Consolidated profit and loss statement

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Public disclosure pursuant to Consob Resolution n.11971 of 14 may 1999

Approved by the Board of Directors

the Report on Consolidated Operating performance 2004

Revenues EUR 99.8 million

Operating gross margin at EUR 8.6 million

Dividend EUR 0,010 per share

Advertising: +15% in the first two and half months of 2005

Milan, 24 March 2005

Class Editori’s Board of Directors, presided by Professor Victor Uckmar, met earlier today to review the statements of the publishing house and the Consolidate report as from 31 December 2004.

Consolidated profit and loss statement

The group’s revenues have grown from EUR 98.2 to EUR 99.8 million (+1.6%), despite the low activity on financial markets and the persistent economical stagnation.

The results have been determined by the advertising revenues growth (+7.2%), which increased from EUR 42.3 to EUR 45.4 million, and by the subscribers revenues (+4.4%), which went from a total of EUR 34.1 to EUR 35.6 million.

During this difficult setting, the Company has followed successfully a cost containment process started in 2003, and on a like-for-like basis (excluding Telesia Sistemi, with cost for EUR 5 million) a 4% saving has been obtained, despite the start up of new initiatives in the corporate TV sector and the launch of the new TV channel Class News.

The gross margin amounted to EUR 8.653 million (8.612 in 2003), with incidence on the revenues of 8.6%. The operating profit has been negative with EUR 701 thousand (- 124 thousand in 2003).


Profit before taxes was positive at EUR 1.026 million (versus 1.073 million in 2003); after taxes for EUR 2.035 million and after minority interests, the total is negative with an amount of EUR 798 thousand (+175 thousand same period 2003).

The net financial situation goes from a total third parties indebtedness of EUR 0.8 million to -0.25, with an improvement to EUR 0.55 million. Such variation represents the indebtedness improvement in short term towards banks and other investors.

To this result, contributed the consolidation with the entire method, for the first year, of the subsidiary Telesia Sistemi Spa. The company, closing with revenues of EUR 6 million, is leader in Video communication system and operates in the main Italian airports and in the Milan underground network.

Without Telesia’s consolidation, the advertising revenues would have been lower than in 2003 at 6.7%, caused by the collapse of advertising investments in the financial sector.

Group’s results

Class Editori Spa closed the year with a generated turnover of EUR 43.1 million (45.2 million in 2003). The net profit amounted to EUR 383 thousand (EUR 1.292 million in 2003).

Dividend and own shares repurchase

The Board of Directors has decided to propose the distribution of a dividend equal to EUR 0,010 per share. The dividend will be paid the 9th of May 2005, versus removal of the n.8 coupon, that will happen on the date decided by the Italian Stock Exchange calendar.

At the same time the Board of Directors has deliberated to use the power granted by the assembly to repurchase its own shares.

Review of Business segment

Newspapers and agencies – The segment generated revenues for EUR 29.157 million (EUR

31.431 million in 2003) and a contribution margin equal to 41.3% of revenues (43.6% in 2003).

Periodicals – The segment generated revenues equivalent to EUR 21.806 million (22.901 in

2003), with a contribution margin of 14.4% the profit (12.6%, in 2003).


Electronic Publishing – Revenues generated were EUR 24.4 million (25.3 million in 2003),

with a contribution margin from 41.7 % to 42%.

Professional services – The area generated revenues for EUR 7.632 million versus EUR

8.879 million in 2003. The contribution margin was 0.9% (7.6% in 2003).

Television and Radio – The revenues in the segment increased 65%, from EUR 9.398

million in 2003 to EUR 15.562 million, with a contribution margin that increased from 19.1% (2003) to 21.9% of the revenues.

Main events in 2004


Regarding the trend of the main headings, Mf-Milano Finanza had a circulation of 110,317 copies (Ads data average in the last year), versus 112,250 in 2003. As from 25 September Mf

Fashion has been deeply renewed, as first luxury and fashion daily, in the graphics and contents. Class average circulation was equal to 73.621 copies (78.000 in 2003 – Adsv data). The

monthly Gentleman had a further increase in advertising revenues; interest for the magazine by foreigners increased following the Spanish edition, published by Prisa, first publisher in the country. Agreements with other two foreign publishers are nearing conclusion.

After 30 September Circuits’s publication started, the magazine dedicated to the winning technologies, at newsstands (contemporaneously) every 15 days together with Mf/Milano Finanza and ItaliaOggi. Circuits offers companies the chance to communicate with a target of 500 thousand readers with decisional power on technological purchases.

