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Good day, and thank you for standing by. Welcome to the Mediaset 2021 First Quarter Results Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today on Wednesday, the 12th of May 2021. I would now like to hand the conference over to your first speaker today, Simone Sole. Please go ahead.
Ladies and gentlemen, welcome to the First Quarter 2021 Results of Mediaset. Today, the speakers are Marco Giordani, CFO of the company; and Matteo Cardani, Managing Director of Publitalia. Given the restriction of time, I will hand over immediately to the speakers. Thank you.
Thank you, Simone. Good morning to everybody. Thank you for your attendance. Today, we comment on Q1 results with a short outlook at the Q2 ongoing indicators. I start, as usual, with a quick view of the economic scenario, commenting number Chart 3. With regard to confidence index, the monthly evolution, both for consumers and business shows a continuous gradual improvement of the economic scenario. We are not far from a sort of normalization of the situation, as you can see from this chart.
Then we move to the advertising market, commenting Chart #4 as you can see, Q1 '21 is slightly below flattish results, minus 1.4%. But with regard to our addressable market, TV and digital are performing definitely well. Positive medium single digit, while radio is still suffering from restrictions applied throughout all the 3 months of Q1 restriction whose impact is definitely stronger on out of home.
Then moving next to Chart #5 here, you have the Q1 '21 result is plus 6.1%, as we announced and anticipated 2 weeks ago in our fiscal year call. The interesting thing is that now if you can appreciate the fact that we are doing -- we are performing 7 points better than the market. And the other interesting thing is that we outperformed the market in each single segment of our addressable market. So we are doing better than market by far in TVM Digital. And our decrease in radio is definitely lower compared to radio market trend.
Then in Chart #6, we comment on strong positive evidence. Q1 is the third quarter in a row that is a positive one. And Q2 will be the fourth positive quarter in a row. So after 3 positive quarters in a row, we are facing a fourth positive quarter with results, honestly, better than expected. And try to understand the pillars on this good business performance and this business resilience throughout all the 4 quarters of the last moving year. I would like to remind and share with you that there are 3 advertising key drivers, totally audience and total video growth. The balance dynamics among economic sectors. And last but not the least, the high level of media diversification in our client base. So let's comment shortly on these 3 points.
And commenting Chart #8. Here, you have on a 2-year basis, the growth in our audience evolution. So here you have linear television, connected television and online video in order to normalize the comparison with Q1 '20 that was affected by the COVID restrictions, the hardest restrictions we have experienced. We made these comparators on a 2-year basis in order to normalize, so you can get from this -- the medium term growth trend of the 3 screens. So we have good performance in total video.
And if we take a look at #9 -- Chart #9, here you have our linear performance so 34.8%. So we start on the same level of 2020 while on digital non-linear audience share performance, we are now 41.6%, and we are growing almost 4 points compared to the consolidated 2020 results that were 37.9%. So our audience -- total audience profile is definitely in a good shape and good health. Then last 2 charts, I want to comment on, we have -- with regards to sector dynamics, we are using this device of the 3R model. So Resilient, Restricted and Restarting sectors.
And if you take a look at the Chart #11, our combined results in Q1, +6.1% is the weighted average outcome of different dynamics. So we have a very well balanced portfolio. So for example, the fast-moving consumer goods and pharma are suffering a little because of the counter digit versus positive sales in Q1 2020. This is more than compensated by Telco, Retail and Over-the-top in the resilient sector clusters. In a similar way, while we do expect an important restart in tourism and product sector from now on. Among those sectors that were restricted last year, consumer durables, mainly those devices for home electronics are doing good. People over the past month, invested more in valuable goods for their homes are waiting to come back and spend out of home in restaurant and travel. So even from this perspective, the Q2 perspective from the point of view of sector contribution should be positive because there will be the still a restricted sector that will join us with their ad spending.
Last but not the least, 2 weeks ago during our fiscal year '20 call, the issue of the degree of diversification of our business was raised. And as you can see in Chart #12, of course, we don't give individual data on a monthly basis or individual data by medium. But in order to highlight and give insights on the good health of our business, from a revenue diversification perspective, we adopted the viewpoint of revenue breakdown by mid innings. So to make it clear. In this chart, you have a clear picture.
So if we consider the whole of our business 100% of our advertising revenues, today, 75% of our revenue are developed by clients that choose from 2 to 5 different media within our offer. So they enter, let's say, our outlet, Mediaset outlet, and they are used to buy to put in their basket TV, Connected TV, Digital, Radio and Digital Audio. So on average, they choose from 2 to 5 different media. And the most important thing is that they are used to be both linear and digital clients. So they have a combined purchase from their media buying perspective. So this is the degree of diversification of our client base.
