Please be advised that today's conference is being recorded. I will now like to hand the conference over to your speaker today, Sara Bersan. Please go ahead.
Good morning, ladies and gentlemen, welcome to the Media for Europe full year 2022 results presentation. Let me introduce immediately the speakers of today. The presentation will be hosted by our Group CFO, Marco Giordani, and by Matteo Cardani, Managing Director of Publitalia. Let me hand over immediately to Matteo for the advertising and audience outlook. Matteo, please go ahead.
Thank you, Sara. Good morning, everybody. Thank you for your attendance. Today we comment on fiscal year 2022, with a short preview of ongoing indicators for current trading. Despite high single-digit inflation in 2022 and the impact of the energy crisis, since our last call in November, economic indicators are showing signs of recovery. At the end of 2022 and in the first month of 2023, as you can see in chart three, confidence indices turned positive again. Remarkably, the business confidence index are quite positive throughout all the past year and the beginning of this year, and this is a good news for the advertising market. Consumer confidence indexes are recovering.
This positive scenario with regard to confidence indices is reflected also in chart number four, where you can see the good and service consumption. You have the whole picture over the past three years, and it's quite self-explanatory. In year 2021 and 2022, you have the full recovery for the downturn in year 2020, beginning of 2021. In the second half of year 2022, you have a very stable situation with the services performing better than goods that are more impacted by energy prices. Having said that, we can move now to look to the advertising market. The advertising market performance in 2022, as you can see in chart number five, it's minus 2.9% year-over-year.
We discounted the outbreak of the Ukraine war, of course. The good news is that we had a good performance again in Q4 as a market, +1%. It's three years in a row that the Q4 in Italy is a positive Q for the overall advertising market. This was mainly explained by the fact that it was positively affected by the general positive confidence index, of course, the World Cup event. Moving to our performance in this scenario. Our performance was quite good because we had a -1.8% year-on-year. We outperformed both the total market and the addressable market of TV plus radio plus digital.
This is a remarkable result in a year in which our competitors broadcasted the World Cup event. Our consolidated market share on total advertising market is 40.5%. Moving forward and try to explain the main driver of this result. There are two main drivers. The weighted contribution of growing sector to the MFE performance and a growing audience share, so the strength of our offer. Talking about sector dynamics in chart number seven, it's interesting to observe that the impact of the current situation remain asymmetrical between goods and services. On the one hand, auto and household appliances, the two sectors most affected by the energy cost and the shortage of raw materials and components, were down double-digit year-over-year.
On the other end, pharma, personal care, tourism and leisure, above all, maintain or increase the level of advertising investment, counterbalancing the performance of the weaker sectors. As you can see from the picture in chart number seven, we have 41% of sectors growing, 50% of sectors declining single digit, and only the remaining parts was down double digit. The weighted balance of these three main drivers explain our performance. Just a comment on the following chart number eight, where you can appreciate the fact that if you take a look at the retail sales trend by sector is extremely positive, 89% of MSC advertising revenues are produced by sectors than in 2022 at a positive value sales trend, clearly including the inflation component.
That means that, all the main sectors were able to transfer inflation to consumer prices. There are only 11% of MFE-MediaForEurope advertising revenues that are produced by sectors that in 2022 were negative, and we are referring to the automotive and car sales. Here again, there is a positive news regarding the auto sector, because since Q4, there has been a recovery, both in terms of car sales and consequently in advertising investment. This was regarding the sector dynamics. We move to the other second driver of our advertising growth. The strength of our offer on our cross-media portfolio and our programming strategy.
We are quite satisfied with a very well-balanced range of own productions, fiction and entertainment, plus sport rights of course, and a diversified portfolio of generalist and thematic channel. As you can see at page number nine on our main targets, the commercial target 16 to 64, MSC linear audience and share in fiscal year 2022 grew by 2.3 points year-on-year. Honestly, an outstanding result. Our digital nonlinear audience is aligned on the same level, 40.2%. We have a solid leadership both in linear and in digital arena. There are three charts that are quite important for us because they explain the perspective, the near future and also the medium long term.
At page 10, you see, again, thanks to Auditel, total audience measurements, so this is the official Auditel total audience measurement. The comparison between year 2022 versus year 2019. That is our benchmark. You see that the total audience is growing +1.4% versus 2019. Connected TV and digital screens are adding +2.3% to the traditional audience trend performance that is almost flat, slightly declining. In the following chart 11, you see the explanation why this is very important for us because the benefit is also qualitative.
