Gruppo Editoriale L’Espresso
OLD MEDIA, CROSS MEDIA, MULTIMEDIA
September 2008

THE WORLD OF COMMUNICATION IS IN THE MIDST
OF A DEEP AND RAPID CHANGE
A TRUE EVOLUTIONARY STORM
Will an “old media” publisher be able to transform itself, matching
communication needs in the digital age in order to improve its
market share, grow and:
➡ Meet users’ needs
➡ Give value to advertisers, through useful, effective and
functional tools
➡ Attain satisfactory results for our shareholders
? 2 / 34

OUR PAST MAKES OUR FUTURE TRUSTWORTHY
SEVERAL TIMES IN THE PAST WE HAD BEEN GIVEN UP FOR DEAD
IN THE SEVENTIES IT WAS ANNOUNCED THAT THE BELLS
HAD TOLLED FOR NEWSPAPERS
THE NEWS OF OUR DEMISE PROVED TO BE GROSSLY
EXAGGERATED.... AFTER DEEP TRANSFORMATIONS AND TIMES
OF DIFFICULTIES
WE ARE STILL ALIVE AND KICKING, THANKS TO TWO KEY
FACTORS
 Economic growth and growth of the general population's cultural
needs
 No more linotype and hot lead but computers
3 / 34

THE DIGITAL REVOLUTION HAS GENERATED
 CELLULAR PHONES
 CABLE TV, SATELLITE TV, DIGITAL TERRESTRIAL TV
 THE INTERNET, THE MOTHER OF ALL REVOLUTIONS
ADDING NEW CHALLENGES BUT ALSO OPPORTUNITIES
WE BELIEVE WE HAVE WHAT IS NEEDED
TO PULL THROUGH AND EMERGE BIGGER, STRONGER
AND MORE PROFITABLE
4 / 34

IT’S NOT THE SAME OUTLOOK FOR EVERYBODY
THE WEAKNESS OF SOME “OLD MEDIA”
IF CONTENT BELONGS TO SOMEONE ELSE AND THE MEDIUM
IS NOT IN ITSELF A “SOURCE”
 “DIRECTORIES”  RECORD COMPANIES  BOOK PUBLISHERS
PEOPLE BUY THE BOOK, THE RECORD, NOT THE PUBLISHER’S
BRAND
THE MIDDLE MAN BETWEEN THE AUTHOR AND THE MARKET,
THE PUBLISHER BECOMES REDUNDANT AND EXPENDABLE
in dus tr ia l an d d is tr ibu t io n pr oc e s s
author record company record user
book publisher book
napster / amazon mp3/reader user
5 / 34

THE STRENGTH OF OUR “OLD MEDIA”
NEWSPAPERS, RADIO, TV AND MOVIES
THEY ARE THE “SOURCE” OF THEIR OWN CONTENTS
News, comments, pictures and sounds: commodities shaken (not
stirred) via
➡ Peculiar and original creative process
➡ Unique and hard to reproduce value: title, logo, brand
Newspaper editorial staff
Radio authors production
audience
TV Network artists
distribution
Cinema artists
Entrance barrier Internet
TRUST RELATIONSHIP BETWEEN AUDIENCE AND BRAND
THE BRAND RULES
6 / 34

EVEN IF COMPETITION
IN ADVERTISING
TV and radio
HAS GOT SATELLITE
AND
streaming
podcast
CABLE TV
MORE INTENSE
NON-NEWS
WEBSITES
Terrestrial TV
and radio
Pie of advertising growing
but in search of newer
and more effective tools
Newspapers on PR, points of sale, etc.
the Internet
Telephone
Newspapers
Free press
7 / 34

