Good day, and thank you for standing by. Welcome to the MFE-MediaForEurope 2024 Full-Year Results Web Zone Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Zahra Bersam. Please go ahead.
Good evening, ladies and gentlemen, and welcome to the Full-Year 2024 Results Presentation of MFE-MediaForEurope. Today, the speakers are Marco Giordani, CFO of the group, and Matteo Cardani, Managing Director of Publitalia. I will hand over immediately to Matteo for the audience and advertising outlook. Matteo, please go ahead.
Thank you, Zahra. Thank you, everybody, for attending. Today, we'll go through our Fiscal Year 2024 results and provide a brief outlook on key indicators for the current trading period. We'll begin by analyzing the overall economic scenario with closing data 2024 and early indicators 2025 in Italy and Spain, countries where the outlook is still moderately positive despite the current period of high uncertainty. Actually, if we consider the four key indicators of the macroeconomic scenario, which are relevant to advertising evolution, generally speaking, before the tariff war exploded, they were moderately positive. Low inflation under control, GDPs showing positive progression, low single-digit, moderate positive trend for consumption of goods and services, and therefore confidence indexes fluctuating around stability with very low variance. This is what is shown in chart number three. Turning to the advertising market at page four, the overall 2024 performance is positive.
Italy plus 3.9%, Spain plus 4.2%. As you can see in the chart with the positive trends of our main media, TV, radio, and digital. Television in Italy had a particularly strong positive trend in 2024 thanks to sporting events and the generally good performance of the medium overall. While in Spain, linear TV remains stable, and if we add connected TV, the overall trend for the main medium is single-digit positive. In this context, MFE cross-media strategy continues to combine the stability of traditional media, TV and radio, with opportunities for growth in new market segments. By adopting a flexible approach, we integrate legacy and digital media, leveraging synergy between Italy and Spain to announce local and international business opportunities.
As we can see in chart number five, we enable our clients to plan a campaign across different media platforms, delivering a total reach that even over-the-top players cannot match, as shown on slide number five. We achieve a higher monthly reach among adults, higher than Google and Meta in both countries. Now, speaking about volume and product growth, MFE-MediaForEurope remains an essential part of any medium plan, whether considering broadcaster only, full-screen only, or total screen. We lead in commercial target total audience within the broadcaster-only segment, as you can see in chart number six, and we hold a 40% share in Italy and 27% in Spain, as you can see in chart number seven.
If we expand the view to full-screen only and we include over-the-top estimates, the two graphs at chart number eight reveal that over-the-top services account for just 6.1% in Italy and 15.3% in Spain. The difference of these percentages in the two countries is due to differences in digital adoption and also the subscription video on-demand services penetrations. We have estimates that they are around 40% in Italy versus 65% in Spain. Going ahead, we must remark the fact that a key factor in strengthening our total video total audience proposition is the solid performance of our in-house content production, which reinforces both the resilience of linear television and the growth of our digital platform.
As you can appreciate in chart number nine, in both countries, our top programs benefit significantly from connected TV and digital screens uplift, delivering net audience growth ranging from 8% to 50% depending on each program, and they enhance both reach and audience profile. This content strategy has an impact on our digital offering that is evident in key performance metrics shown in slide number 10, because in terms of total time spent, we are experiencing a double-digit growth. The combined growth rate is above 30%, and we rank among the leading European broadcasters with over 1.2 million hours view in both countries over the past 12 months. As you can see from this dashboard with all digital KPIs, they are all positive except unique browsers in Spain, and this is a work in progress.
We are addressing through a single OTT brand strategy aimed at migrating the current brand Mitele to the Infinity platform, the well-known successful brand in Italy. These two remarks with regard to content and technology are quite significant in MFE perspective because they offer evidence about potential synergies in content exploitation, technology platforms beyond cross-country, cross-selling commercial opportunities. Another interesting remark, we already commented on this KPI in the past conferences call. In slide number 11, you can appreciate the fact that there continues to be a positive multiplier effect between linear and digital. We love to say that each hour of content consumption from linear to digital generates higher revenue per hour.