Here again, this is Auditel, total audience figures, where you can appreciate the fact that the double added value of second screen and connected TV that now are fully measured by Auditel since September 2022. They had additional audiences, and that they are adding additional audiences, mainly on younger viewer profiles from digital screens. You know that, this deliver an additional benefit of a higher CPM than the one of linear TV.
This is, I think, quite well explained by chart number 12, where you can appreciate the fact that you have a, let's say, a positive, let's say, trading up between linear screens and digital screens, so connected TV plus mobile plus desktop, in terms of a key performance indicator for us that is revenue per hour. The index is really positive and highly positive on connected TV. Each hour moving from linear TV to connected TV delivers a positive trade off, a positive monetization outcome. The last chart I would like to comment on is chart number 13, where from now on, we will also comment on Mediaset España advertising performance.
Here you have the fiscal year 2022 performance. The overall trend of MSC advertising revenues, minus 4.1%, mainly reflects the trend of the main medium in our portfolio, TV. As in all other European countries, in 2022, TV advertising market in Spain was negative, around minus 4%. Therefore, Mediaset España performance was strongly conditioned by this factor. As in Italy, the worst performing sectors in TV year-on-year were retail, food, telco, and most of all, automotive sector. This was a contingency effect about the past year, while the overall advertising trend in Spain was positive, low single digit positive. This is my presentation, and now I hand over to Marco for the financial part.
I thank you.
Thank you, Matteo, and good morning to everybody also on my side. I will take you through the full year 2022 result, trying to give also some guideline regarding the next 12 months. Frankly, let me say that 2022 has been pretty different from what we forecasted at the beginning of 2022 when we wrote down the budget. Clearly, the macroeconomic environment then appeared to be radically different from what we forecasted at the beginning of the year. During the second part of the year, we were very much focused on trying to reduce the effect on our PNL of the negative information and news coming from the macroeconomic sector.
In any case, we reached in 2022 more than EUR 2.8 billion revenue on the consolidated level and EUR 322 million of adjusted group EBIT. In terms of net result, we reach a recurring net profit of EUR 247 million, and in my opinion, very importantly, higher than the 2019 result. The first year that we can compare without any, let's say, extraordinary events. If you compare these EUR 247 million of net profit in 2022 to the net profit of 2019, you can realize that we outperform it by more than 30%. A really remarkable result after three years of, frankly, very difficult macroeconomic condition.
Last comment on page 15 is on the net financial position. The net financial position ended 2022 with EUR 873 million debt. I would like just to remind that during 2022, we distributed dividend for more than EUR 130 million. We financed the voluntary tender offer on Mediaset España minority for EUR 184 million. We have invested in ProSiebenSat.1 EUR 65 million. As you remember, we carried out a buyback program in autumn of roughly EUR 30 million. Free cash flow generation in 2022 has been more than EUR 360 million. Again, a very important result for 2022.
Moving to stepping in the Italian business in page 16. Clearly, Matteo has already commented on advertising revenue. Few comment on the other revenue lines, lower as expected than 2021, but fully in line with our guidance. Clearly, 2022 has been affected by something that was already foreseen in comparison to 2021. We didn't have EUR 28 million of revenue coming from the Vivendi settlement we cashed in in 2021. We had lower revenue contribution from the DAZN contract because of the stop of the Serie A championship during the World Cup, and some other activities has been reduced in line with our expectation.
Going to the 2023 guidance for other revenue, we are targeting the same number than 2022. Clearly, there could be changes over the year, but I mean, for the visibility we have today, we are expecting, as I said, a similar number than last year. Clearly, we are hoping that the cinema revenue could increase because of a normalization of the sector. I mean, as you remember, this line is composed by several asset contribution, and then clearly there can be mix of performance. In any case, I repeat, same line, same guidance for 2023 in terms of other revenue line. Moving to cost, clearly, everything was carried out and executed as forecasted.
Frankly, we had a very remarkable last quarter performance in cost, when we announced that at the last conference call, the guidance was probably seen as too aggressive, but in reality, we were able to maintain our EUR 1.8 million total cost target. I have to say that has been difficult, mainly because in this number, you get all the energy cost increase that frankly has been material in 2022. Also all the effects coming from inflation trends that again have been pretty remarkable. The effort frankly has been much more tougher than expected, but we were able to reach our guidance.
As far as the non-recurring costs, we had almost EUR 30 million of personal layoff, EUR 21.5 million of write-offs of the radio frequencies. As you remember, we bought the radio activities in 2017. Clearly that acquisition has been accounted with some of the goodwill accounted in the frequencies line. As is normal, we are carrying out impairment test every year. The increase of the average cost of capital this year affected the value use of these activities at the end of 2022. We consider it really as a sort of accounting measurement.