AN ITALIAN PECULIARITY: CLASSIFIED ADVERTISING
One of the major elements in the printed media’s crisis in America and in the
other countries is the slump of classified ads, which have moved to the Web
 In Italy classified ads have always had limited relevance (different hiring
practices, mainly in the public sector, small real estate market).
 There has already witnessed and overcome a crisis in Italy, in the 70’s,
caused by free ads papers (like Secondamano, Porta Portese, etc.)
Structure of daily newspapers revenues in 2000
Italy USA
circulation 40% 18%
national ads 34% 13%
local ads 13.4% 36%
classified ads 12.6% 33%
100% 100%
8 / 34

PUBLISHER’S FUNDAMENTAL GOALS
➡ EDITORIAL PRODUCTS WHICH ARE CONSISTENTLY IN TUNE
WITH THE CONSUMER
➡ GAINING “AUDIENCE”
➡ PROPOSING ONESELF TO ADVERTISERS
(NON-EDITORIAL EXCEPTIONS: BILLBOARDS, MOVIES, WEB)
newspapers
radio
TV Ads
Internet
readers
viewers Advertisers
Audience listeners
users
9 / 34

THE ESPRESSO GROUP AND ITS STRONG POSITION
■ la Repubblica is the the most read newspaper in Italy, both in its print and
web versions
■
■
■ Websites reaching 13.3 mln unique users: Repubblica.it is the number one
news website in Italy
■
■
■ A network of 16 regional newspapers that serves the wealthiest and most
highly developed areas in Italy
■ Leading titles (both for circulation and visibility)
■ Radio stations (Radio DeeJay ranks high among privately owned radio
networks) and TV networks and has been syphoning away audience from
big and stale networks
■ Synergy among the different media: the Espresso Group has been a mature
and fully integrated cross-media group for a long time, with a presence on all
the old media and the new ones (including mobile), which has no peers in
Italy.
■ One out of two Italians connects to our media at least once a week
10 / 34

STARTING FROM ITS PRESENT POSITION
THE ESPRESSO GROUP IS CHANGING AND MORPHING
into a multimedia publishing house strongly tied to its brands
A MULTIMEDIA
BRANDED CONTENT COMPANY
Each title develops its contents on the new platforms, according to the
peculiarity of each brand
From the dual model (print+ads/audio+ads) to the multiplatform model
(print+sound+audio+video+mobile+ads)
11 / 34

A MULTIMEDIA BRANDED CONTENT COMPANY
FROM THE ORIGINS TO THE NEAR FUTURE
La Repubblica system: quality news and comments
No. 1 among “influential” adults
Radio Add-ons Venerdì
TV
Salute
Viaggi
La Repubblica XL
“D”
repubblica.it
E-ink Affari &
Finanza
Mobile phones
New Platform
12 / 34

A MULTIMEDIA BRANDED CONTENT COMPANY
FROM THE ORIGINS TO THE NEAR FUTURE
The appeal of “local”: serving communities in over
50 towns and districts
Local Newspapers ➡ Internet, aiming to develop classified
ads and new direct sale methods
Local Editions of la Repubblica ➡ Websites open to citizens
contributions become the new
“agora” of local communities
parma.repubblica.it : new local edition online only
13 / 34

A MULTIMEDIA BRANDED CONTENT COMPANY
FROM ITS ORIGINS TO THE FORSEEABLE FUTURE
Radio and TV:quality entertainment
No. 1 among the most coveted market, young people
DJ TV
RDJ Capital m2o
DJ chiama Italia Satellite TV
the radio
becomes TV Internet (broad band)
All Music Mobile phones
TV
14 / 34

NEWSPAPERS, RADIO, TV
ONE ON TWO ITALIANS CONNECTS TO OUR MEDIA
FROM 1999 TO 2007 ITALIAN PEOPLE WHO, IN THE AVERAGE
WEEK, READ, LISTEN, WATCH AND CONNECT TO ONE OF THE
GROUP’S MEDIA, INCREASED FROM 22 TO 32 MILLION
32,231
10,034
22,190 31.1%
6,946
Aged > 44
31.3%
Aged 14 to 44 15,244 22,197
68.9%
68.7
15 / 34