We can therefore affirm that the variety of our cross-media offering, which generates unmatched volumes compared to competitors, combined with technology-driven price leverage, has led to a shift in our clients' media mix. You can appreciate this in chart number 12 for Italy and 13 for Spain. In both countries, advertisers are increasingly investing across multiple MFE platforms. As said, so far, nothing matches the scale and baseline reach of linear media, which, when integrated with addressable advertising, creates an unparalleled cross-media reach. The pursuit of maximum reach is one of the key drivers in the growth of cross-media advertising within our client base. In Italy, the share of MFE clients investing in a free media platform has increased from 66% in 2019 to nearly 82% in 2024.
It is remarkable the fact that Digital Out-of-Home is entering the perimeter as a new consolidated medium in 2024. In Spain, we have significantly a similar trend rising from 30% in 2019 to 63% in 2024. Now, let's move on to the final chart of my presentation before passing over to Marco. The advertising performance in Fiscal Year 2024 is definitely very positive, +4.7%, the combined result of MFE. It is the combined result of +6.8% in MFE Italy, better than the advertising market, and -0.5% in Spain, aligned with the linear TV trend. As said, the overall performance reflects the combination of a steady or slightly positive trend in linear media and a strong double-digit growth in addressable media, which continues to represent a growing share of our business. Thank you, and I hand over to Marco.
Thank you, Matteo, and good evening also from my side to everyone, and welcome to the Full-Year 2024 presentation. At page 16, you get the highlights that clearly show how the fiscal year ended in a very outstanding way. Honestly, much better than we thought at the beginning of 2024. Consolidated net revenue amounted to EUR 2,900,000, almost EUR 50 million, plus 5% compared to 2023. Adjusted EBIT, excluding non-recurring items, of EUR 370 million. Just to remind that the non-recurring component was almost EUR 50 million and referred to layoff and reorganization expenses. Reported operating profit grew by 18% compared to 2023.
Clearly, entering below the EBIT, you can see, and probably you have already read from the press release, we were forced, following the proceedings at times provided by the decision to, let's say, use the treasury shares in the deal, let's say, signed with GA regarding the minority interest of the non-core activities. We were forced, as I said, according to AS36, to align our shareholding to the value that the supervisory board, let's say, decided for their shares. For this reason, we were forced to have a, let's say, a write-down of EUR 128.2 million on our ProSieben 29.9% stake. As you know, clearly, that has been a non-cash, let's say, item, but clearly, that's a pretty, let's say, not forecasted, let's say, action. We were forced to carry it out on our balance sheet following the ProSieben supervisory board decision.
Adjusting net profit, excluding the just-mentioned ProSieben at times write-down, amounted to EUR 266.1 million with an increase of 27.2% compared to the same figure of last year. Another important element was the free cash flow that was extremely high and reached EUR 343.3 million, much higher than last year's number, plus 23%. That is clearly something that caused a pretty sharp reduction in our net financial position that fell from EUR 900 million at the end of 2023 to a little bit less than EUR 700 million at the end of 2024. That has been achieved despite the distribution of EUR 140 million of dividends during the year. As far as the group net financial position for financial covenants purposes, that was below EUR 600 million compared to EUR 740 million of the previous year. This outstanding result will enable the group to finance its strategic development and, once again, reward also all our shareholders.
That is the reason for which the board of directors today resolved to propose to the shareholders meeting the distribution of a gross ordinary dividend related to the financial year 2024 of EUR 0.27 per each ordinary Class A and Class B shares, with a pretty important increase of +8% of the previous year's dividend payments. Entering at page 17 in the operating segment, Italian and Spanish operating segment, I will not comment again on the advertising revenue, just a little comment on the other revenue line for which we registered an increase of 13.3% over 2023, reaching EUR 322 million. At EBIT level, we registered an impressive +50%, almost 50% increase with the EUR 221 million level. In terms of cost, we are fully aligned with the guidance we gave you. We were managing the cost base with a great efficiency approach.