Electronic Publishing / Corporate TV

In September Class Editori and Telecom Italia signed their agreement for the joint provision of Corporate TV services, intended for the banking and financial sector. The publishing company already had agreements with Gruppo Banca Intesa and Banca Popolare di Vicenza for the realisation of WebIntesa TV and BPVI Channel, the two banking group’s TV channels. Completing the picture of arrangements for corporate TV by the publishing Company, is the agreement with Banca Generali for the realisation of BG Channel.


The Corporate TV business, sector in which the company boasts a leadership, confirmed by the last signed agreements, foresees in the next months a strong activity growth and development.

Summoning of Board meeting and extraordinary Board meeting

The Board meeting has been called in ordinary and extraordinary sessions for the 28th April 2005 at 9 am, at the office of the Company in via Burigozzo n°5, and if needed at the same location and time on May 2.

The meeting will deliberate upon:

Board meeting:

Consolidated Operating statements as for 31.12.2004 and Board of Director’s Report, Board of Unions and Review Company. Inherent and consequent decisions;

Proposal of purchase or placement own shares.

Extraordinary Board meeting:

Modification of the statute article number 5 and 6 in receipt of the new legislation that relates the exclusion of option rights in presence of capital increases up to 10% of the pre-existing capital and subsequent proxy to the Board of Directors as per 2443 of the Italian Civil Code

Predictable management evolution

In the first months of the year (January – mid March) the publishing company’s advertising trend has given very positive signals with increases superior to 15% on the previous year. Increases concentrated on dailies and in particular on MF/Milano Finanza, and significant index for the TV channels and the radio.

The newsstands sales trend is also favourable, with the launch of the Newest Economical, Financial and Political Encyclopaedia Atlas.

For the TV segment new revenues prospects are open, both for the corporate TV and the rights negotiation on Internet/ADSL and with the development of the terrestrial digital network, where the company is present with the all news channel: Class News and the exclusive interactive software for home banking on TV.


To optimise listening to Radio Classica/Milano Finanza there are several negotiations with banks to exploit the internet diffusion, growing channel for the use of radio, following the ADSL flat rates. Furthermore in February Radio Classica News was launched, the magazine that every months informs on the radio programmes, concerts and the most important theatre happenings.

Milano Finanza/Classica radio circuit, that broadcasts Radio Classica’s contents, has increased with the affiliation of new Radios a total audience (Audiradio data) of 3.050.000 listeners versus 1 million 400 thousand in 2004.

Own Shares Repurchase

Class Editori S.p.A Board of Directors during the next meeting will propose the renewal of the proxy for the repurchase of the Company’s own stocks, so as to pursue in the interest of the Company, to objectives allowed by the existing legislation. Such a possibility represents a tool of operational and strategic flexibility, that the management must necessarily have available both in relation to extraordinary events such as agreements that involve the exchange of stocks, or in the case of more ordinary situations such as when the Company’s quoted stock price reaches levels where it is convenient for the firm to invest its liquidity in its own shares.

The proposal relating to the purchase of one or more tranches of the Company’s “A” stock, will be effective for a period of 18 months since the Board approval. Such shares may be purchase at the price of EUR 0.10, with a maximum of 10 % of the Company’s net equity, and within the limit set by the income available for distribution and of the available reserves as quantified by the last set of audited accounts.

The Board of Directors will have the possibility to purchase the shares within a minimum of EUR 0.10 and a maximum of 20 % of the average listed price in the 3 days prior to the date on which the purchase is executed.

With regards to the disposal of own shares, the Board Of Directors will have ample discretionality, the only limit being a minimum set price for shares sold to third party investors, which must not be detrimental to the Company’s profit and loss accounts.


The purchase must occur through the Italian Telematic Stock Exchange, so as to fully respect all shareholders rights, and where the possibility arises the Company may purchase all or a significant portion of its own stock by means of Public Tender Offer;

Such a purchase methodology may not be applied to employees of the Company or any of its subsidiaries, where these employees came into position of the shares by means of assignment or subscription according to articles 2349 and 2441, comma 8, of the Italian Civil Code.

The Company currently owns 950 own shares equal to 0,00001, and should it purchase 10% of its own stock, the maximum amount to be paid will be equal to EUR 15.700.000 given current market prices.

Ias/Ifrs new international auditing principles adoption

Referring to Consob’s communication n. DME/5015175 as for 10 March 2005 regarding the state of the system and accounting procedures for the accounting principles applications IAS/IFRS, we inform that Class Editori will organise the first quarter report 2005 using the evaluation criteria set by the normative. To simplify all administrative procedures Class Editori decided to adopt the new international accounting principles both for the leading Group and all subsidiaries as from 2005.

