Cairo Communication

CAIRO COMMUNICATION
Cairo Communication
• Activity started in January 1996
• Turnover 2000 : Euro 158,7 million
• Active in 3 business areas: Advertising collection, Publishing, Internet
• Staff : 167 employees plus 100 sales agents
• Listed at “Nuovo Mercato” on July the 19th, 2000 at Euro 65 per share
Shareholder Break-down
Free Float
26.1%
Urbano Cairo
12.8%
Roberto Cairo
0.1%
UT Belgium Holding
15.9%
UT Communications
45.1%
Group Structure
CAIRO
COMMUNICATION
100%
Editoriale
Giorgio
Mondadori
100%
Cairo Tv
100%
Cairo Pubblicità
100%
CairoWeb
80%
Il Trovatore
99.95%
Airone
Publishing
Advertising
Internet-Advertising
Internet: Search engine
ADVERTISING: CAIRO PUBBLICITA’
Cairo Pubblicità
1996: Start up company in the advertising business
• Jan. ‘96:
- Contract with RCS for 4 years.
- 1999 Target turnover: Euro 50 million
•
- Target of Euro 50 million reached 2 years ahead
of contract
Dec. ‘97
• Mar. ‘00
- Contract renewal with RCS till 2002 with a target for
further renewal of 3 more years
• Oct: ‘00
- Concession of all Giorgio Mondadori’s magazines to
Cairo Pubblicità
Cairo Pubblicità - The Offer
•
2001 Portfolio: 16 Magazines in the main editorial segments
Women/Fashion Cusine
Family
Health
Gossip
Travelling
Media/Finance
Nature
Gardening
Art and Antique
Children
Cairo Pubblicità – Turnover
Euro millions
90
79
80
69
70
60
60
48
50
40
30
17
20
10
0
9/96
9/97
9/98
9/99
9/00
Cairo Pubblicità
• Great potential of Giorgio Mondadori’s portfolio compared with
competitors.
• Revenues extimated for 2001: Euro 23 million
Title
Genre
Gulliver
Dove
Class
Bell’Italia
Bell’Europa
Travel & leisure
Travel
Life style
Travel
Travel
Target
High
High
High
High
High
Circulation*
Circulation*
25,204
38,781
32,834
55,166
33,840
Adv.
Adv. Revenue**.year ‘00
Eu 5.5 mn
Eu 5.5 mn
Eu 5 mn
Eu 3.6 mn
Eu 2.1 mn
* new stand last 3 month
** extimation
ADVERTISING: CAIRO TV
Cairo Tv
1998: First acquisition made by Cairo Communication
• Opportunity to enter Italian TV market ( Euro 3.6 billion in 1999,
Pay TV share around 1% compared to USA more than 20%)
• Pay TV: a highly potential market in Italy. (10% Household
penetration in Italy compared to 18% in Spain, 33% in France and
35% in UK)
• 10-year contract (till 2007, with 6 months first negotiation right and
an addictional first refusal right)
Cairo Tv: the Offer
TELE+ CHANNELS
THEMATIC CHANNELS
TV GUIDE
Cairo Tv-Turnover
Euro millions
50
40
40,7
30
20
10
31,0
18,6
0
9/98
9/99
9/00
ADVERTISING: CAIRO WEB
Cairo Web
1998: Start up company in the Internet business
• Highly potential and growing market (still only 1% of the
total)
• 24 web sites in concession: Affari Italiani.it, IlTrovatore.it,
Spray.it, Clarence.it, Viaggiare.it, Moto.it, Giornale.it,
Netfraternity.it Lombardreport.it, 3bMeteo.it, Oroscopofree.it,
and others, for more than 50 million impressions a month
• Dedicated sales force plus some of the sales agents of Cairo
Pubblicità and Cairo Tv.
Cairo Web Turnover
Euro thousands
3000
2500
2000
2427
1500
1000
966
500
0
206
9/98
9/99
9/00
ADVERTISING: STADIUM
Cairo Communication - Stadium
1997: Start up activity in the Sport business
• In 1997, Cairo Communication has signed agreements with Lazio and
Roma for the advertising in the Olympic Stadium
• The turnover has more than tripled from Euro 2 million in ’96-’97 to
Euro 6,5 million.
• In the season 2000 - 2001 Cairo Communication has renewed the
contracts with Lazio and Roma adding new agreements with Teams in
Serie B (Italian second league)
PUBLISHING
Editoriale Giorgio Mondadori
1999: Second acquisition made by Cairo Communication.