READERS OF OUR PRINT AND WEB TITLES
ARE INCREASING
Readers increased, in the average week, from 1999 to 2007, from 10 to
13 mln, of which 3 mln only or in part on the internet
Aged 14 to 44 Aged > 44
Total 8,055
1,924
Total 5,898
648 200
+41.6 200
720
Internet
Both
5,917 Newspapers
5,483 4,978
4,164
1999 2007 1999 2007
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COMPETITIVE FRAME: HOW OUR SITES ARE RANKING
TOP 20 NEWS RADIO TV
NETVIEW NETVIEW NETVIEW
1 Google 20.1 1 La Repubblica 5.6 1 Mediaset.it 3.1
2 Microsoft 13.7 2 Corriere.it 4.6 2 Rai 2.7
3 Telecom 10.9 3 Libero News 3.0 3 Sky 1.2
.... 4 Il Sole 24 ORE 2.2 4 Mediaset Tv 1.0
8 Espresso 7.0 5 ANSA 1.8 5 Repubblica Tv 1.0
.... 6 Google News 1.7 6 Rai Tv 0.8
10 RCS 6.5 7 Tiscali News 1.6 7 Corriere Tv 0.8
.... 8 La Stampa 1.4 8 Radio Deejay 0.6
12 Seat PG 5.4 9 Yahoo! News 1.2 9 Radio Rai 0.6
13 DADA 5.0 10 Alice News 1.1 10 Radio 105 0.5
14 Tiscali 4.7 11 Rai Info 0.9 11 MTV.it 0.5
21 Mediaset 3.2
....
28 Rai 2.7 All Music 0.1
(Source: Italia- Netview June 08. Users/million)
17 / 34

COMPETITIVE FRAME: HOW OUR TITLES ARE RANKING
Average (daily) .000 Readers Circulation
La Repubblica 3,069 615.4
Espresso Group Local Dailies 3,150 442.5
Corriere della Sera 2,906 679.8
La Gazzetta dello Sport 3,706 357.3
La Stampa 1,449 310.5
Il Messaggero 1,313 202.0
Il Sole 24 Ore 1,122 342.4
Il Mattino 719 72.5
Il Gazzettino 656 94.7
La Gazzetta del Mezzogiorno 549 58.6
Il Giornale 654 201.6
Il Secolo XIX 528 105.7
Il Giornale di Sicilia 530 63.1
Unione Sarda 398 65.9
L'Unità 270 45.5
Avvenire 246 101.5
Il Tempo 168 57.8
Others (excluding free press) 10,506 2,426.9
Total 31,939 6,243.7
Our Share (Paid Circulation) 19,5% 16,9%
Our Share (estimate-including Free Press) 16,3% 12,1%
(Source: FIEG December 2007; Audipress 2008)
18 / 34

THE ESPRESSO GROUP IS CHANGING
2001-2007 revenues: yearly variation
2001 2007
€923mln €1,098mln
€mln
Total turnover Circulation Advertising Add-ons
19 / 34

THE ESPRESSO GROUP IS CHANGING
Internet advertising revenues of the Espresso Group
(consolidated “pro-forma”)
Online % on
total
FY 2006 FY 2007 1H 2008 advertising
(€mln)
Repubblica 10.4 17.7 11.2 5.8%
(of which Repubblica TV) (1.1) (1.1) (1.2)
Espresso 0.3 0.5 0.4 1.3%
Local newspapers (including Free Press) 0.2 0.3 0.5 0.4%
Radio and TV 2,0 3.0 1.2 3,4%
Kataweb sites 2.6 3.4 1.7
TOTAL DISPLAY 17.2 24.9 15.0 4.5%
Online classified ads (whole Group) 1.6 3.4 2.1 4.6
TOTAL ADVERTISING (excluding intercompany) 17.2 28.3 17.2 4.6%
On line services revenues 2.5 2.2 1.1
Mobile services revenues 1.8 2.7 0.7
TOTAL REVENUES 21.5 33.2 19.0
EBITDA (2.6) 2.4 2.6
EBIT (3.0) 1.7 2.2
20 / 34