The main differences that will emerge in Class Editori’s statements, according to the new international accounting principles will interest:

Goodwill and differences with consolidated accounting: will not be systematically amortized in the statement, but will have to be valued, on an annual basis, with regards to an eventual loss (impairment test). The amortization elimination will benefit the 2005 statement;

Research cost, development and advertising: research and advertising costs have to be cancelled in the consolidated statement, while the development costs will be admitted and non effective activities, just at the conditions expectations of Ias 38, paragraph 49. Previous years capitalised costs exclusion will benefit 2005 statement;

listed companies partnership: will be fair valued;


TFR: as for Ias/Ifrs the TFR falls within pension benefits matured by employees at the date of the balance sheets with defined benefits subject to actuarial valuations, payable at the end of the working relationship,

leasing: will be accounted as the financial method;

Advanced and differed taxes: the Ias/Ifrs transaction effect will involve many differences that will generate, depending on events the enrolment of advanced and differed taxes.


Consolidated profit and loss statement as for 31 December 2004

(in EUR 000’s) 2003 2004 Sales revenues 98,200 99,818 Operating expenses 89,588 91,165 Gross margin 8,612 8,653

Depreciation and amortisation 8,736 9,354

Operating profit (124) (701)

% of revenues (0.13%) (0.70%)

Net financial charges (552) 197

Extraordinary charges 1,766 1,666

Adjustments to the value of financial assets (17) (136)

Profit before taxes 1,073 1,026

% of revenues 1.1% 1.03%

Income taxes (1,222) (2,111)

Minority interests 324 211

Net profit 175 (798)

% of revenues 0.18% (0.8%)

Revenues as from 31 December include the following:

(in EUR 000’s) 2003 2004 Newsstands revenues 10,044 9,560 Subscription revenues 34,155 35,660 Advertising revenues 42,379 45,461 Other revenues 11,622 9,137 Total revenues 98,200 99,818

Consolidated balance sheet

(in EUR 000’s) 2003 2004

Trade accounts receivable 79,885 88,419

Inventory 2,248 3,288

Trade accounts payable (26,214) (26,473)

Other liabilities (16,199) (24,130)

Tangible fixed assets, net 7,363 6,928

Intangible fixed assets, net 32,117 31,125

Financial fixed assets 11,756 9,599

Reserves (4,062) (4,624)

Invested capital 86,894 84,132

Net assets 81,233 78,298

Minority net assets 4,867 5,579

Net financial situation (794) (255)


Class Editori Spa reclassified profit and loss statement

(in EUR 000’s) 2004 2003

Sales revenues 43.126 45.267

Operating expenses 41.288 44.912

Gross margin 1.838 355

Depreciation and amortisation 1.813 2.132

Operating profit 25 (1.777)

% of revenues 0,05 -3,92

Net financial charges 1.000 4.209

Extraordinary charges 51 1.194

Adjustments to the value of financial assets

Profit before taxes 1.077 1.096

% of revenues 2,5 2,42

Income taxes 693 -196

Minority interests

Net profit 384 1.292

% of revenues 0,89 2,85

Class Editori Spa reclassified balance sheet

(in EUR 000’) 2004 2003

Trade accounts receivable 73.308 80.818

Inventory 1.091

Trade accounts payable 7.205 7.589

Other liabilities 17.689 24.894

Tangible fixed assets, net 2.174 2.724

Intangible fixed assets, net 1.829 2.459

Financial fixed assets 25.299 22.931

Reserves 1.351 1.248

Invested capital 77.456 76.180

Net assets 76.203 77.815

Minority net assets

-Net financial situation (1.253) 1.635



Class Editori

Class Editori is Italy’s top financial news, lifestyle and luxury good products publisher. Founded in 1986 by Paolo Panerai, the company has developed on new technologies to become a multimedia information provider,. The company’s activity currently embraces newspapers and periodicals (MF/Milano Finanza, Class, Gentleman, Luna...), press agencies (MF-DowJonesNews, joint venture con Dow Jones & Co.) economic news for professionals (Class

Professionale) and finance (Milano Finanza Intelligence Unit).

The company is also involved in new media, including digital television and interactive (Cfn/Cnbc, in partnership

with NBC-Vivendi Universal, Dow Jones, General Electric and Mediaset; TV Banking), Internet (MF Trading,, radio (Radio Classica/Milano Finanza) video information systems (Telesia Sistemi) and

news via satellite (MF Sat).

The most recent initiatives have regarded, Class News, an all-news television channel included in the multiplex (group of channels) broadcast by Mediaset using digital-cable technology; the creation of a new Business-TV division. The division will work on designing and building corporate television channels, mainly in the banking-financial area. The first station in operation are WebIntesa TV, created for the Banca Intesa Group, and BPVI channel, for Banca popolare di Vicenza.

Class Editori’s shares (Ticker: CLE) are listed at the Milan Stock Exchange since the 30th November 1998.

For further information contact: Gian Marco Giura

Corporate communication Manager

- Investor Relations -



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