MFE-MEDIAFOREUROPE NV
MIL:MFEB
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
2.915
4.756
|
Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's Mediaset 2019 9 Months Results Web Phone Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today, Tuesday, the 12th of November 2019.
I would like now to hand the conference over to your speaker today, Simone Sole. Please go ahead.
Ladies and gentlemen, welcome to the 9-month result presentation of Mediaset. Let me introduce immediately the speakers today: Marco Giordani, CFO of Mediaset; and Matteo Cardani, Managing Director of Publitalia. At the end of the speech, we will have the usual Q&A session, and then the Investor Relation department will be available for any questions you may have.
I will hand over to Matteo for the introduction as far as advertising and audience share.
Okay. Good afternoon, everybody. A quick look to macroeconomic scenario and its impact on the advertising market. We had our H1 call just 6 weeks ago, and of course, there are no major changes. The overall scenario is definitely flat. Gross domestic product and household expenditures indicators define a situation of stagnation. Consumption of goods and services are oscillating around 0 and while consumer confidence index is moderately positive, business confidence index is below parity over the past 3 months.
As we shared last time, the economic situation could not be regarded as recessive and the decent relationship between our government and European Union could be, to some extent, beneficial to our country. Our document of economic and finance, including the key measure of the new public balance flow for 2020 is still under discussion and the positive -- possible expansive effect, if any, would be anyway, quite limited.
So having said that, if we move to the advertising market, next chart, published data. Just yesterday, we had published data for the first 9 months. The final picture of market not in perfect health, honestly, we are around minus 5.3% as overall trend, and this reflects the absence, lack of sport events.
For the market as a whole, if we take out the discontinuity of the World Cup, the underlying trend registered for the first 5 months of the year is around minus 4%. And if we take out June-July discontinuity, and we focus on August-September, we could say that TV as a whole, I'm talking about TV market, not Mediaset specifically, is performing quite close to 0, TV was minus 1.2% in August and minus 0.6% in September, while Radio and Digital as a whole are doing good both of them in both months. Therefore, the interesting thing is that our addressable market, if I combine TV plus Radio plus Digital, this performance -- is performing, sorry, relatively better than triple market around minus 4.0% versus an average of minus 5.3%.
Then in the next chart, we have our consolidated results for 9 months is minus 8.7%. This is almost in line with our forecasted progress for current year, including all the possible business discontinuities we continuously mentioned in our past calls. So the discontinuities regarding Pay TV business which were Champions League soccer and the World Cup. The remarkable fact is that 9 months trend recovered almost 2 points versus the H1 trend. We were minus 10.4% and now we are minus 8.7%, thanks to the positive contribution of August and September, as we already commented in the last call.
And if we consider Q3 only, our like-for-like performance is plus 2.2% compared to Q3 2018 without World Cup, and it is even slightly positive, plus 0.2% if we compare to Q3 [ 2017 ]. An interesting thing is that -- that should be underlined is that Mediaset advertising revenue share on total market is still close to 39%, aligned to the expected evolution for current year we shared at the beginning of this year and we are still in the range of our final 2020 target.
Then I move to audience performance. So briefly on audience share, we are a leader by far on commercial target with almost 34 points of audience share and we are benefiting from the full implementation of our editorial model, focus on own programs and own TV properties. As you see in the chart -- below the chart, our September-October linear audience share is improving by 150 basis points year-on-year, so compared to the same period of the 2018. And so the consistency in implementing our editorial model is delivering successful audience results. The start of the new season is good. All our new season start of programs were positive, and we publicly sold out Champions League from September to December.
Last but not the least, as we come down in the last line of this chart, since the end of June, we have also the publishing of new Auditel data for TV content on digital device and this new source confirms and extends the leadership beyond the first screen because our performance is around 40% on extended audience on digital screen.