We built up a strategy to adapt the cost base in relation to the revenue evolution, allowing the company to increase the profitability quarter by quarter. As far as the Spanish business is concerned, again, without commenting on the advertising revenue, the other revenue line went up to EUR 84.7 million and the cost was EUR 678 million in 2024. We have anticipated the fact that we wanted to focus on the local content, and so our programming grid was financed with new money to, let's say, achieve the local content strategy. In any case, at the year-end, the EBIT in Spain was EUR 150 million, almost, representing almost 18% EBIT margin. That is the highest number among the European broadcasters. Moving to page 18, at the group level, I can give you also some guidance regarding 2025. We are expecting other revenue to be roughly flat compared to 2024.
In that respect, a great, let's say, not certain and variable forecast is the one regarding theater, theater revenue that clearly will depend a lot on many conditions, and also depending on, let's say, distribution of fiction and movie to other platforms. I mean, again, our guidance for other revenue at the group level is roughly flat on 2024. Regarding the cost side, clearly, we are navigating in a very complex and unpredictable macroeconomic scenario, but in any case, this is something we have already proved to manage pretty efficiently. We can anticipate that also in 2025, our performance on cost will be driven by efficiency. In Italy, the cost base will not grow more than 1%, probably a little bit less than that, but in any case, that's our target.
In Spain, on the other end, we will have some cost increase of roughly EUR 20 million caused by two main factors. The first one is not really caused by us. I mean, the cost of labor rules in Spain changed, creating a pretty substantial increase in the unit cost of labor. The second reason is the one that I already mentioned, the pretty important intention to invest in local content to further boost our audience share. Frankly, the first result in the first quarter is already pretty clear. We are now on track, and the investment we carried out last year and the one that we carried out in the first quarter of 2025 are proving to be efficient and directed to the target.
Always in page 18 and moving below EBIT line at the group level, financial charges was negative last year for almost EUR 24 million in line with our expectation and guidance. Clearly, a lower number compared to last year, thanks to the ability of the group to generate cash and to decrease the debt level. In the result from investment accounted with equity method, you clearly find the write-down already mentioned on ProSiebenSat.1 stake. As I said, it was a non-cash item, but it's something we were forced by the rule to take it. If I have to move to the next year, so the 2025, let's say, guidance in that respect, we can guide you on the EUR 25 million financial charges.
On the associate line, we confirmed the guidance of around EUR 15 million excluding any impact on ProSieben because, as you know and you can imagine, we do not know anything about them. It is very hard to make any forecast in that respect. Moving to the investment, CapEx mainly, page 19, clearly everything in line with what we guide you. I mean, no big issue, EUR 375 million. On that number, that frankly, it is 10 million below our expectation because we have some phasing issues. Probably moving to 2025, we will have this phasing effect affecting 2025, but all in all, we are targeting the same amount than 2024, also in 2025.
Lastly, page 20, free cash flow, we already mentioned at the beginning of my presentation, was a very outstanding performance, EUR 343 million, let's say, cash flow generated in 2024, plus 23% compared to 2023, a remarkable, I believe, performance. That clearly helped to reduce the financial debt. That went down from EUR 900 million at the end of 2023 to EUR 692 million at the end of 2024. Sorry to remind you again, but I mean, in this number, we have distributed EUR 140 million in dividends to all MFE-MediaForEurope shareholders. I mean, MFE-MediaForEurope has once again demonstrated the ability to convert profit in free cash flow because that, we believe, is our main objective. We did it while maintaining a high level of industrial investment. We had a cash flow conversion of almost 96.5%, and that's clearly the best result we could have thought about.