Completing the comments on the chart, only 7% of our revenues are developed by clients that are buying only linear, I mean, TV and Radio. And 18% of our revenues are developed by Linear TV only clients. So the so-called traditional clients. But the interesting thing, this is the last thing then I hand over to Marco is that among these clients, so those that buy linear TV only 1/3 are new clients. So they are new businesses. So TV still represents the main gateway to enter into our full portfolio. And then we develop our clients into a more diversified media mix. Okay, and I hand over now to Marco.
Thank you, Matteo, and welcome to everybody. I will take you through the quarter results briefly, starting from Page 14, where you have the net consolidated result of the Group. As you can see, I mean, revenue were slightly down versus last year. You have to remember that COVID, let's say, emergency started in Italy in the beginning of March and a little bit later in Spain. So clearly, the comparison in terms of revenue are still affected by noncomparable numbers. But in any case, we were able to stay very close to 2020. If you look at EBIT, on the other hand, we were able to increase our EBIT by 63%, moving up from EUR 41 million to almost EUR 68 million.
And going further down in the P&L, you can appreciate the net profit growth that is -- that has been in the first quarter of 2021 of EUR 52.5 million that is 3.5x higher than the 2020 result. Just to remind you, remember you that this number is even higher than 2019 number. As far as the net financial position, the deleverage is still going on. We improve our position by almost EUR 90 million, and this is an incredible number, also because during the quarter, we have acquired the 3.5% of ProSieben stake for an amount close to EUR 100 million.
Moving down in the Italian P&L. Matteo already commented the advertising revenue in terms of total revenue, we were almost flat on last year. This is because in the other revenue line last year, we had the extraordinary performance of a movie that went out in the cinema. Clearly, this is something that cannot be replicated in the first quarter 2021. But as far as the total revenue line, we still guide the full year for a number close to the 2020 line. Clearly, we are starting from the quarter where we had a lower performance, but our aim and challenge is to catch up this number in the remaining months of the year.
Moving to cost, was a very, very outstanding performance in the quarter. Total costs were lower by EUR 40 million than last year, with a decrease in the region of 9%. And the operating profit line went up from a negative performance of 2020 to a positive EUR 20 million in 2021 with an improvement of EUR 40 million. This number compared to 2019, it's almost double. So again, a great performance not only versus last year that was in circumstance affected by the pandemic, but it's also remarkable if you compare it with 2019, so a pre-COVID performance.
As far as cost line for a full year, we can maintain our guidance that we gave just a couple of weeks ago. Our aim is to keep the cost flat on 2020. This performance will grant us a decrease between 6% and 8% versus the total cost line in 2019. So clearly, this is something we will try to outperform during the year. But I mean that's the guidance we still have, taking in consideration, for instance, that there are going to be quarters that will have a strange comparison versus 2020. For instance, as you can remember, Champions League cost in 2020 has been accounted in the third quarter, while clearly 2021 will be in the second. So -- but I can confirm the guidance for a full year, flat cost from 2020.
Moving below EBIT line, financial income was positive by EUR 17 million. In this slide, we are accounting a positive one-off impact coming from some hedging position on ProSieben stake. That's clearly something will not be replicated in the remaining quarter, but it's something that has been cashed in, in the first quarter 2021. As far as guidance on the full year, we can say that we are going to be flat on 2020. To that flat number, we have to increase the one-off we just mentioned. And as far as associate is concerned, and giving the guidance for a full year, you have to consider the positive impact of the EI Towers, let's say, disposal of TowerTel that will generate around EUR 89 million extraordinary profit on this line for Mediaset. And so that's the reason for which we can improve our guidance of the associate line from EUR 50 million around EUR 110 million.
Moving to investment, another, let's say, pretty cash saving quarter. Investments were, let's say, EUR 100 million lower than last year. Clearly COVID impacted them. As you can imagine, the numbers of, let's say, movies and series delivered in the first quarter has been pretty lower than last year one. But in any case, we are still guiding the full year -- the full year with an investment line in the region of EUR 340 million, EUR 360 million that will account for a decrease versus 2020 in the region of 15%, 20%.