Okay. Then I move to the last 2 charts. Regarding sector analysis, I have just a few words. Generally speaking, the Italian advertising market as a whole this year is suffering for a significant lack of advertising expenditures in 3 key sectors, mainly Telco with a double-digit decrease. They are pursuing efficiency advertising cuts after 2018 [ had ] impact on the market. Auto market because of the fact that car sales are still negative, and also nonfood sector, mainly personal care and household care, mainly due to budget cutting of larger multinational groups. Of course, we cannot manage the underlying overall trend, and from a sector perspective, even if we defend our market share, the trend reflects the overall market trend. The main sectors that are negatively contributing to advertising market dynamics, as I said, are nonfood, Telco and auto. And to tell the whole story, these 2 sectors were even slightly worse than the market due to the fact that we compare ourselves with the World Cup period. And they are partially compensated by pharma, retail and finance and direct-to-consumer e-commerce where we are being better than the market.
So summing up the main evidence of this 9-month reading after the H1 call. Our revenue share is still close to 39% despite the strong discontinuities that we already mentioned. The Q3 results are positive, and I say the overall trend on the like-for-like basis is plus 2.2% in Q3. And we also said that August was fairly positive, the first month without any discontinuity perform around plus 5%, and even September is positive with a low single-digit positive month. An interesting thing is that if we consider the underlying trend for the first 9 months, is minus 1.3% without discontinuities, so better-than-market trend. Taking into account that in the first 9 months, we concentrate the most part, I would say, the whole of the major discontinuities in our portfolio.
And last but not the least, we have a positive progression in TV audience share year-to-date, as we already commented, thanks to the new editorial model, and we are performing quite good, both on linear and digital.
So having said that, I hand over to Marco for the financial [ review ].
Thank you, Matteo, and good afternoon also from my side. I'll take you quickly through the main financial results of the 9 months. Broadly speaking, we are very happy about the results. They were very, very good, and certainly, we can consider them really outstanding looking at the profitability level.
As you can see from the chart, we closed the 9 months with almost EUR 189 million EBITDA with an improve of almost 60% compared to last year. Net profit was slightly over EUR 100 million, that is more or less 4x compared to last year. The good economic result has been also replicated in terms of financial results. The group financial position at September end was EUR 1,163,000,000 debt, including Mediaset signing a buyback, the acquisition of 9.6% ProSieben stake and the purchase carried out by Mediaset Italia of Mediaset España shares. The adjusted net financial position is EUR 736 million. That exclude the liability according to IRFS 16 (sic) [ IFRS 16 ] and the financial debt arising from the acquisition of the Mediaset Italia stake of ProSieben carried out in May.
Entering in a major detail on the Italian business, clearly, Matteo already spoken about the advertising revenue. Stepping down in the P&L for the other revenue line, we can confirm the guidance of EUR 330 million for the year-end, and we can consider a similar numbers also for next year. As far as total cost is concerned, we showed a reduction in the total cost of EUR 433 million compared to the 9 months of 2018. As you remember, we had -- and we still have a guidance of a reduction of EUR 450 million for the full year, that as I said, that we are going to confirm.
Below the EBIT line, financial charge includes clearly some extraordinary costs related to the ProSieben transaction that has been already disclosed in the 6-month result. The guidance for the full year '19 is around EUR 15 million, 1-5, charges, including also the one-off cost. Regarding the associate, that is clearly including the 40% of EI Towers Holding and the [ ProSieben ] dividends. And we are expecting a full year, let's say, contribution of this line in and around EUR 50 million, 5-0, for the full year. As far as the tax rate is concerned, we are expecting to be in line with the traditional 34% rate.
Moving to investments. No major, let's say, moves on that. We are confirming our EUR 420 million target for the full year '19. And then moving lastly to the cash flow. As I said, it has been a very remarkable number in the 9 months. We ended with EUR 75 million cash generation for core activities compared to almost 0 last year, so a pretty large improvement. Just few explanations. The EUR 170 million of change in working capital is clearly due to the lack of football cash out. That has been already, let's say, forecasted, as you can imagine. And in the equity line investment, we are accounting the 19.3% -- sorry, EUR 19.3 million investment we carried out at the end of September for the purchase of the Mediaset España shares. As you probably have seen, this number grew at the end of October to EUR 31 million and this is allowing us to reach close to 56% of controlling stake on Mediaset España.
