Management and business units

The main results of FY2008 compared with those of FY2007 are summarised below:


Amounts in € ‘000 FY2008 FY2007
Revenue 573,022 572,093
Gross operating profit (GOP) 49,283 64,362
Operating profit 17,801 31,307
Profit before tax 25,343 46,814
Profit for the year attributable to shareholders of the parent 16,111 27,694
Equity attributable to shareholders of the parent 357,103 346,411
Net financial position 149,006 240,163
Employee headcount 2,255 1,988

For the global economy, 2008 marked a profound break with the past, with an overall economic picture that deteriorated steadily during the year until the fourth quarter (4Q08), when it plunged into marked recession.

The severe economic crisis experienced in these last few months has caused a significant change in the spending habits both of consumers, who have sharply reduced their spending propensity, and businesses and professional associations - which are tackling a difficult and uncertain market also via reduction in marketing and advertising investments. All this, together with the greater difficulty of accessing credit caused by the troubles of the main financial institutions, is also reflected in across-the-board deterioration of average payment terms.

The circulation and advertising markets both ended 2008 down vs. 2007, with particularly negative trends in the latter months of 2008.

In this environment, the 24 ORE Group achieved positive results, although lower than the previous FY in terms of profit.

Consolidated revenue amounted to €573.0 million (mn), in line with €572.1 mn in 2007. Based on like-for-like consolidation scope, there was a decrease of 4.8% YoY - basically due to the decline in performance as regards bundled add-on products, the daily newspaper's revenue, and the print products of the Professionals Area,

Gross operating profit (GOP) amounted to €49.3 mn, down by 23.4% vs. €64.4 mn in 2007, which benefited from non-recurring income of €4.7 mn relating to the IFRS-compliant restatement of post-employment benefits.

Net of this component, the downturn in GOP was primarily due to the adverse performance of addon products (revenue down by €26.4 mn and GOP down by €7.4 mn). This was joined by higher costs relating to advertising sales and the effect - still negative overall - of the gradual replacement of print publishing products with electronic products, particularly as regards services to professionals and businesses.

The contribution of new acquisitions made in 2008 (ESA Software S.p.A. and Newton Management Innovation S.p.A.), together with the full-year effect of those made during 2007, generated an increase of €29.9 mn in revenue and of €2.8 mn in GOP.

Operating profit of €17.8 mn compares with €31.3 mn in 2007. As regards the 2008 figure, lower depreciation & amortisation of €6.3 mn - the net balance of (a) the positive impact of the recalculation of the residual useful life of some categories of property, plant and equipment (€2.1 mn) and intangible assets (€7.9 mn) and (b) the negative impact associated with acquisitions made (€3.6 mn) - was almost entirely offset by impairment of goodwill and other items of property, plant and equipment and other intangible assets.

Profit for the year attributable to the shareholders of the parent, which amounted to €16.1 mn vs. €27.7 mn in FY2007, took up part of the slack reported at operating level thanks to higher net finance income coming from higher net cash & cash equivalents and to a lower tax burden, which benefited from optimisation action taken during the year. We also point out that the 2007 bottom line benefited from €13.3 mn for the capital gain made on disposal of the entire shareholding owned in LSEG (London Stock Exchange Group).

As at 31 December 2008 the Group's net financial position was positive by €149.0 mn, even although lower than the €240.2 mn reported as at 31 December 2007. This was mainly due to investments made during the year, which totalled over €73 mn, and to dividends distributed (€13.9 mn).