In terms of value, we are very happy about the radio activities, very complementary to the TV business. Frankly, also over the first quarter this year, we are performing much better than the rest of the market in the radio activities. I believe question will arise on that. As far as the guidance on cost, we will provide more accurate and detailed cost guidance once that the merge between Mediaset España and MFE will be completed, so over the course of this quarter. I can anticipate a few drivers of the cost trends in 2023. Certainly, programming costs will be flat on 2022.
We are expecting a gradual decline of inflation, even if not so material in terms of savings, as you can imagine. We are not expecting any further decrease of cost of energy. Again, also on this side for 2023, we are not really expecting a great advantage in our, let's say, cost line. As far as the integration with Spain, clearly, there will be not so many months to collect savings. Certainly the work will start as soon as the merges will be completed, so that probably savings and integration costs over the course of 2023 will be probably flat, or in any case, neutral. Going down below EBIT line, you can see the performance.
I believe that has been pretty in line with our guidance. Moving to guidance 2023, clearly, we have a big question mark yet caused by the lack of visibility on the dividend coming from ProSiebenSat.1 that we don't know anything about. Clearly, I will comment the guidance without giving any kind of indication on the dividend because we don't have any information. Clearly on the net financial expenses, we are expecting an important effect on interest charges, roughly EUR 10 million higher financial expenses compared to 2022 due to interest rates uplift. Because in terms of net financial position, we are not expecting material changes.
Clearly, this calculation has been done without having a number on the withdrawal rights that the Mediaset España minority shareholder could exercise in the coming weeks. That's something that clearly will be more or will be clear certainly in a couple of weeks' time. On the associate line, again, I remind you, without the ProSiebenSat.1 guidance, we can stay around EUR 10 million guidance. Moving to page 18, on the CapEx line, I don't think that there are very not so much things to comment.
Number was in line with our guidance in 2022, and we can confirm that in 2023, the investment line will be flat compared to 2022, in the range of EUR 270 million-EUR 180 million. Lastly, page 19 on the cash flow. As far as the cash flow, the Italian cash flow was positive for EUR 138 million. Again, this means an amount more than double compared to the pre-COVID level, so the 2019 free cash flow. Again, a very remarkable number. You can appreciate in this chart the financing of the voluntary tender offer in Mediaset España minority for around EUR 100 million, EUR 184 million.
Of the proceeding stake, as I mentioned at the beginning, you can also appreciate here the more than EUR 30 million investment in the buyback carried out in autumn. As you can see, we reach a ratio of the group-adjusted net debt to EBITDA of roughly 0.9 times. That clearly includes also the dividend distribution paid in September and the voluntary tender offer I mentioned before. In terms of guidance, we can confirm a guidance for the group-adjusted net debt to EBITDA ratio of around one time, also for 2023. Now I hand over to Sara. I believe that Q&A session could start. Thank you. Thank you. We are here to answer to your question.
Yes, thank you very much, Matteo and Marco, and we have time to taking question from the guest.
Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Once again, that's star one and one if you wish to ask a question. Please stand by while we compile the Q&A row. We will now take the first question. One moment, please. It comes from the line of Pier Andrea Randone from Intermonte. Please go ahead. Your line is open.
Thank you and good morning to everybody. My question is about the current trading. If you can provide more color about what you already stated, both in terms of Italian outlook and Spanish outlook. If you can also comment on the metrics you provided about total audience in order to give us the possibility to gauge the magnitude of the support you can have from this metric. Thank you.
I thank you, Andrea. I try to address your question. First of all, current trading in Italy and Spain. With regard to Q1, we are supported by a positive gross domestic product forecast that is positive and slightly improving over the past weeks, and it's relative compared to other European countries slightly better. This explain the good performance of the advertising overall. We don't have official figures for Q1, generally speaking, it's the overall market is almost flat or slightly positive. Our performance in Q1, I can anticipate, is flat year-on-year, and this should be considered a remarkable result for a quarter that was up +2% in Q1 2022 versus 2021.
As I said before, the result has been sustained by three factors, the resilience of the Italian macroeconomic indicators compared to the other European countries in terms of the gross domestic product, and also the confidence index, because honestly, the business confidence index is quite positive. Companies, businesses were quite successful in transferring inflation to consumer prices. For sure, we have an issue with low-income households. They need to recover purchasing power, this is not affecting the overall trend in retail value sales. The second thing is the trend of the economy as a positive impact in the advertising market, especially on television.