The level of the adjusted net financial position in Italy is below EUR 900 million. So it's specifically EUR 872 million, excluding the liability according to IFRS 16 and the financial debt arising from the acquisition of ProSieben stake, and we can confirm the guidance as far as year-end net financial position to stay below one-time net debt-to-EBITDA, excluding the ProSieben deal.
I believe that now it's time for the Q&A session. And so I'll leave it to you at this time.
Okay. Thank you very much, Marco and Matteo. So we're ready to start with Q&A now. Thanks.
[Operator Instructions] And the first question comes from the line of Adrien de Saint Hilaire from Bank of America.
Yes, a few questions for me, please. First of all, can you discuss your expectations for the full year '19 advertising growth? Or if you don't have enough visibility on November-December, if you can comment on how October and perhaps November are shaping? That's the first question. Second question, how confident are you that you will find a resolution with the Vivendi conflicts given the deadline of the 22nd of November? And thirdly, can you tell us what the next steps are with regards to ProSieben, further stake increase, asking for Board seats, maybe? What are you considering from here?
Okay. I'll start answering the first question. I tried to summarize Q4 outlook in these points. Actually, the outlook is deteriorating a bit compared to September because of the fact that you have limited visibility, and visibility is decreasing compared to our usual standard. Just to give you an idea, now we have visibility around 7, 10 days compared to the usual 2, 3 weeks visibility. And moreover, the advertising performance is changing on a weekly basis. And for the reasons, for us, is very difficult to highlight the performance of each single month.
Moreover, in Q4, we have 2 seasonal peaks, very important for our market. One is Black Friday and the other is Christmas. Taking to account that the presence or absence of a few advertising campaigns may change in a positive or negative way this seasonal peak results, and again, all indicators on November are positive, but we want to stay prudent, also because the Black Friday 2019 is delayed by 1-week compared to last year. So it may seem a minor detail, but with such limited visibility, having the Black Friday on the 29 of November instead of the 23 of November means that, today, the 12 of November, my full appreciation of this important seasonal peak is actually very limited. We are collecting campaigns after campaigns, but we want to stay prudent about our Q4 outlook.
And I hand over to Marco for Vivendi and ProSieben questions.
Yes, let me say first that we always been positive regarding a settlement because I believe that companies, generally speaking, prefer to find, let's say, agreements without entering in a court because, clearly, the court is taking time, and sometimes also, let's say, not so efficient in deciding. Having said that, what has happened in the hearing, it's for us a very positive, let's say, show a very positive trend in the sense that the judge in the court of November hearing was, let's say, indicating already a sort of, let's say, settlement of the dispute and Mediaset through its lawyer has already, let's say, expressed to the judge the agreement on this, let's say, proposal. Vivendi was not -- the Vivendi lawyer were not in the condition to say anything in that date. And so that's the reason for which the judge gave option to ask Mediaset and Vivendi a couple of weeks to reach an agreement. So generally speaking, we believe that a settlement is possible, it's very close, because the judge has already indicated what should be, let's say, the assessment. And so, generally speaking, we are positive. In any case, it's a question of 10 days because the 22nd is going to be very short.
As far as ProSieben is concerned, next step was the question. Let me say that for the time being, we are happy with our present stake. And so we are not -- we have not decided any further step and any further move.
So certainly, we can exclude the takeover. That's for sure. But for the time being, we are okay with our present stake. As far as Board seats and whatever, frankly speaking, these are formal things that is not really so interesting for us having a Board seat or not is not really changing, let's say, the future perspective of Mediaset or ProSieben because, clearly, these are rightly governance, let's say, options, but they are not really the reason for which we have invested in ProSieben. As you probably know, and clearly, this is not new for anybody, we are positive for the future of free-to-air sector in Europe, and ProSieben is clearly a big part of it, being Germany, the largest media market in Europe. And that's the reason for which we invested.