Before entering in the Q&A section, I would like to remark that the future is pretty uncertain, but we are pretty sure, and we have also proved in the recent year to manage good years and bad years and always generating a pretty remarkable cash flow and reducing the debt level on a like-for-like basis. That has always been done without forgetting about our shareholders. We were able to combine industrial investment and shareholder remuneration. That's more or less all I have to say. I just leave you with page 21. That's something that is remaining a little bit, the dividend that the board of directors has just approved, how it is compared to the past and also how it's compared to the price of the shares in the assets exchanged.
I just wanted to end my presentation saying that on a like-for-like basis, we are still targeting our net debt to EBIT ratio below one times also for 2025. Now, I will leave you the room for any questions, just reminding you that in any case, we are not in the position to answer any questions regarding the offer on ProSieben because, as you can imagine, we are restricted by confidentiality. The only thing we can say is what has been already announced. Please do not ask me anything more because I will not be in a position to answer. It is now time for you to pose any questions.
Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now go to our first question. One moment, please. Your first question comes from the line of Julien Roch from Barclays. Please go ahead.
Yes. Good evening, everybody. Two questions for Matteo, one for Marco. On page 10, you are giving us for the first time, I believe, your number of hours on demand. Could we get the total number of hours in both countries or the linear hours in both countries? That’s my first question. Then the second one is you gave us Q1, but we have some indication on April. And then the last one for Marco, I know you just said, don’t ask me anything about the ProSieben offer. So I won’t ask anything about the offer.
Once the offer is finished, you are already above 30% because there was a press release today saying you were at 30.09%. According to German regulation, if you have more than 30%, then you can buy the shares in the market. After the offer, I am not asking a question regarding the offer, but after the offer, as you can buy shares in the market without paying a premium, what is your intention post-offer regarding buying ProSiebenSat.1 shares in the market? Thank you.
I will start answering very directly. I mean, we said in the press release that the main intention of the offer was to gain flexibility on the future and having a little bit more to say on ProSiebenSat.1. We have no target in that respect. We will see what will be the outcome and then decide. We do not have any specific plan, and we will decide afterwards also depending on external conditions and specific conditions of the company. No target in that respect.
Okay. Thank you for the question. If I got it right, the question is about how to compare the digital KPIs shown in chart number 10 with the trend of linear television in both countries. Am I right?
Yes. You give us the total, you give us the on-demand hours, so 919 in Italy. Can we get the linear hours or the total hours?
The things I can share is that compared to this double-digit growth trend in total time spent in our, let's say, extended television, so connected TV and digital on-demand consumption, the baseline for linear TV is quite stable in Italy, around zero, minus one, minus two according to different periods.
The combined effect is definitely positive. We are, honestly, in 2024, suffering a little bit more in Spain, where both of us, I mean, Atresmedia and Mediaset España, are suffering for a single-digit decline in linear TV audiences. The interesting thing, as Marco mentioned before, we are investing a lot in our own content, and the initial results in Q1, even in Spain, are quite positive and encouraging results. We have definitely positive results, mainly in prime time. We regained leadership in five peak times out of seven days a week in Spain. That is why I say we are, generally speaking, confident even for the outlook of Q1.
Okay. On April trend? Okay.
Now, with regard to our, if we want to go ahead and just share some initial indicators for outlook Q1, this is what has already been written in our press release.
For the time being, we do not see any negative impact on the group advertising sales in the short term, referring to the macroeconomic uncertainty and the continued tariff overhang weighing on budget. For Q1, we have Italy that is growing around 1% compared to the same period of the last year. It is remarkable the fact that last year in Q1, we grew by 5.7%, while in Spain, the advertising market had a lower start in Q1, also due to the difficult comparison with the same period last year when it grew by 8%. However, as I say, the group sales in Spain are gradually recovering during the quarter, thanks also to the positive encouraging audience results, although they remain slightly negative overall. We can share the fact that overall, the MFE group advertising revenue in the first quarter, 2025, are similar to those we had in the first quarter, 2024. That is it.
Okay. Thank you.