THE ESPRESSO GROUP IS CHANGING
Contribution to our REVENUES and EBIT will change as follows
2007
REVENUES Radio e TVTV
Radio and
Magazines (€109mn)
(!109mn)
(€62mn)
Periodici 10.8
6.1% 10,8% Add-ons
(!62mn) Add-ons
6,1% (!138mn)
(€138mn)
13,7%
13.7%
Stable or slightly decreasing circulation
Local
Quotidiani Changes
newspapers
locali
(€267mn)
(!267mn)
26.4% Stable or slightly decreasing add-ons
26,4%
over the Against a negative trend of print
Repubblica
Repubblica
(!435mn) 43.1%
advertising…
(€435mn)
43,1%
next 5
EBIT … steep growth of Internet, classified
and context advertising
Radio and e TV
Radio TV
(€37mn)
(!37mn)
years
23.0%
23,0%
Magazines
Periodici Strong growth of revenues from
(€1mn)
(!1mn) Add-ons
Add-ons
0.9%
0,9% (€39mn)
(!39mn)
24.7%
value-added online and mobile
24,7%
services
Local
Quotidiani
newspapers
locali
(€55mn)
34.5%
(!55mn)
Cost improvement actions to limit
34,5%
Repubblica
inertial growth of operating costs
Repubblica
(!27mn)
(€27mn) 16.9%
16,9%
21 / 34

IN THE MEANTIME…
The first half 2008 has outlined all the problems of the sector:
1H 2007 1H 2008
Stable circulation
Circulation revenues (including add-ons) 212 207 Add-ons with
slightly lower
revenues but with
better margins
Advertising 336 323
Elections impact
+ economic cycle
Ebit 102 75
The impact of the revenues vs. costs on the result has required
the start-up of several rebalancing actions
22 / 34

IN THE MEANTIME… COST IMPROVEMENT ACTIONS
Actions affecting both 2008 and 2009 and following years have
been started:
Personnel costs Freezing of turn-over
Early retirements for over 100 employees
Other stronger actions
Industrial costs Insourcing of printing facilities (Milan and Bologna)
Introduction of Computer to Plate
Optimization of runnings/distribution of la Repubblica
Reduction of the size of newspapers and magazines
Cost efficiencies on printing materials
Reduction of pagination of newspapers and magazines
23 / 34

Annex
24 / 34

Repubblica.it jun-08 vs jun-07
Monthly users 10,903,935 +17.5%
Page views 533,802,719 +31.8%
home page 173,721,221 +37.9% Cinema Restaurants
Repubblica.it
June 2008
2007 Advertising revenues
(€k) Users (daily) 1.2mln
Repubblica.it 19,792 Page views 21.5mln
The newspaper updated by the minute! (free access)
You can download in pdf format the newspaper with the latest
Source: Site Census news of Repubblica.it, you can print it, take it with you and25 / 34
read
it whenever and wherever you like

REPUBBLICA RADIO TV
Radio and TV
Monthly users jun -08 vs jun -07
Radio 1,204,689 +7.8%
All Music 157,704 -11.7%
Repubblica Radio & TV
June 2008
Users (daily) > 100 thousand
REPUBBLICA READER (MICROSOFT VISTA):
ALSO ON DT TV PRINT NEWSPAPER IN A FORMAT FOR MOBILE OR
COMPUTER DISPLAYS: SAME CONTENTS
ON DEMAND
190,000 videos
downloaded in the
average day in
June
Source: Site Census
26 / 34

seidimoda june-08 vs jun-07 seidimoda
Monthly users 653,366 +60.7% June 2008
Users (daily) 51 thousand
Page views 333 thousand
Source: Site Census
27 / 34

Local editions of la Repubblica Local newspapers
Monthly users june-08 vs june-07 Monthly users june-08 vs june-07
1,600,925 > +100% 1,343,917 >+100%
Source: Site Census
28 / 34