Lastly, cash, again, a very remarkable performance in the quarter. Cash flow from operation grew by more than 30%, reaching the level of EUR 130 million in the first quarter 2001, while the net financial position at the end of the quarter was slightly lower than EUR 700 million with an improvement of almost EUR 120 million in the quarter. As we said in the last call, we are not guiding the full year because many things are going to happen. In any case, on that line, the only thing that I would like to remind you are 2 elements in the last 15 days has happened. One is a dividend payment that will be cashed out in July for EUR 340 million. And the cash-in of the special dividend paid by EI Towers with cash in at the end or of an amount of EUR 134 million. I believe that's all. We are now ready for the Q&A session.
[Operator Instructions]
Your first question comes from the line of Julien Roch from Barclays.
First question for Matteo. Could you give us some indication of the Q2 trends? I mean you're saying it's going to be better than 6.1%, but color on April, color on May. Second question for Matteo again. Thank you very much for Page 12. But how do they buy, though? Do they buy channels separately, but buy several channels? Or do they buy a bundle, where you sell them GRP and they don't know where it's coming from? That's my second question. Third question again for Matteo, Page 8. Year-on-year growth is great, but we have no idea of the base. Your audience could be 97% linear, 1% radio, 1% wave, 1% video-on-demand. So could you give us some idea of the split of your audience in either '19, '20 or Q1? And then the last one, sorry, I know 4 questions is a lot. Marco, peace with Vivendi, relocation to the Netherlands. So when do you think the relocation will be effective? And then the second question on that is next step after that.
Yes, we will start to answer to the last question. The calendar for redomiciliation in Holland, it's pretty let's say, fixed, and the redomiciliation should happen in September. And as far as what's going to happen after, I mean we cannot give any disclosure on that, but we believe that the redomiciliation, it's a leverage to start the consolidation in the media space. So we consider it a strategic move to execute what we are saying that we are seeing in the last 2 years. So Matteo, maybe you can have the long list of Julien's questions.
Yes, yes. So I'll start from the first question. So Q2 trend, just to add some color on April and May. As we wrote in our press release, the first 4 months are above +21%. So it's quite easy for you to calculate that the month of April is absolutely positive. I can state that in the 2 times compared to April 2020, we were in the, let's say, deep down in the lockdown, while probably the strong news is that April '21 is particularly flat, it's parity compared to April 2019. So we are catching up on a 2-year basis with our baseline before COVID.
Of course, monthly performance is not representative of the trend that we might achieve on a full year basis because components will be variable during the next quarter. With regard to May, we are mid-May, and we are halfway on Q2. May is not close yet, but I must admit, but I'm happy about it that we are registering a performance above our own expectations. So we do expect to consolidate and improve further our progression. So May is on a good track and has some similarities with April. But we prefer to comment on the key performance as soon as the results will be stabilized because April good, May is good.
We have to understand the June performance because the advertising trend will be impacted by the European Football Club -- Football Cup, sorry. This will be broadcasted by Rai. So we are not the owner of the Rai. So I guess that by the end of May or beginning of June, we will be in a position to have a better outlook for Q2. Even if my expectation is that June could be anyway positive because even if we don't have sports rights, we are in a general economic situation that is improving day by day, week by week. And so there will be vaccination. So we do expect a sort of positive halo effect also on our revenue collection.
With regard to chart -- a question regarding Chart #12. So how do we manage our cross media offer. We do not create bundle because for many reasons, bundle may be not 100% compliant with some guidelines from the authority. And also because, to some extent, media agencies are quite skeptical about bundles because when you offer a bundle, it's like a present they do like to, let's say, unbundle to understand what's inside. So our approach is starting from -- for the client to create a customized proposal with the best offer. We are looking forward for [indiscernible] to release by the end of this year, beginning of next year, total audience currency because this will definitely help creating a combined offer. And we are, of course, evaluating because in that case, it makes a lot of sense a combined offer linear plus over-the-top offer for Champions League in next autumn. So this will be an important test. And then I'm not 100% sure to got your question on Chart #8. Could you...
So the question is you're giving us the year-on-year split, but we have no idea of the size of the 3 lines. It could be 98% TVL, 1% TVC, 1% OLV...
No. I see your point. As you can see from the footnote in the chart, we are giving year-on-year indicators using 3 different metrics. So average minute rating for linear television, viewers of digital screens for online video and internal data for connected television. For the time being, they are not fully comparable. And that is why we are waiting for the official metrics that will allow us to put all these 3 screens on the same level that is total time spent. And in that case, we can have the total sum for the time being, we have to manage with this separate indicators. Of course, the linear television is the bulk of our audience baseline taking into account that given to the [ switch-off ] plan that is ongoing and then will be accelerated from September 21 to June 22, the connected TV components that is growing faster will be further accelerated by the switch-off and the change in the television sets in Italy. So we do expect that the TV -- connected TV components will be higher and higher.
