Interim Management Statement at September 30, · PDF fileThis Interim Management Statement at...

RCS MediaGroup S.p.A. Via A. Rizzoli, 8 – 20132 Milan

Share Capital €475,134,602.10 - Company Register and Tax Code/VAT No. 12086540155, REA No. 1524326

Interim Management Statement

at September 30, 2016

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Contents Consolidated financial highlights of RCS MediaGroup .............................................................................................................................. 3 RCS Group business profiles ....................................................................................................................................................................... 5 RCS Group performance in the first nine months of the year ...................................................................................................................... 8 Significant events during the third quarter of the year ............................................................................................................................... 18 Events after the reporting date ................................................................................................................................................................... 19 2016 Outlook ............................................................................................................................................................................................. 20 Additional information required by CONSOB pursuant to Art. 114, paragraph 5 of Italian Legislative Decree no. 58/1998 of May 27, 2013 ........................................................................................................................................................................................................... 21 Statement pursuant to Article 154 bis, paragraph 2 of the Consolidated Finance Act ............................................................................... 31

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CONSOLIDATED FINANCIAL HIGHLIGHTS OF RCS MEDIAGROUP

Year

2016 2015 2015

(€/millions)

INCOME STATEMENT

Revenue 709.4 743.0 1,032.2

EBITDA (1) (2) 40.4 5.9 16.4

OPERATING LOSS ( 0.8) ( 74.0) ( 107.0)

Loss before tax and non-controlling interests ( 24.3) ( 101.7) ( 143.3)

Income taxes ( 1.5) 8.3 7.9

Loss from continuing operations ( 25.8) ( 93.4) ( 135.4)

Profit (loss) from assets held for sale and discontinued operations 8.4 ( 33.8) ( 38.8)

Loss for the period/year ( 17.4) ( 126.4) ( 175.7)

Basic earnings per share: continuing operations ( 0.05) ( 0.18) ( 0.26)

Diluted earnings per share: continuing operations ( 0.05) ( 0.18) ( 0.26)

Basic earnings per share: assets held for sale and discontinued operations 0.02 ( 0.07) ( 0.08)

Diluted earnings per share: assets held for sale and discontinued operations 0.02 ( 0.07) ( 0.08)

Sep-30-2016 Sep-30-2015 Dec-31-2015

STATEMENT OF FINANCIAL POSITION

Net capital employed 462.4 651.4 591.9

Net financial debt (3) 382.9 500.0 486.7

Net financial debt - continuing operations 382.9 497.1 530.9

Equity 79.5 151.4 105.2

Average number of employees excluding those involved with assets held for sale and discontinued ope 3,624 3,713 3,704

Average number of employees 3,624 4,037 4,031

3rd quarter

(1) Earnings before interest, tax, amortisation/depreciation and impairment losses. Includes the share of profit and loss of equity-accounted investees. (2) From December 31, 2015, the share of profits of equity-accounted investees is classified on a pre-EBITDA line of the financial statements, and the income statement for the first nine months of 2015 has been restated accordingly. This classification has been deemed more consistent with the substance of the facts as, following the disposal, liquidation or full impairment of non-core equity-accounted investees, this item now includes profit and loss from equity investments the activities of which are strictly functional to group operations. (3) Indicator of financial structure, calculated as current and non-current loans and borrowings less cash and cash equivalents, current financial assets and non-current financial assets recognised for derivatives. Net financial debt as defined by CONSOB in its Communication DEM/6064293 dated July 28, 2006 excludes non-current financial assets. Non-current financial assets relating to derivative instruments at September 30, 2016, September 30, 2015 and December 31, 2015 amounted to zero and, therefore, RCS’s financial ratio at September 30, 2016, September 30, 2015 and December 31, 2015 matches the net financial debt as defined by the abovementioned CONSOB Communication.

This Interim Management Statement at September 30, 2016 was approved by the Board of Directors on November 9, 2016.