Thank you. We will now take the next question. Your next question comes from the line of Milo Silvestre from Equita. Please go ahead.
Yeah. Good afternoon. Good evening, everybody. Two questions from my side. The first one is a follow-up on advertising. If you can elaborate a little bit more on what you expect on the year. The second one is on the free cash flow guidance, if you could provide some updates on that and if you see achievable level, the EUR 340 million achieved in 2024. Thank you.
I'll start answering to the free cash flow question. I mean, clearly, it's all depending on the top line. It is very hard to answer having a so uncertain at the end as far as visibility. Whatever we can say is that we have proved to convert profit in free cash flow, and it's our main objective. As far as what the market will do, clearly, we cannot do anything about. The only thing is that we need and we will certainly maintain and probably increase our market shares. Cost discipline will allow us to maximize the cash flow. In terms of the absolute amount, honestly, if you give me the top line, I can answer you. I do not have the top line, so it is very hard for me to answer you. Last year was really an outstanding performance, but was also driven by a strong top line development. Unfortunately, no precise answer.
I think that the track record is there to say, and I can confirm that cash conversion and free cash flow generation are our top priority. Nothing else. Matteo?
Okay. Thank you for the question. Regarding what is our outlook for the full year, of course, it's reasonable to say that due to the high uncertainty and volatility of the international macroeconomic environment, it's difficult to say, but we are, let me say, quite positive because I start from the end. My point is we continue to have comparison with 2019, the year first of the COVID outbreak. And it's quite significant because if you consider the last five years' time period, we went through, I mean, when I say we, I mean advertisers, broadcaster agencies, we went through a series of, let's say, black swan situation.
COVID, the outbreak of the war in Ukraine, the energy crisis, high inflation, them down, now the uncertainty and unpredictability of the tariff war. Let me say that there are a lot of lessons learned on the advertiser side, and there are strong reasons for brands to decide that the best course is to stick with existing plans to protect the baseline of their business. Let me say that our offer with television at the core and across media reach offering the best in terms of maximizing reaching for the advertising investor is a safe harbor in times of uncertainty. That means that if we take a look after the Q1 to the remaining part of the year, we do expect that the advertising collection could be expected to be more favorable in the coming quarters because we have some easier comparison with last year.
It is worth mentioning that the group, both in Italy and Spain, and our case for synergy cross-country, we have secured the availability of the free-to-air TV rights of the best peak time match of the first edition of the FIFA Club World Cup that will be held in North America in June and July, while last year our competitors broadcasted the major international sporting events. Let me say that thanks to the short-term stability in advertiser decision on their budget, combined with the strength of our offer, plus the added value of sport events in June, July, the rights of the FIFA Club World Cup, our outlook is combined with limited viewability, but it's moderately positive. I hope to have answered to your question.
Grazie mille.
Thank you. We will now take the next question. The question comes from the line of Andrea Randone from Intermonte. Please go ahead.
Good evening and thanks for taking my questions. Just a couple from me. The first one is about your average cost of financing for 2025, if you can remind us this number. The second one is just an update. I mean, it's a very frequent question, but still, I'm asking if you can tell us something new about EI Towers . So any deal is approaching or not? Thank you.
Yeah. As far as the cost of debt, our plan is that it's going to be below 2%, all included. We are not expecting, frankly, any material changes in that respect. It is also a similar number we had last year. As far as EI Towers is concerned, I mean, clearly, I have nothing to say in particular.
As you know, we are working with RAI. Clearly, it's not a fast process. There are a lot of, let's say, bureaucratic steps to pass through, which clearly we are not so accustomed to, but that's the case. What I can tell you is that I don't see any major step in the near future. We are working. Let's hope that one day or the other, something will happen. For the time being, no foreseeable step in the next week or month. Thank you.
Thank you. Good night.
Okay. Thank you, Marco, and thank you, Matteo. Thank you very much, guys, for your time. As always, the investigation department will be available for any questions you may have. Have a great Easter break.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.