Sorry, Matteo, may I add just a few things. It's clearly difficult, it's a new business for everyone. And so it's very difficult to exactly modelize the future. But I mean, I would like to add a few comments. First of all, the attention we are generating in terms of hours, it's growing. So -- and that's crucial to evaluate how our contents are perceived and are consumed. So generally speaking, the Group is producing every month, I would say, an amount of hour consumed that is growing. Then we have the problem of monetization of this attention. And what Matteo was saying is that today, the biggest problem is made by the currency because linear TV currency is stable, clear, I mean, well known, you can measure, compare, you can do whatever you want.
Then you're moving to other currency, like online video consumption hours or connected TV consumption hours where currency is not yet stable in the sense that, as Matteo was saying, it's difficult to add let's say, customers or user -- customer -- viewer with user, customer with user and viewer. So that's where, frankly speaking, it's also difficult for us to give you a metric that combines all the consumption. But the only thing that I would say that is very important for us is that attention is growing every month and the people are consuming our content every month more than the month before and that's crucial.
Then metrics currency will come and it will be also the customer, so the advertising investor to decide what kind of attention they would like to have, the linear, the digital, the one with data of the connected Tivu or the one without. And as Matteo was saying, Publitalia Group, it's available to give to the customer exactly what they want.
Yes. I had a comment on your remark, Marco, absolutely appreciated. Just to make it clear, we trade linear television on a cost per GRP basis with the gross rating points as official metrics while connected television and online video, we trade them on a CPM basis. So they are 2 different models. But as we commented last 2 weeks ago, we created an internal metrics. It is revenue per each hour consumed on each single screen and let's say, the interesting thing is that for connected television and online video, the market is now paying us a premium because they are data-driven advertising. So you can have the value of profiling individual data on a digital basis. And this help, let's say, the trading up in the negotiation with clients. So it's a positive perspective. So let's give room to other questions, if any?
[Operator Instructions] Your next question comes from the line of Stefano Gamberini from Equita SIM.
First question from my side. The first regarding the other revenues. Could you elaborate a little bit more about how you can catch up the 2020 level. First quarter was down EUR 25 million. Then if I'm not wrong, also the contract with Sky should probably reduce the contribution. And I'm, in particular, interested to understand if you expect a huge contribution from Mediaset Infinity. Now the launch of this new platform, and in particular, how you can explore your Champions TV rights during the second part of the year?
The second question regarding May. You said that April should be in line with 2019 level. Is May also close to 2019 level, or at the end of the day, is improving, but is by far below 2019? And the third, still regarding this approach of HbbTV online and Connected TV audience. When you are in front of the media agency, your new proposal is so interesting for them that is an alternative option for investing advertising to the search and social players, which are growing a lot in the last years? Or we are still thinking of 2 separated things? On one side, you are still considered as TV -- Vena TV and you are still not able to erode market share to big U.S. players?
So Stefan. I'll start from the question on other revenue. Clearly, you see a single line, but in reality, in the line, there are many components. As you said, I mean, the main differences from 2001 and 2020 is going to be the lack of the Africa release and that, frankly speaking, something we are almost sure that we cannot recapture. As far as all the rest-on the other end, for instance, the Sky contract that, as you said, is due to expire by June. I mean this doesn't mean that it cannot be renewed in the sense that clearly, we are planning that respect. And so there are things that we have not yet renewed that will clearly create positive differences versus 2020.
Another thing we have to remind is the fact that, clearly, on the market, there is today a sort of scarcity of content. So for instant platforms, not only in Italy. But I mean, platforms are clearly looking for content. And so we have the possibility to sell them some library or some maybe Mediaset program. And so all these stuff are clearly the reason for which we are targeting a full year 2021, close to 2020. As far as the Champions League, the Champions League, as has been already said, will be sold included in Infinity, so at EUR 7.99. So the present price of Infinity will allow users not only to watch movies and series, but also to watch the 104 matches of Champions League.
The impact on this -- on the other revenue line, on the other hand, will not be great only because the championship will start in September and so clearly, the numbers of months on which we can rely on it's pretty limited. But in any case, they are clearly contributing to that. So the total bucket is confirmed to be in line with the 2020 number. The single line that is composing the other revenue line will move differently to reach the final target. Matteo, maybe you can answer to your question.
