in the First Half of 2004 99th Fiscal Year - FIAT SpA

According to FIEG, the Italian Newspaper Publishers
Association, sales of Italian newspapers during the first part
of 2004 were substantially on a par with the corresponding
period a year ago.
Nielsen Media Research reports that the Italian advertising
market grew by 9.0% in the first five months of 2004, with
major gains posted by the television (up 11.2%) and radio
(up 30.7%) markets. Between January and May 2004, the
newspaper market grew 3.7% by comparison with the
corresponding period of the previous year, while magazine
advertising increased by 2% (source: FCP).
Editrice La Stampa S.p.A. reported an average daily circulation
of about 348 thousand copies, down from 369 thousand at
June 30, 2003. Lower newsstand sales and a reduction in
subscriptions account for this decrease, while the fact that
several tie-ins and joint marketing arrangements with other
papers were discontinued also contributed. During the first
six months of 2004, the Sector continued its brand extension
activities, leveraging the La Stampa brand name through the
sale of publications and related products at the newsstands.
Revenues from these initiatives topped 5 million euros during
the period, more than twice those posted in the first six month
of 2003. La Stampa also continued its efforts to boost readership
by distributing papers to students in the schools, and to build
customer loyalty through contests offering a variety of prizes.
Revenues from the sale of newspapers totaled 34.2 million
euros in the first six months of 2004, remaining at the same
level achieved in the first half of 2003 thanks to the success
of the supplement Specchio, which introduced a new graphic
layout and more complete coverage of news, events and
trends in September 2003.
Advertising revenues amounted to 47.8 million euros, up
from 46.2 million euros for the first half of 2003 despite the
discontinuation of local news sections for Milan and Rome
in December 2003.
Publikompass S.p.A. booked advertising billings in excess
of 181 million euros in the first six months of 2004, 19.1%
more than in the same period in 2003. All media segments
contributed to this growth, with newspaper billings, which
came to 129.6 million euros at the end of the period, increasing
by 10.5%. Excluding additions to the customer base, growth
amounted to 7% with respect to the same period of 2003.
Advertising in periodicals rose by around 26.2% to total
approximately 15 million euros, due in no small measure to
the success of Specchio’s new look in attracting advertisers,
who increased by nearly 20%. Billings from television and radio
advertising reached 36.3 million euros, increasing by 62.4%
thanks to the influx of business from Sky, which had not begun
broadcasting in the first half of 2003. Another noteworthy
contribution came from Rete A All Music, which added 25.1%
to revenues from television advertising.
33
Publishing and Communications — Itedi
Operating performance
The Sector posted net revenues of about 221 million euros
for the first six months of 2004, up from 190 million euros in
the same period last year. The increase of approximately 31
million euros chiefly reflects the positive impact of higher
advertising billings generated by the new contracts signed
by Publikompass, as well as the brand extension initiatives.
Operating income was 9 million euros, a gain of 4 million euros
over the first half of 2003. This improvement was made possible
by the higher margins earned by Publikompass on its expanded
revenue base, and the decline in paper prices.