Press Release: Results at 30 June 2019 approved

Press release: Meeting of the Board of Directors of RCS MediaGroup

Results at 30 June 2019 approved1

Consolidated revenue € 475.5 million

EBITDA € 84.1 million2, € 71 million net of IFRS 16 impact

Positive EBIT of € 58.32 million, € 56.9 million net of IFRS 16 impact

Profit of € 38.4 million, € 38.8 million net of IFRS 16 impact

Net Financial Debt of € 177.5 million (€ -10.1 million vs. 31.12.2018 after distribution of

dividends for approximately € 31 million)

Milan, 31 July 2019 - The Board of Directors of RCS MediaGroup met today under the chairmanship of Urbano Cairo to review and approve the consolidated results at 30 June 2019.

Income statement (€ millions)	30/06/2019	30/06/2018
Consolidated revenue	475.5	503.6
EBITDA2	84.1	83.1
EBIT2	58.3	65.8
Profit	38.4	45.4

Statement of financial position (€ millions)	30/06/2019	31/12/2018
Net financial debt1	177.5	187.6

Against a backdrop of persisting uncertainty and shrinking core markets, the advertising market in Italy and Spain in particular, which posted a lower-than-forecast performance, with an impact on revenue in the period, in first half 2019, the Group continued to generate highly positive margins and cash flows and achieved its targets to gradually reduce financial debt (which fell by € 10.1 million versus end 2018 after

1 For the definitions of EBITDA, EBIT, net financial debt and total net financial debt, reference should be made to "Alternative

performance measures" in this press release.

2 The half year financial statement at 30 June 2019 incorporates the new IFRS 16 - Leases, which came into force as from 1 January 2019.

For the adoption of the new standard, the Group followed the modified retrospective transition method (i.e. with the cumulative

effect of the adoption recognized as an adjustment to the opening balance of retained earnings at 1 January 2019, without restating comparative information). The income statement figures for first half 2019, therefore, cannot be directly compared with the corresponding amounts of the same period of the prior year.

The application of the new standard at 30 June 2019 resulted in:

• the recognition under property, plant and equipment of rights of use on leasing assets for a total of € 172.9 million;
• the recognition of a financial liability (finance payables from leases under IFRS 16 previously classified as operating leases) of approximately € 189.4 million;
• the reversal of lease payments of € 13.1 million, offset by higher depreciation and amortization of € 11.7 million and higher financial expense of € 1.8 million; with an impact on EBITDA, EBIT and the result for the period of € +13.1 million, € +1.4 million and € -0.4 million, respectively;
• a decreasing impact on initial equity of € 9.2 million, net of the accounting effects of the tax component, the latter concurrently recorded under non-current financial assets and other assets of € 3.5 million.

distributing dividends for approximately € 31 million).

Group consolidated net revenue at 30 June 2019 amounted to € 475.5 million, down by € 28.1 million versus 30 June 2018. The change is attributable to publishing revenue of € -12.7 million, advertising revenue of € -8.2 million and sundry revenue of € -7.2 million versus the same period of 2018. Digital revenue, which amounted to approximately € 80.1 million, grew by approximately 4% versus the same period of 2018, with a percentage on total revenue of 16.8%.

Advertising revenue in the first half of the year totaled € 197.9 million versus € 206.1 million in the same period of 2018. The decrease was due mainly to Unidad Editorial (€ -6.4 million3), Newspapers Italy (€ -4.8 million3), and Magazines Italy (€ -1.6 million3). Total advertising sales on online media amounted to €

61.8 million, up by approximately 3.7% versus the same figure of first half 2018. In Spain, advertising sales on online media accounted for approximately 50.5% of total net advertising revenue and grew by 6.8% versus the first half 2018.

Publishing revenue amounted to € 199.8 million versus € 212.5 million in the first six months of 2018. The decrease is due to the drop in sales of add-on products (€ -4.7 million in Italy and € -0.8 million in Spain versus first half 2018) and to the drop in circulation in Italy and Spain. In the newsstands channel, the dailies Corriere della Sera, La Gazzetta dello Sport (ADS January-May2019), Marca and Expansión continue to lead their respective segments, while El Mundo was once again the second most popular general daily in Spain (OJD). In Italy in particular, as regards the comparison with the market, the newsstands channel (channels required by law) performed better, with both Corriere della Sera, -4.8% versus the market's - 7.6%, and La Gazzetta dello Sport, -4.1% versus the market's -7.2% (ADS January-May).

At the end of June, the total active customer base for Corriere della Sera (digital edition, membership and m- site) was 143 thousand subscribers, up by 14% versus the same period of 2018.In Spain, the figures published by EGM (Estudio General de Medios: latest update June 2019) confirm Unidad Editorial's leadership in the daily newspapers segment; through its brands, the daily reaches approximately 2.5 million readers/day, approximately 400 thousand readers more than its main competitors.

