUR 0.1 10.00%
Grupo Yamm Comida a Domicilio S.L. Madrid EUR 0.2 4.91%
Jade 1290 GMBH Berlin EUR 0.1 1.81%
Kirch Media GmbH & Co. Kommanditgesellschaft auf Aktien Unterföhring (Germany) EUR 55.3 2.28%
Radio e Reti S.r.l. Milan EUR 1.0 10.00%
Romaintv S.p.A. (winding-up) Rome EUR 0.8 9.68%
Sportsnet Media Limited George Town (Grand Cayman) USD 0.1 12.00%
X Content S.r.l. (winding-up) Rome EUR 0.1 100.00%
(*) Group’s stake calculated not considering parent companies’ own shares
(**) as at 30 June the equity investement is registered on the item Non current assets held for sale
Mediaset Group
Statement concerning the
Condensed Half-Year Financial Statements
in compliance with Art. 154 bis of
Italian Law Decree 58/98
Mediaset Group
Auditors’ review report on the
interim condensed consolidated
financial statements
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