And it's also, let's say, a way to reinforce the position in European Media Alliance. It is the place where, currently, all the continental broadcaster, not -- sorry, continental -- the European broadcaster are discussing, let's say, all the future challenges regarding digital and, let's say, the future trend of the industry. And the fact of being in the -- being the largest ProSieben shareholder is for us, let's say, [indiscernible] and we believe that also we can push faster the decision process in European Media Alliance so that real operating solution can be executed because up to now, honestly, the speed of execution has been, in our opinion, not adequate and certainly not in line with the -- what the market is requiring, because clearly, our big and global competitors are moving faster -- faster and faster than we are doing. So we need really to change the gear and to be a little bit more, let's say, operating in finding solutions. So we believe that being the largest shareholder in ProSieben can be of help in that respect.
Actually, if you allow me two follow-ups. Firstly, I don't think, Matteo, you've given an actual number for October. I'm sorry if I've missed it, but can you repeat it again? And then secondly, Marco, do you think that the settlement would include a financial compensation for Mediaset?
We are clearly open to everything. So, will depend -- so today, honestly, it's very hard to say. So -- but not because -- not because I don't want to say because clearly, there are still 10 days in which everything can happen. So as far as I know, for the time being, there are no element that I can disclose because reconciliation has been just started. Maybe you could ask to Vivendi, if they are ready to pay, as I say, all that's a joke. It's a joke sorry. It's too early. I cannot give you an answer.
And the next question comes from the line of Chris Johnen from HSBC.
Yes. Like Adrien, I'd also like to hear the October figure, if you've given it, I also didn't hear it. That's just a follow-up. Then coming back again to the ProSieben investment. I think at the heart of the issue is that, if the ProSieben management's public comments are to be believed, that they don't really see the merit of any kind of combination. And you just mentioned that the stake helps it to faster push execution within the media line. How do you convince someone to sort of join in on MFE that is unwilling to join if you don't push them? I guess my second question.
I Very, let's say, unfortunately, very long answer. And I'm sorry. First of all, I have to say that I didn't find Max really saying something that is in contrast with what we said, in the sense that I read that he said that the, let's say, the bucket of cost at which you can address synergies is limited to 30% because content are local and blah, blah, blah. And in that respect, we are fully aligned, because, if you consider, let's say, for instance the MFE project between Italy and Spain, we are not really saying something different because we are just saying that we are going to save 30% on the 30%. It is the 10% that makes the EUR 100 million savings that we have already disclosed. So in that respect, we are not really saying something that is different.
We agree on the fact that content should stay local. And we agree that the cost bucket in which you can really operate is limited to 30%, but the percentage of potential savings on this 30% is not immaterial, it's 30%. So the combination of the 2 makes the 10% we were mentioning.
So in that respect, we are not really, let's say, on a different side. So that's the first thing I would like to say. The second thing is that, in the last 6 months, let's say, less than 6 months, on when we launched MFE, I believe that what is happening on the continent, it's reinforcing the need of acting together more because, clearly, this is not really something that is concerning synergies of cost savings, it's more regarding opportunity in revenue growth for many reasons. First of all, what is all happening regarding, let's say, HbbTV in Europe that today is addressed differently in the different country is something that, in my opinion, cannot go on because we are really losing growth opportunity throughout the continent. Again, we are not, for the time being, able -- we were not -- sorry, for time being able to act efficiently through European Media Alliance in selling digital inventories because the attempt we did setting up [indiscernible] is something that, for the time being, is resulting almost immaterial for all the participants.
If you forget for a while cost synergies, on which, as I said, we are not really far from what Matteo was saying, in terms of growth opportunity, I believe that throughout Europe, the needs of doing things together faster, it's more important today than 5 months ago. And so I believe that talking, evaluating what we are missing today, we can really find revenue growth and business growth.