Efforts continued on the development of publishing content, the ongoing enrichment and strengthening of the RCS Group's range of publishing products, and the enhancement of the sporting events portfolio. In Italy, the period saw the restyling of Amica (out on newsstands on 19 February) and the new Corriere Milano (6 March); the Motors column of La Gazzetta dello Sport was expanded (7 March), economia.corriere.it, the new website of the business-related section of daily Corriere della Sera was launched (25 March), Corriere del Mezzogiorno-Pugliae Matera made its debut (26 March), while 28 March saw the kick-off of the activities of RCS Academy, the Business School launched at the beginning of 2019. The new, revamped Gazzetta dello Sport, with its improved graphics and content, debuted on 7 May, followed by the new release of the website gazzetta.it (8 May). Additionally, the new Corriere Salute was launched (9 May), out every week on Thursdays, followed by the debut of the restyled weekly analysis magazine 7 (10 May). Lastly, the mobile site of Corriere della Sera was renewed with a view to greater accessibility and readability.

In Spain, the period saw the creation of BeStory, a digital content production area for social networks also involving marketing influencers, the restyling of Telva (20 February) and of the El Mundo website (4 March). May saw the launch of UEtv, an audiovisual production structure, set up with the aim of enhancing multimedia content for both the Group and the external market, and the revamped format and content of Metropoli, supplement of El Mundo. The period also witnessed the launch of Expansion Juridico, the weekly supplement of Expansion (3 June), and Marca Claro USA (10 June), the portal established from the partnership between Marca and Claro already operating in Argentina, Colombia and Mexico, which lands in the USA too to address Spanish users, offering them news on all the most popular sports in the United States.

As a result of the adoption of IFRS 16 from 1 January 2019, the income statement amounts for first half 2019 are not immediately comparable with the corresponding amounts for the same period of the prior year.

EBITDA amounted to € 84.1 million. Net of the effects of the new standard, EBITDA, equal to € 71 million, fell by € 12.1 million - due also to the effect of net non-recurring expense (€ -1.2 million) - versus

3 Includes advertising revenue generated through the Group's ad agency.

• 83.1 million in the first six months of 2018, when the results had been positively affected by the significant contribution of the "Giro d'Italia's Grande Partenza" from abroad. The commitment to efficiency produced, in the first six months of 2019, benefits of € 12.7 million, of which € 5.9 million in Italy and € 6.8 million in Spain.

The table below shows a breakdown of the trend in revenue and EBITDA before IFRS 16 (i.e. net of the effects of the new IFRS 16) relating to each business segment.

(€/millions)				30/06/2019				30/06/2018
				EBITDA	% of				% of
			Revenue	before		Revenue	EBITDA
			revenue		revenue
				IFRS 16
Newspapers Italy			208.5	27.5	13.2%		220.5	33.3	15.1%
Magazines Italy		42.5	2.6	6.1%		45.4	3.3	7.3%
Advertising and Sport		163.6	27.6	16.9%		172.5	33.6	19.5%
Unidad Editorial		146.1	22.7	15.5%		155.2	22.2	14.3%
Other Corporate Activities		16.4	(9.4)	n.s.		10.8	(9.3)	n.s.
Other and eliminations	(101.6)	0.0	n.s.	(100.8)	0.0	n.s.
Consolidated		475.5	71.0	14.9%		503.6	83.1	16.5%

EBIT in the first half of the year amounted to € 58.3 million. Excluding the effects of IFRS 16 (€ 1.4 million), the figure drops by € 8.9 million, due to the EBITDA trend, only partly offset by lower amortization and depreciation (€ 3.2 million).

Group profit in first half 2019 amounted to € 38.4 million (profit of € 45.4 million at 30 June 2018) and basically reflects the trends explained above. Excluding the effects of IFRS 16, profit would amount to € 38.8 million

Net financial debt stood at € 177.5 million (€ -10.1 million versus 31 December 2018). The boost from ordinary operations, amounting to a positive € 51.1 million, more than offset the payment of dividends (approximately € 31 million) and the outlays for capital expenditure made during the six months (€ 8.1 million), as well as the amount paid for net non-recurring expense. Overall, in the period from end July 2016 to June 2019, RCS achieved a significant reduction in net debt of over € 248 million, together with a sharp rise in margins, with a clear, positive effect on the financial structure of the Group.

Total net financial debt, which includes financial payables from leases pursuant to IFRS 16 (mainly property leases), amounting to € 189.4 million, stood at € 366.9 million.