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Highlights With the successful completion of the Public Purchase and Exchange Offer of Cairo Communication S.p.A. for all RCS MediaGroup S.p.A. shares (as also described in the paragraph “Significant events during the third quarter”), Cairo Communication S.p.A. became the direct parent of RCS MediaGroup S.p.A. At September 30, 2016, the interest in RCS MediaGroup S.p.A. share capital held by Cairo Communication S.p.A. and its parent U.T. Communication S.p.A. was therefore 59.83%, later increasing to 59.994%. On August 3, Urbano Cairo was appointed Chairman and Chief Executive Officer of RCS MediaGroup S.p.A. As already indicated in the Half-year Report, note that in the first half of 2016, the main terms and conditions of the Loan Agreement were redefined as described in the paragraph “Additional information required by CONSOB pursuant to Art. 114, paragraph 5 of Italian Legislative Decree no. 58/1998 of May 27, 2013”. This Interim Management Statement at September 30, 2016 was therefore prepared on a going concern basis.

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RCS GROUP BUSINESS PROFILES

It should be remembered that in March 2016, a new organisational structure was presented, in line with the expected evolution of the business forecast in the 2016-2018 Business Plan approved by the Board of Directors on December 18, 2015. On completion of the Public Purchase and Exchange Offer of Cairo Communication S.p.A. and the subsequent change of control and appointment of a new Board of Directors for RCS MediaGroup S.p.A., this organisational structure and resulting identification of operating segments are currently under review, particularly in relation to the Sport segment, for which the setup of a specific business unit is planned, combining all La Gazzetta dello Sport and Marca activities, as well as the sporting events organisation activities of RCS Sport S.p.A. and Last Lap S.L., as a unification of operations that has not yet been implemented. At present, Unidad Editorial continues to operate as a single segment and single cash generating unit, as illustrated under “Segment reporting” in the Half-year Report of RCS MediaGroup S.p.A. at June 30, 2016. Given the fact that, at the date of preparation of this Interim Management Statement at September 30, 2016, these assessments of segment consistency - which are also associated with the preparation of a new business plan - have still to be completed, reference continued to be made to RCS Group activities as announced at the beginning of 2016, with the Group retaining the right to carry out any further assessments necessary for preparation of the annual report. Taking the above into consideration, the Group activities can be described as follows. News Italy News Italy is dedicated to the editing, production and marketing of publishing products linked to Corriere della Sera (Corriere publications) and Verticals publishing products (including the Childhood Verticals), as well as television activities for satellite channels. In particular, Corriere della Sera publications include the national newspaper, the leading national news and information daily, in addition to a structured, integrated platform of paper and digital information media, including a network of local titles, the weekly Sette, special inserts and general interest and specialised supplements, as well as the website corriere.it. Verticals products mainly include seven Italian magazines, including weeklies and monthlies and concern the following areas: Women’s (IO Donna and Amica), Home Furnishings and Interior Design (Living and Abitare), Family (Oggi publications) and Men’s & Lifestyle (Style Magazine, Dove). As regards the multimedia domain, Verticals are present with the websites Living.corriere.it, Iodonna.it, Amica.it, Oggi.it, Doveviaggi.corriere.it, Style.corriere.it, Doveclub.it and Abitare.it. In addition, June saw the launch of the new cooking monthly Sano & Leggero, part of the Oggi publications. In addition to these are the Childhood Verticals (Sfera) specialised in the early childhood segment, including the publications Insieme and Io e il mio Bambino, the controlled distribution of boxed sets containing assorted products for mothers, the organisation of events and fairs (Bimbinfiera), the offer of digital products (quimamme.it website and publication websites) and e-commerce and direct marketing functions. The Childhood Verticals (Sfera) are the market leader in Italy, Spain and Mexico with business models similar to the Italian one) and has also had a presence in France with a digital offer for just over one year. Television activities are carried out in Italy, through the company Digicast, which operates in the satellite television broadcasting segment, offering 5 channels on SKY: Lei (channel 127), Dove (channel 412), in addition to the optional channels Caccia (channel 235), Pesca (channel 236) and Lei+1 (channel 129).