Then if this will be executed through commercial agreement, partnership or other kind of technical instrument, in my opinion, is not so important. Between Italy and Spain, we found more effective and more, let's say, yet more effective, let's say, emerging. We have already designed a new operating model that, in our opinion, will deliver fast synergies in the range that we said and will allow also the group to exploit better all the growth opportunity that I was trying to summarize before. If other believe that there are better, let's say, technical instruments, we are really free and open to discuss. The only thing that we want to confirm is that we need scale. And we need scale, mainly not for cost, but for growth. And that's something on which the last 6 months has passed more in favor of doing something together rather than in the opposite direction. And so, that's also the reason for which -- for which I believe that everyone will share this view.
The last thing I would like to say is the alignment of interest for the shareholders because when we started with Spain, the merger, clearly, we started also partnership or commercial agreement or whatever. But the biggest problem in that respect was, let's say, the alignment of interest versus the shareholders because then when you sign a partnership or a commercial agreement, it's very hard to be fair, but not because you don't want because maybe you make some [ mistake ] in respect to all the shareholders. So that's the reason for which we merged with Spain. Because once you are merged, the interest of all the shareholders is aligned by definition. If you, on the other hand, you sign a partnership agreement or a commercial service agreements, then the risk of, let's say, not allocate correctly the value we generate is pretty high. And so that's the reason for which we confirm that we prefer the merge, but we are open to any kind of technical solution to gain scale and to get the revenue opportunities that are on the market and that today are not captured by local operator and that are left to the global one. Matteo?
Okay. I would like to address the question that was raised before. As you know, our standard is not to comment on the single-month performance. We made deliberately an exception -- with an exception commenting on August and September because we were exiting a 12-month in a row period of discontinuity. So just to give you, let's say, the evidence, the appreciation of the fact that our underlying trend was a good underlying trend. So that's why we commented on August and September. And that -- so offering evidence of the fact that the underlying trend for the first 9 months is minus 1.3%. So I come back to the fact that during our H1 call, I underlined that at the end of September, the first 2 weeks of October were looking positive, and this was confirmed but actually, the performance of the second part of October deteriorated. That is why we stay prudent, even if we have a good initial start in November. But as I said, high [ variability ] low visibility and 2 important seasonal peaks, very important for the market because November and December performance are almost, I would say, totally dependent on Black Friday and Christmas sales. So we're waiting for that, and we will comment later on. Thank you.
And the next question comes from the line of Julien Roch from Barclays.
Yes. My first question is, coming back on Vivendi, you said that judge was happy -- or proposed a settlement and you were happy with the settlement. If anything you can tell us on that? Was it made public? Is my first question. The second question is the merger between Mediaset and Mediaset España has been blocked by the Spanish Court. Can you update us on that? And can you tell us whether if you reached a settlement with Vivendi that unblocks the merger? And then the third question is, have you spoken to ProSieben since last night, where when Mediaset España said they bought an extra 5.5%? Has anybody at Mediaset managed to speak to Max? And what did he say?
Yes, probably on the judge, let's say, indication was probably not, let's say, complete in saying. Clearly, she has indicated, let's say, the solution for the assessment of the MFE, let's say, litigation, clearly, because it is what she is judging on. So clearly, she's not really indicating anything else. And that's the reason for which I'm pretty optimistic in the sense that having already indicated what could be the solution for the MFE litigation and we have already stated to her that we agreed on that kind of things. That's the reason for which we are positive. Clearly, once that we meet, then everything can happen. That's clearly, and it is also the reason for which I said it depends very much on Vivendi approach on the rest. But as far as MFE, we are pretty positive.
A few words about Spain, you're right. We filed the appeal, clearly and that has been done last Friday. Now the process requires some formality days in which the court has to formally communicate to the counterparts and things like that, for which we hope to have a date in which, let's say, the appeal will be discussed, let's say, first days -- first 15 days of December. So that's what we are expecting from Spain. Clearly, I wouldn't spend any time to say that we are sure that we are going to, let's say, win the appeal, but that's clearly something that we believe. And so that's the process in Spain.