This results in flat year on units, remarkable results compared to other European countries because we knew from early indicators from January, February that other countries, I mean Spain, Germany, U.K. and France, are suffering from a negative trend in television. While again, a confirmation that TV is central in our ecosystem. Again, the sector dynamics is quite interesting because the early indicators we had from the automotive sector in Q4 is confirmed by Q1. We still have the signals of a very positive advertising trend in automotive that is a double-digit increasing Q1 2023 versus Q1 2022.
Moving from Italy to Spain, the overall market is quite positive, while TV is suffering a little bit more in Spain, generally speaking, the TV market. We had a tough start in terms of the advertising market performance, but after the first two months, the advertising trends started to improve. In this scenario, Mediaset España Q1 performance reflects the market trend. January was quite tough, February little bit better, and March was definitely progressive, a positive progression. The overall trend for the quarter is around mid-single digit down, and we will comment on that in the next conference call on Q1.
We are looking at the second quarter performance with cautious optimism, taking into account that even in Spain, some industries like automotive seems to increase the advertising investment. With this, I hope to have covered your question about current trading. I move back to the question regarding total audience, and I thank you for this question because this is quite crucial for our business perspective. In the last four months of 2022, Auditel completed the total audience measurement, including also connected television in its official measurement. We are around a penetration of 50% of connected television in Italian households, and more than 40% of TV sets are now connected television.
This trend will keep on growing, of course, because it's a structural trend. This explain, let's say the positive trade-offs in chart 10, where for sure, we are facing a slight erosion of the linear audience. 22 versus 29 is -0.9. This is specifically for Mediaset because we have a very good performance in terms of share. The overall trend of television is, of course, a little bit more negative. But luckily, we are compensating with the additional audience coming from connected TV and digital screens. If on average, as we commented in number, in chart 11 is +2, +2.3%, the value.
The added value is really remarkable for younger audiences, central age audiences, so 15-34, or 25-54. The good news is that since March, we have included in our standard reporting in the advertising post valuation, additional gross rating points coming from second screen, live streaming, and this helps a lot. Last but not the least, we strongly rely on the positive trade-offs in chart number 12 because what does this chart say? If we put 100 the average revenue per hour we get from linear television, that is a combination of a higher cluttering, the higher number of advertising seconds in an hour, compared to online video connected television, where you have a lower advertising cluttering.
Thanks to the fact that we are able to command the higher CPM on online video and even higher CPM on connected TV, we have a good multiple, a positive multiple. Each hour moving from a linear TV consumption to an online video or a connected TV consumption, both live or on demand, generates a positive trade-off in revenue. As far as this combination of quantity and prices stay on this positive net balance, we have a good perspective for our business. Sorry for the long answer, but I'd like to touch on this, and I thank you for the question. Hope to have answered.
Thank you very much, Matteo. Very clear.
Grazie.
Thank you. We will now take the next question. It comes from the line of Stefano Gamberini from EQUITA. Please go ahead. Your line is open.
Good morning, everybody. Many thanks for the presentation. I have a few questions, if I may. The first two are regarding the guidance on 2023. If I can ask regarding the other revenues, you underlined that you expect a flat trend but a potential upside. Could you give Us a little bit more color why you expect a flat trend despite DAZN that should improve, and on the other, what are the potential upside on this trend? The second is regarding the OpEx. If I understood correctly, that at the end of the day, the guidance, or we can say, a sort of flavor that you spent is in the region of a flat OpEx trend around EUR 1.8 billion.
The third one, if you can give us a little bit more color or your comment about the presentation of the new CEO in ProSiebenSat.1 and its targets for the strategy of the company, mainly focused on digitalization and increase of their downstream platform, sorry. The very last question regarding EI Towers. Do you see some changes? Do you feel that now the environment is closer for a consolidation in the tower sector? Or do you see still some obstacles for the merger with Rai Way? Many thanks.
Thank you, Stefano. As far as the other revenue, no, I mean, as I said, it's a part of several items. Clearly, every items are moving, let's say, without any correlation with the other. Let's say that what we are expecting more in terms of growth is coming from the cinema, no? Clearly, with the pandemic emergency, clearly cinema revenue almost disappeared. We believe that 2023 will be the first year in which there will be some kind of normality in the cinema, let's say, industry. Clearly, what we have lost will probably not recover, but certainly in terms of like for like, we think that 2023 could be higher than 2022.