Yes. Thank you, Stefano. With regard to May, we are, let's say, mid-May. So as I said, we are positive. Things are getting better and better. I don't know, honestly, today, where we end with May, we are on a positive track. So we are striving for the best possible results. Our consolidated results will, of course, depend on television, but also to give you some more color also on radio. Radio is a medium that was affected during the first quarter for restrictions. And now that we are facing niche openings, release of social life Radio will be -- will definitely benefit from this. And this will contribute to our overall trend, the consolidated results. I'm positive and optimistic, but honestly, I don't know where we'll end. I do think that by the beginning of June, we will be in good position to comment on the whole Q2 progress. Anyway, I repeat May is doing better than our forecasted, let's say, recovery rate compared to 2020 to 2019.
With regard to connected television, it's a very good question, spot on. So what is the source of business. For the time being, the interesting thing that has a market so we're working with media agencies. But let me say, is also working with a certain degree of cooperation with our broadcaster, we are setting the new standard. We are positioning connected television as an additional hurdle opportunity not replacing linear television, but having incremental reach, incremental frequency profile in geolocalization.
So a new set of additional benefits to the planning, and this is to some extent, also projecting positive light also on the legacy business because media agencies are getting more and more attractive in combining TV linear plus connected television. Our guess is that money in flowing to connected television are coming mainly from the long tail of digital because there's a lot of digital money that goes into not certify, not 100% viewable, not 100% brand-safe website and our guess is that we are absorbing that budget that is reallocated to a brand safe, 100% viewable data-driven innovative connected TV proposition. Hope to have answered.
[Operator Instructions] Your next question comes from the line of Andrea Randone from Intermonte.
My first question is about EI Towers, the book value of your stake, if I'm right, was EUR 455 million, can you update us on the book value after this deal? Is it correct to assume something about EUR 410 million? And in general, about EI Towers, so how do you see the future of your participation in this company? And the second question is about the French regarding [ MC stuff, ] if you can provide an update also regarding a potential with the help of Mediaset Espana if you can elaborate on the price almost about this deal.
Let's start to say something about the EI Towers. Clearly, the accounting is pretty simple. We have said that we have cash in EUR 134 million, and we had a positive impact of EUR 89 million in the P&L. So the difference is what the, let's say, invested a -- accounted invested capital of EI Towers will be reduced. So that's the natural calculation you should do. As far as MCS, as you can imagine, we are not going to say anything different from what we said last time. Clearly, we have to look at all the opportunities in Europe because we are convinced about the benefit of European consolidation.
Everything we were trying to explain as far as new consumption, new metrics, new currency, as you can understand, have a different impact if you are just in one country, or if you can move in more than one country or in the entire Europe. So everything we have commented in this call is something that can be announced and large, if you want, if you can rely on more than 2 countries. So we confirm that we are interested and we are clearly looking at it because it's our professional duty. But I would like also to remind you what I said 2 weeks ago. Our impression is that the seller and the system, it's clearly preferring French solution. So as I said 2 weeks ago, we are participating because we believe it's coherent. But if we follow [ FPL CO and McCo ] declaration -- I mean, the decision has already been taken and will not be Mediaset the selected party. That's clearly a pity for us, but if you are the seller, you can decide what you want. As far as the rest, I have nothing more to say.
We currently have no further questions. [Operator Instructions] And we now have a question from Fabio Pavan from Mediobanca.
Very quick one on my side. I was looking through the audience evolution. And my question is, when we look to the second half of the year, you are confident that increase audience for the radio and ongoing increase in contact for digital screen may eventually offset normalization for linear TV audience that may follow for -- as a consequence of the easing in the restriction for COVID-19?
Yes. My answer is, yes. So we are confident that, let's say, the pattern for the media will be exactly as you described, so keep on going -- growing for digital and connected television, as Marco stated before, recovering for radio. While with regard to television, we are on a solid baseline of, let's say, linear total audience. Also, thanks. I want to stress this fact to the quality of our content. So we are doing quite well with our own production, both entertainment and also scripted content. So now we have a very good line of fiction and TV series. And we know that we have the same pipeline for open. And so we are confident about the audience evolution.
Unless there are -- there are no other further questions. I would -- I will thank you very much for taking the time for this conference. And as always, the Investor Relations team is available for any question or information you would like to have. Thank you very much, everyone, and have a good afternoon. Bye-bye.
That does conclude our conference for today. Thank you for participating. You may all disconnect.