MediaForEurope beats expectations as Italian ad market rises

Mediaset/MediaForEurope (MFE) has published preliminary full-year results that highlighted stellar top and bottom-line growth on the back of a strengthening ad market.

MFE recorded 11% growth in revenue to €2.9 billion and an adjusted operating profit of €476 million, up 52% for the full year. The company’s net profit rose by 169% to €374 million.

Italian ad revenues outperformed the company’s own expectations, the broadcaster said, with growth of 2.4% on the pre-pandemic year of 2019.

The company attributed its growth to its ability to capture a larger share of the audience, with a 34% share of the 15-64 year-old audience segment, rising to 36.3% in January this year.

Revenues in Italy were up 13% to €2 billion.

The bottom line was also boosted by a reduction in TV costs of around €80 million compared to 2019.

The company’s full year-end results are not due to be published until April 27. The unscheduled preliminary release prompted analysts at investment bank Berenberg to reflect that “the beat – at both the top and bottom line – came from advertising”, with Mediaset slightly ahead of the 14.2% aggregated average growth experienced by other players in the TV market. Overall, Italian advertising growth for the period was up 13.1% excluding search advertising.

“The press release points to strong ratings for the group’s various channels, and a continuation of that performance in 2022,” noted the analysts.

In prime time, MFE’s target audience share was 37.4%, ahead of Rai’s 30.9%.

“While we do not have full details of the results, and will not do so for nearly two months, it is clear that these are considerably better than expected, with the beat driven by revenues as opposed to better cost management. While the impact of the events in Ukraine is not yet clear, in terms of how this could affect advertising, the Italian group clearly starts 2022 from a position of strength,” said Berenberg.