As far as Max is concerned, clearly, I made a private call to him after the public -- the press release has been published yesterday. Clearly, being a private call, I'm not going to tell you what we said. But generally speaking, it was a pretty open talk and with no specific, let's say, topics to say.
And the next question comes from the line of Stefano Gamberini from Equita SIM.
Just 2 quick questions. The first, regarding the cost guidance, EUR 450 million reduction in '19, could you help us understand what could be the level next year? If I'm not wrong, there was a guidance in the region of [ EUR 1,120 million ] for '20. Is this confirmed or not? Or anyway, if you can comment on 2020 OpEx. The second regarding still Vivendi, in case of no agreement with Vivendi on MFE, could you go ahead alone, even without this agreement to change the bylaw in order to go ahead with MFE deal? Or without an agreement, everything becomes more difficult?
As far as the cost guidance for next year. Clearly, we have the MFE project in the pipeline. And so, clearly, it will be up to us as soon as that MFE will be set to provide guidance that clearly are different from the guidance that we can provide today because we don't have, let's say, standalone scenario available. So unfortunately, we cannot give you the guidance on costs on a standalone basis.
As far as the judge, clearly, the judge would be free to say what she wants, if we don't find an agreement because, clearly, the agreement scenario is that it's a scenario where the judge will confirm what we have agreed on. If we are in a non-agreement scenario, the judge will say what she wants. If she will confirm what she has anticipated, clearly, as we are already available to change what the judge could say or we go on following what the judge would say. So we don't have any problem. But clearly, we are speculating on a scenario that, clearly, we cannot control now because the judge -- it depends on what the judge will say, and we cannot speculate on what she would say.
So if I understood correctly, without an agreement, you need to come back to the judge, and then the judge could give you some indication, if you can go ahead with changing bylaw or not. Is this correct?
No, we have to come back to the -- we have to come back to the judge, in any case, by the 22 -- by the 22nd of November. That's for sure. We can come back with an agreement and if there is an agreement, the judge can only, let's say, ratify what we have agreed on. That's pretty understandable. If we come to the judge saying, unfortunately, we didn't find an agreement, clearly, the judge will take a couple of days in producing -- in publishing a resolution. And depending on which kind of resolution will be, that clearly, we cannot control up to now, we have just, let's say, impression, but clearly, she will write what she wants. At that point, we can provide you, let's say, the next step. But clearly, we are positive because if she confirmed what you said, we can go on, let's say, with some technical adjustments that are not really blocking the deal.
Okay. Just a quick clarification on OpEx guidance. Could you remind us what is the OpEx guidance for MFE in '20?
We don't have -- as you -- we have given to the market the split or the phasing of the savings that was in total more than EUR 100 million until 2021. So in 3 years, actually. And that will be phased and confirmed once the guidance -- this MFE will be set because it will depend also on when that will be operating. So that's the reason for which we are not giving the guidance.
And the next question comes from the line of Richard Eary from UBS.
Yes. Just 3 questions from my side. Just in the slide presentation, you obviously highlighted that auto was particularly weak year-to-date. We had -- that's been obviously similar across other markets. But I think on, in Spain, in 1 of the other calls, they indicated that auto had turned something positive in October. And I'm just wondering whether that's a trend that you were seeing in Italy? Or whether the auto category that's driven a lot of the weakness in the market is still negative as far as you can see it? That's the first question. The second question is in terms of other revenues. Obviously, the guidance is being sort of walked down to the bottom end of that. I'm just trying to understand what's driving that within the other revenue. So if you can just provide some clarity on the drivers for that? And then just the third question in terms of the ProSieben stake. I don't know whether you can expand on why Mediaset España took the stake rather than S.p.A. and we've now increased the stake towards [ 15% ]. Are you happy at this level, where do we go from here?