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News Italy also includes the activities of Hotelyo S.A., a company operating under the Dove Club name in the on-line travel segment in ‘flash sales’, catalogue and ‘tailor made’ mode, in addition to high-range holiday offers, as well as classified activities, including Trovocasa and, through the company Trovolavoro S.r.l., the market segment dedicated to the search for qualified personnel. Lastly, m-dis Distribuzione Media S.p.A., an equity-accounted investee, which handles the distribution of publishing products, also contributed to the segment’s results, as regards the part of distribution of Corriere della Sera and Verticals. News Spain News Spain is primarily dedicated to the editing, production and marketing of publishing products linked to the newspapers El Mundo (El Mundo publications) and Expansión (Expansion publications), in addition to the Spanish Verticals publishing products. El Mundo publications include the second daily national general interest newspaper in terms of circulation, the associated publishing products and the website elmundo.es; Expansión publications include the leading national business newspaper, the associated publishing products and the website expansión.com. Also included are the Spanish Verticals activities, comprising the women’s magazine Telva, the bookshop activities with the publishers La Esfera de los Libros and A Esfera dos Livros (Portugal) and a multiplex for national digital television broadcasting, through Veo Television S.A. News Spain also includes Logintegral 2000 SAU, a company specialised in the distribution of products in its own portfolio and several other national and international products, and the company Corporation Bermont, an equity-accounted investee, which handles newspaper printing. Sport This segment includes the Group's activities regarding sport, mainly in Italy and Spain. In fact, the editing, production and marketing of publishing products linked to the newspapers La Gazzetta dello Sport (Gazzetta dello Sport publications) and Marca (Marca publications) are included, as well as all sporting event organisation activities of RCS Sport S.p.A. (also through RCS Sports and Events DMCC) with registered office in the United Arab Emirates) and Last Lap S.L. La Gazzetta dello Sport publications include the national newspaper, the leading Italian sports information publication, the weekly Sportweek, special inserts and specialised supplements, the website gazzetta.it, the Gazzabet portal in the on-line football and sports betting sector and, since August 2015, the infotainment GazzaNet website, featuring the latest news and details about the main teams and athletes. In January 2016, following the cessation of activities on the TV channel launched in 2015, a new publishing project linked to Gazzetta Tv was launched online, where some programmes continued such as Gazza Offside and Calciomercato. The Marca publications include the daily newspaper, the leading Spanish sports information publication, the associated publishing products, the top national sports radio station Radio Marca, the website marca.com and the website Marca Apuestas for the on-line football and sports betting segment. RCS Sport organises and manages extremely high profile events, both at national and international level, for a variety of sports (including the Giro d’Italia, the Milano Sanremo, the Tirreno Adriatico, the Dubai Tour and the Abu Dhabi Tour), by providing a full and customised range of services as well as advertising sales activities for third parties.

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Last Lap is one of the leading Spanish agencies specialised in the organisation and marketing of mainly sporting events. It creates tailor-made initiatives for each customer, which includes 360-degree marketing activities and the design and development of strategies implemented by a team of highly qualified, young and creative professionals. Lastly, m-dis Distribuzione Media S.p.A., an equity-accounted investee, which handles the distribution of publishing products, also contributed to the results, as regards the part of distribution of Gazzetta dello Sport. Other Activities

This segment includes the Communication Solutions Division, which handles concessionaire activities on the main group media and some third party publisher media. In particular, the RCS Group manages national print advertising sales for the newspapers of the Monrif group - QN, Il Giorno, Il Resto del Carlino and La Nazione - (“Poligrafici Editoriale”), national print and on-line advertising sales with the publisher Itedi S.p.A. relating to La Stampa and its supplements, La Stampa.it and Il Secolo XIX and Il Secolo XIX.it publications.