A new product line:
classified ads online
JOB SEARCH AND RECRUITING ADS Advertising revenues
Total Internet classified ads
2007 vs. 06
(€k) 3,912 +109%
Total print classified ads
(including death notices)
2007 vs. 06
(€k) 80,764 +6.7%
Source: Site Census
29 / 34

PODCAST AND MOBILE
AT THE BORDERS WITH THE FUTURE:
PODCAST: FRAGMENTATION OF CONTENTS ON COMPUTER,
MOBILE, I-POD, ETC., SETS FREE FROM THE
RESTRAINTS OF LIVE TRANSMISSION AND ALLOWS
TO EXTEND BRANDS ON NEW PLATFORMS
MOBILE: PODCAST + OTHER TAILORED SERVICES
30 / 34

208,000
downloaded in June
877,000
downloaded in June
Internal source
31 / 34

DEEJAY CLUB:
ACCESS TO MOBILE PORTAL RDJ
DOWNLOAD AUDIO FILES OR
JINGLES (WITH BUONGIORNO)
REPUBBLICA SMS LA BUONA STELLA
REPUBBLICA.IT FOR VODAFONE LIVE AND WIND I.MODE
Services revenues
Total online and mobile
2007 vs. 06
(€k) 4,924 +14.6%
The Guide of restaurants
on mobiles
Source: Site Census 32 / 34

Consolidated financial results 1997-2007
Behind numbers there are 10-years changes
FY FY FY FY FY FY FY FY
(€ mln) 1997 1999 2000 2001 2003 2005 2006 2007
Revenues 696.1 848.1 952.7 923.1 1,051.1 1,079.9 1,102.6 1,098.2
EBITDA 85.9 143.7 125.9 130.7 231.5 222.2 204.4 223.4
EBITDA (before paper and employee
termination indemnity contributions) 85.9 143.7 125.9 130.7 231.5 207.1 204.4 211.8
EBIT 65.6 112.9 85.0 89.8 190.3 177.5 163.3 180.6
EBIT (before paper and employee
termination indemnity contributions) 65.6 112.9 85.0 89.8 190.3 162.4 163.3 169.0
PROFITABILITY INDEXES
EBITDA 12.3% 16.9% 13.2% 14.2% 22.0% 20.6% 18.5% 20.3%
EBITDA Margin (before paper and employee
termination indemnity contributions) 12.3% 16.9% 13.2% 14.2% 22.0% 19.2% 18.5% 19.3%
EBIT 9.4% 13.3% 8.9% 9.7% 18.1% 16.4% 14.8% 16.4%
EBIT Margin(before paper and employee
termination indemnity contributions) 9.4% 13.3% 8.9% 9.7% 18.1% 15.0% 14.8% 15.4%
Since 2004 the Group’s financial results have been reclassified in compliance with the new International Financial Reporting
Standards. Data from 1997 to 2003 have been adjusted to eliminate the amortization of titles and radio and TV frequencies,
to reintroduce at the same time the historical cost, thus to benefit the Shareholder’s Equity.
33 / 34

Consolidated results of the 1997-2007 “core business”
The “core business” has been growing since 2001
EXCLUDING ADD-ONS, KATAWEB (though with the internet), PAPER AND EMPLOYEE TERMINATION
INDEMNITY CONTRIBUTIONS
FY FY FY FY FY FY FY FY
(€ mln) 1997 1999 2000 2001 2003 2005 2006 2007
Revenues 660.9 807.3 867.2 843.6 814.4 860.1 884.0 935.0
EBITDA 81.1 145.8 184.7 147.1 150.7 151.0 150.6 172.5
EBIT 60.9 118.4 152.9 114.0 116.0 107.1 110.2 130.6
PROFITABILITY INDEXES
EBITDA Margin 12.3% 18.1% 21.3% 17.4% 18.5% 17.6% 17.0% 18.4%
EBIT Margin 9.2% 14.7% 17.6% 13.5% 14.2% 12.4% 12.5% 14.0%
34 / 34