With regard to the automotive sector, actually, the last 12 months of performance in terms of car sales were not positive, not dramatically negative, let's say, a low single-digit decrease in car sales. But as you know, the impact on the advertising expenditure, it is a little bit amplified. So a high single-digit impact this is up to September. And again, for the last part of the month -- of the year, sorry, we don't have visibility. We are not pessimistic about the sector in itself. There are also a lot of launches in the next year. So it's not a structural situation, is more a [indiscernible] adjustment this year. So not a dramatic situation. And I hand over to Marco for the last question.
Yes. As far as the other revenue is concerned, we said the last time that the guidance for other revenue was EUR 330 million to EUR 350 million. So we gave a range, let's say, 6 weeks ago. The range was due to the actual date of launch of, sorry to be so specific, the [indiscernible] movie that is going to be a blockbuster. It's a movie that last time got EUR 60 million box office records. So clearly, something that can really change a little bit the other revenue line as you can imagine, that we didn't know yet 6 weeks ago, whether it would be launched by Christmas or, let's say, at the beginning of next year. Now we know the date. The date is the 1st of January. And so from the accounting point of view, all the revenue will be, let's say, accounted even if only 10 days after, but the 2020 accounts.
As far as, let's say, Mediaset España decision clearly, as you can imagine, we have shared the view in terms of investing in, let's say, European consolidation. And so clearly, the decision to take the 5% has been taken by them independently. But clearly, they were sharing, let's say, the reason, the rationale of the decision we took in May. So their decision looks to me pretty coherent, even if taken independently from them. What I can say is that we are the largest shareholder with more than 15%. As far as we -- where there are other, let's say, shareholders now that believe in something that is going to happen on European media sector and so in that respect, we are happy with the present stake. So we have no plan, as I said before, to increase the stake right now, even if clearly, decision will be taken, looking at what the market will do and other consideration. But presently, we have no plan to increase our stake.
Just a follow-up. I know it's probably maybe too premature for this. But as we go into [ 2020 ] with the delayed movie release, where do we see other revenues in 2020?
It would be certainly higher than this year because of, let's say, the phasing that I moved, let's say, that, as I explained, is moving [indiscernible] blockbuster movies from 2019 to '20. But then you have also to consider the fact that in the other revenue line in 2019, we are still accounting the first 6 months of premium subscription that clearly today, so in the second, the third and the fourth quarter is not present anymore. So in absolute terms, the numbers will be flattish on this year, composed by a better contribution coming from movie blockbuster and a lower contribution from premiums that clearly disappear.
And the next question comes from the line of Laurie Davison from Deutsche Bank.
First question is just on the ProSieben stake. For the group, will you be sticking with these accounting treatment that you used at the first half stage in accounting for as a long-term financial asset and not a cash and equivalent? That's the first question. And then just come back on this appeal in Spain. If you do lose the appeal, is that the end of the MFE?
So as far as the first question, clearly, as you know, the 9-month result is not [ bulleted ]. So clearly, we -- we're consistent with -- from the accounting point of view, with what we did, let's say, in the first half. But we are discussing with the auditor because the structure of our purchase, and could it is the same that Mediaset España did, is such which is not said that the loans will be accounted as loan or not. But as I said before, for us, it's pretty irrelevant in terms of what it is because we know exactly which kind of, let's say, substance we are accounting. So we have the assets and we have the loan on the listed assets. So it's pretty irrelevant. And in any case, it's not definitive. We are discussing with auditor.
No, regarding Spain, honestly, MFE will be executed in one way or the other. So clearly, today, we have to wait, no other -- it's very -- I believe it's unusual to talk about different paths because that -- it depends on decisions that we cannot control. But MFE makes sense for all the Mediaset stakeholder -- Mediaset and Mediaset España stakeholder. I have to remember that only 1 shareholder took us on the court. So it means that all the rest is not accusing anything to us. So at the end of the day, that's the proof that in any case, the majority of shareholders are for the deal. And the ones that are against the deal, probably they sold, but that's their case, or they have withdrawn. In any case, they have the chance to leave the company if they don't follow or they don't believe the plan is good for them. So we believe that the present shareholding-- stakeholding structure in Italy and Spain are in favor of the deal. So in one way or the other, this MFE will be set up. But as far as timetable, unfortunately, we have to wait what is going to happen in the next week. So I cannot comment on that.