• Editoriale Giorgio Mondadori (a 20 years old publishing company) was
acquired in February 1999, restructured and turned around in one year from
a loss of Euro 1,9 in first quarter 1999 to break even in first semester 2000
Editoriale Giorgio Mondadori
Break even is the result of :
1
Reduction of Production costs, Personnel costs (-16%) and Overhead costs (33%)
2
Rationalization of Products to cut costs and increase circulation (closing of a
magazine, reduction of books published by 50%, product
changement/repositioning and editorial promotions)
3
Growth in Advertising collection
Editoriale Giorgio Mondadori
Circulation
JANUARY-SEPTEMBER (NEWS-STAND) 1999
- IN VIAGGIO
13.222
- BELL’EUROPA
29.499
- BELL’ITALIA
46.833
- GARDENIA
37.722
- ARTE
17.278
- ANTIQUARIATO
12.333
- AIRONE
38.498
2000
27.778
35.267
50.611
39.889
17.663
12.545
38.516
Trend
+110%
+19,5%
+ 8,0%
+ 5,7%
+ 0,2%
+ 0,2%
=
(SUBCRIPTIONS)
SEPTEMBER
2000
116.912
Trend
+9,4%
1999
106.857
INTERNET
IlTrovatore
2000: Third acquisition made by Cairo Communication.
• Il Trovatore is an Italian search engine, with its owns technology
and a high potential growth of impressions (since the acquisition
impressions grew 6 times to 8 million a month)
• In the future il Trovatore will benefit from a stronger
positionig on High Technology, its development and
its impact on all aspects of society and from an
advertising campaign
Financials
Cairo Group - P&L Statement 1997-2000
Proforma
9/97
%
9/98
%
9/99
%
9/00
%
49.2%
85.5
40.7
53.9%
1.3%
2.4
2.1
1.5%
2.0%
74.5
30.8
1.0
1.8
54.5%
1.0%
64.2
18.8
0.2
2.3
56.2%
Other income
48.0
22.1
0.0
0.9
Total Rep. Advertising
71.0
72.7%
85.5
74.9%
108.1
79.1%
130.7
82.4%
Total Ed. Giorgio Mondadori
26.5
97.6
27.3%
25.1%
100.0%
28
158.7
17.6%
100.0%
28.6
136.7
20.9%
100.0%
28.6
114.1
EBITDA Rep. Advertising
1.6
2.2%
3.7
4.3%
8.5
7.9%
9.7
7.4%
EBITDA Ed. Giorgio Mondadori
0.8
3.0%
(3.9)
-13.6%
(2.9)
-10.0%
0.8
2.8%
2.4
(1.0)
(3.0)
(3.6)
2.5%
(0.2)
(3.6)
(6.6)
(7.1)
-0.2%
5.6
1.2
(0.4)
(1.7)
4.1%
10.5
4.9
11.5
6.9
6.6%
(Euro millions)
Conc. (Publishing + stadium)
Conc. (Pay-TV)
Conc. (internet)
Total Revenues
TOTAL EBITDA
EBIT
PBT
Net Earnings
22.6%
0.0%
-1.0%
-3.1%
-3.7%
16.5%
0.2%
-3.6%
-5.8%
-6.2%
22.5%
0.7%
0.9%
-0.3%
-1.2%
25.6%
1.3%
100%
3.1%
7.2%
4.3%
Cairo Communication Strategy
Cairo Communication Strategy
Cairo Communication in less than 5 years of activity has
implemented a three level strategy:
1) Start up companies in advertising market to become
multimedia (Cairo Pubblicità and CairoWeb)
2) Acquire a rep.advertising company (Cairo Tv) with
high potential of growth in the big and growing
television market
3) Acquire publishing companies with high potential in
advertising collection and in increase of readers/users
(Giorgio Mondadori, Il Trovatore)
Turnover
(Euro millions)
160
140
120
100
80
137
60
86
40
49
20
0
159
17
30/09/96
30/09/97
30/09/98
30/09/99
30/09/00
Evolution of the Revenue Mix
100
7
18
80
32
60
40
93
50
20
0
1997
ADV. Magazines
2000
ADV.Tv, Internet and Stadium
Publishing
Cairo Communication Strategy
Cairo Communication will focus in the future on a three level
strategy:
1) Develop the existing activities especially those with the
highest potential (Pay Tv, Internet, Giorgio Mondadori)
2) Acquire publishing companies in order to start operate
in areas of the comunication business highly potential
for advertising and circulation or audience.
3) Acquire rep. Advertising companies in order to
complete the media portfolio and to reinforce media
already in concession