That's the main, let's say, item that should grant, let's say uplift. Certainly we have Infinity that performed very well. We are having one million subscribers, so clearly much more than the past. Clearly then we will see how Champions League and content delivery will go on. We can have better, for sure, better performance, I don't know if it's gonna be so material. All the other items are certainly moving in a more natural low single digit trend. In terms of then EUR guidance, I don't think it's gonna be so material. DAZN is concerned, as you know, we are collecting advertising for them.
We have clearly, some, let's say, item related to their audience. The performance will be more up to them in terms of, editorial performance than up to us. In any case, again, I don't think that, like for like, there will be great differences between 2022 and 2023, except the fact that we are going to play more games in 2023 than in 2022, because in 2022, we had the World Cup stop of the Serie A championship. That's, again, another very easy, let's say, event that we can include. As far as OpEx, you are almost right.
We are certainly trying to keep everything on a flattish side on last year. We have several elements that are not depending totally on us. Energy cost is the first. Inflation is another one. Certainly the top line performance will also affect cost. As you know, we have in any case, variable cost connected to revenue. Again, that will affect the total cost line. Lastly, as I remember, the new pan-European organization that will be, let's say, put in place after the merger with Mediaset España, again, we are entering almost the second half of the year, so we are not really expecting big saving coming out of it.
We will start to move, and hopefully we will have a little bit more visibility once that the date of the merger will be sure. On ProSiebenSat.1 I have not so many comments because, I mean, first of all, we don't have any other information that you don't have in the sense that, as you know, we are not represented in the supervisory board, so we don't know anything else than the company is officially stating. Regarding the presentation, I mean, certainly we appreciate the focus on the core business. I think was wise and also, I mean, we are happy that it happened after several years of different kind of strategy. If you want, we are a little bit worried about the announcement they made on the headcount reduction.
We strongly believe that we need to invest more in local, let's say, production content and show activities, but clearly we don't know the base out of which they are starting. Having said that, without having a base number, it's very difficult to comment. I believe that you are more or less in the same position. It was a very high-end strategic presentation, but without having the 2022 base, without giving a number on the base, it's very difficult to comment. Lastly, on EI Towers. No, frankly, we don't think the mood is radically different. We know that, and we read on the newspaper that there were some, if you want, activities underwater.
frankly, we prefer to wait official facts and rather than comment on leaks and articles on the newspaper. I believe I have answered all your questions, Stefano.
Absolutely. Thanks a lot, Marco. Just a very quick question, if I may. Regarding OpEx in Spain, do you have a guidance?
I mean, as you have seen in 2022, the Spanish management was able to cut cost a lot. So again, we think that something close to flat could be a good indication. You have also to remind that we suffers from some audience losses in the last part of 2022. Now audiences is back on track, and so we are happy about that. New management is putting in place action to recapture the leadership in terms of audience. We are also ready to invest more in content, in local Spanish content, in case, let's say, all the action we are undertaking now will not sufficient. Let's say in a normal and a present situation, we are okay with, let's say, some flattish kind of trend.
In case needed, we are ready to invest more in content, to maintain the leadership in terms of audience, on the Spanish market too.
Many thanks, Marco, and thanks. Sorry for the several questions.
No worry.
Thank you. We will now take the next question. One moment please. It comes from the line of Antonella Frongillo from Intesa Sanpaolo. Please go ahead. Your line is open.
Hi. Good morning, everyone. I have one question left on the guidance. Could you provide an indication on the tax rate for 2023 for Italy? I have another follow-up question on ProSiebenSat.1. How do you see the entry of a new shareholder, PPF Group, in the shareholding structure? If you can comment on that.
Thank you, Antonella. On the tax rate, we are using the natural 27% tax rate in Italy, a little bit less on the 25 on Spain, as you know. I mean, we are paying taxes in where the activities are carried out, we are paying taxes in Italy for Italian activity and in Spain for the Spanish activities. These are the two, let's say, standard tax rates we are using for our forecast. As far as ProSiebenSat.1 is concerned, I mean, clearly, we didn't know anything about the entrance of the Czech investor. Frankly, we had and we are not having any relationship with them.
In any case, I believe that a stable shareholder structure, it's in any case better for the company than, let's say, an unstable and fluctuate shareholder structure. Having said that, I believe that the management is fully equipped to deliver value for all shareholders, and that is what we are expecting. I believe that the Czech investor is more or less hoping the same. As far as why, what's their plan, we don't know anything. We just stick with what they declare.
Okay, thanks.
Okay. Thank you, Matteo, and thanks, Marco. Thank you guys for all the questions and for taking the time for the conference call today. As always, we'll be available for any question, information, or you would like to ask. Have a good day. Bye-bye.
That does conclude our conference for today. Thank you for participating. You may now disconnect.