Business outlook

Against a backdrop of persisting uncertainty and shrinking core markets, the advertising market in Italy and Spain in particular, which posted a lower-than-forecast performance, in first half 2019, the Group continued to generate positive margins and cash flows and achieved its targets to gradually reduce financial debt.

In consideration of the actions already implemented and those planned and in the process of being defined to maintain and develop revenue, as well as for the ongoing pursuit of operating efficiency, given the absence of unforeseeable events at this time, the Group confirms its target of achieving, also in the second half of 2019, a further significant reduction in net financial debt and marginality levels basically in line with those recorded in 2018.

Developments in the overall economic climate and in the core segments could, however, affect the full achievement of these targets.

***

Under paragraph 2, article 154-bis of the Consolidated Finance Law (TUF), Roberto Bonalumi, in his capacity as Financial Reporting Manager, attests that the accounting information contained herein is consistent with the Company's document results, books and accounting records.

***

RCS MediaGroup is one of the leading multimedia publishing groups, active mainly in Italy and Spain across all publishing segments, spanning from newspapers to magazines and books, from TV to new media and training, as well as being one of the top players in the advertising market, organizing iconic events and prominent sports formats such as

the Giro d'Italia. The RCS Group publishes the daily newspapers Corriere della Sera, La Gazzetta dello Sport, El Mundo, Marca and Expansion, and numerous magazines, the most popular including Oggi, Amica, Io Donna, 7 and Telva.

For further information

RCS MediaGroup - Investor Relations

Arianna Radice - [phone] - [phone]- [e-mail]

RCS MediaGroup

Reclassified consolidated income statement

(Unaudited figures)

(€/millions)	30 June 2019	%	30 June 2018	%	Difference	Difference
	(1)
	A		B		A-B	%
Revenue	475.5	100.0	503.6	100.0	(28.1)	(5.6%)
Publishing revenue	199.8	42.0	212.5	42.2	(12.7)	(6.0%)
Advertising revenue	197.9	41.6	206.1	40.9	(8.2)	(4.0%)
Other revenue (2)	77.8	16.4	85.0	16.9	(7.2)	(8.5%)
Operating costs	(253.1)	(53.2)	(281.8)	(56.0)	28.7	10.2%
Personnel expense	(135.9)	(28.6)	(135.1)	(26.8)	(0.8)	(0.6%)
Provisions for risks	(1.6)	(0.3)	(2.9)	(0.6)	1.3	44.8%
Allowance for impairment	(1.1)	(0.2)	(1.3)	(0.3)	0.2	(15.4%)
Share of profits (losses) of equity-accounted investees	0.3	0.1	0.6	0.1	(0.3)	(50.0%)
EBITDA (3)	84.1	17.7	83.1	16.5	1.0	1.2%
Amortization of intangible assets	(8.3)	(1.7)	(11.2)	(2.2)	2.9
Depreciation of property, plant and equipment	(5.5)	(1.2)	(5.8)	(1.2)	0.3
Amortization of rights of use on leased assets	(11.7)	(2.5)	0.0	0.0	(11.7)
Depreciation of investment property	(0.3)	(0.1)	(0.3)	(0.1)	0.0
Other impairment losses on non-current assets	0.0	0.0	0.0	0.0	0.0
EBIT (3)	58.3	12.3	65.8	13.1	(7.5)
Financial income (expense)	(8.2)	(1.7)	(10.6)	(2.1)	2.4
Other income (expense) from financial assets/liabilities	0.0	0.0	1.5	0.3	(1.5)
Profit (loss) before tax	50.1	10.5	56.7	11.3	(6.6)
Income tax	(11.5)	(2.4)	(11.2)	(2.2)	(0.3)
Profit (loss) from continuing operations	38.6	8.1	45.5	9.0	(6.9)
Profit (loss) from assets held for sale and discontinued oper	0.0	0.0	0.0	0.0	0.0
Profit (loss) before non-controlling interests	38.6	8.1	45.5	9.0	(6.9)
(Profit) loss attributable to non-controlling interests	(0.2)	(0.0)	(0.1)	(0.0)	(0.1)
Profit (loss) for the period for the Group	38.4	8.1	45.4	9.0	(7.0)

1. The adoption of IFRS 16 as from 1 January 2019, without restating the balances at 30 June 2018, in first half 2019 resulted in the reversal of lease instalments of € 13.1 million, offset by higher amortization and depreciation of € 11.7 million and higher financial expense of € 1.8 million; with an impact on Group EBITDA, EBIT and the net result for the period of € +13.1 million, € +1.4 million and € -0.4 million, respectively.
2. Sundry revenue includes primarily revenue for television activities, the organization of events and exhibitions, sales of customer lists and boxed sets and, in Spain, for betting activities.
3. For the definitions of EBITDA and EBIT, reference should be made to "Alternative Performance Measures".