And the next question comes from the line of Omar Sheikh from Morgan Stanley.
A couple of questions from me on ProSieben, if I could. Marco, just maybe, first of all, could you just say whether your -- Mediaset's vision for ProSieben is in line with the strategy and the structure of the company that the current management team has set out? You obviously spent EUR 0.5 billion on buying a stake. So I guess, you guys got a view. It'd be interesting to see whether you are in line with the way management is running the company at this point. That's the first question. And then secondly, do you intend to ask for Board representation?
Frankly, I cannot say any intelligent things on that. Clearly, we have to discuss with them. Probably, we have to present our strategy, they have to present their strategy, and we'll see. Certainly, the markets are different, and it's very hard also to judge it from outside. So I have no comment on their strategy. Clearly, we are looking from outside and it's very hard to judge from outside. It's something that I believe, and I hope we can discuss in the future because I believe that, as I said before, all the local broadcast renewal need to change gear, not for cost savings or maybe not only for cost savings, but maybe for cash flow growth opportunity. And so that's the rationale behind which we should meet and find operating and commercial. As far as the rest, what we did in the past independently, I believe it's less relevant.
And Board representation?
As I said before, probably, you lost the first question. We are not really -- we are available. The -- for us, the Supervisory Board is good, is well staffed. So we are not -- we didn't bought -- we didn't buy the stake to have Board representation. But clearly, we are available. We want to help ProSieben. And so if they believe we can add value, we are ready to participate. But certainly, our first priority is not really to have Board representation in the Supervisory Board of ProSieben. As far as we know, they are working well and sufficiently well. So it's not the rationale for buying a stake in our view.
Okay. And just one other thing, Marco, you said when you first bought that initial 9.9%, there was -- you were a friendly investor and you described yourselves as friendly shareholders. Would you still describe yourselves as that?
Yes.
Okay. I guess we are little bit running out of time, so maybe there is time just for the last question. Thank you.
And the last question comes from the line of Andrea Randone from Intermonte.
Very quickly, the first one is on the appeal in Spain, do you think it is likely that you will wait for a clarification of what is going to happen in Italy to judge about the appeal? And in this case, do you think that the 2 trials can be linked in the opinion of the judge? And the second question is about the EI Towers, if you can share with us if you have any possible project about your stake in this company?
As far as the first question, yes, certainly, the Spanish appeal will be impacted in a sense of, let's say, that the judge resolution in Italy that should be, let's say, out, let's say, between 22nd and I don't know, 25 of November should certainly influence the appeal. Clearly, in our opinion, we influence it positively. But clearly, we'll see. But as I said and I tried to explain before, timing is automatically in that direction in the sense that the appeal discussion in Spain will certainly happen after the Italian judge will decide. And so clearly, I believe that the Spanish appeal will be influenced also by the result of the judge resolution in Italy. And sorry, I didn't get exactly the second question. Can you repeat it?
It was a general question about your project for EI Towers.
Sorry, yes, no news on that. Just to recap, clearly, we are 40% shareholders. We are active shareholders of EI Towers. As we announced when we signed the deal with F2i, we are -- we in the sense that both of us, we are in favor of market consolidation. And we believed and we still believe that the present shareholder structure of EI Towers will be more, let's say, we'll have more chance to participate to the consolidation and actually, since then, a deal has been signed with the ProSieben deal. And so we believe that something is going to happen. Clearly, we are minority shareholders, and we are not really managing the process, but we are positive. So we think that the consolidation will happen and will generate value for Mediaset. And so -- but again, we are not really -- we don't think that any news will come out shortly.
Okay. I think we are done for today. I thank you very much for your attention, and I wish you good evening. Thank you very much, everyone. Bye-bye.
Thank you. That does conclude our conference for today. Thank you for participating. You may all disconnect.