The Division is also the concessionaire for domestic advertising sales on a number of minor third-party websites as well as print and on-line advertising sales for some publications distributed in southern Italy. The agreements were entered into with the following publishers: Società Editrice Sud or SES, which publishes Gazzetta del Sud, Gazzetta Avvisi (Friday insert also on-line), Noi Magazine (Thursday school insert) and Gazzetta del Sud.it; Domenico Sanfilippo Editore, which publishes La Sicilia and La Sicilia.it; Editrice del Sud Edisud, the publisher of Gazzetta del Mezzogiorno and Gazzetta del Mezzogiorno.it; and Giornale di Sicilia Editoriale Poligrafica, which publishes Giornale di Sicilia and Giornale di Sicilia.it.

Since 2016, the Division has a domestic print and on-line advertising sales sub-concession agreement with Piemme S.p.A. relating to Leggo and Leggo.it.

Other Activities also include the service structures providing support to other Group companies and business units. These include, in particular, IT, administration and tax, finance and treasury, procurement, legal and corporate affairs, human resources and facility management activities, serving all operating segments. Added to these are the structures responsible for Group-wide policy-making, control and coordination. Lastly, also included are Other Digital Activities comprising direct marketing services, subscriptions and mail order sales managed by RCS MediaGroup S.p.A.’s Direct division, as well as digital development activities carried out by RCS Digital Ventures. Note should also be taken of the contribution paid to support the Fondazione Corriere della Sera, targeted at the cataloguing and custody of the archives of the Corriere della Sera, RCS Group magazines and publishing houses. The Foundation increases the archive and cultural value of its assets through intense activities involving debates, conferences, publications and photographic and documentary exhibitions.

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RCS GROUP PERFORMANCE IN THE FIRST NINE MONTHS OF THE YEAR

Introduction

Transparency Directive II (Directive 2013/50/EU) and related Italian implementing legislation repealed the mandatory preparation of interim reports, deferring any introduction of additional quarterly reporting obligations to CONSOB. Regulations on such matters issued recently by CONSOB will enter into force from January 2, 2017. In this phase, the Group has prepared the Interim Management Statement at September 30, 2016 on a voluntary basis, in continuity with past practices in relation to the Interim Management Statement at March 31, 2016, reserving the right to review this decision after examining and being duly informed on the regulations recently issued. This Interim Management Statement was prepared in compliance with the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) and endorsed by the European Union, and IAS 34 has not been applied.

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The Group's financial highlights and related comments are presented below.

(€/millions) 30 September 2016 % 30 September 2015 % Difference Difference

A B A-B %

Revenue 709.4 100.0 743.0 100.0 (33.6) (4.5%)

Publishing revenue 290.8 41.0 323.8 43.6 (33.0) (10.2%)

Advertising revenue 318.0 44.8 327.5 44.1 (9.5) (2.9%)

Other revenue (1) 100.6 14.2 91.7 12.3 8.9 9.7%

Operating expenses (457.8) (64.5) (505.1) (68.0) 47.3 9.4%

Personnel expense (205.9) (29.0) (220.4) (29.7) 14.5 6.6%

Provisions for risks (4.9) (0.7) (9.9) (1.3) 5.0 50.5%

Allowance for impairment (2.0) (0.3) (3.1) (0.4) 1.1 35.5%

Share of profits of equity-accounted investees (3) 1.6 0.2 1.4 0.2 0.2 14.3%

EBITDA (2) 40.4 5.7 5.9 0.8 34.5 584.7%

Amortisation of intangible assets (27.7) (3.9) (28.8) (3.9) 1.1

Depreciation of property, plant and equipment (12.8) (1.8) (14.7) (2.0) 1.9

Depreciation of investment property (0.5) (0.1) (0.5) (0.1) 0.0

Other impairment losses on non-current assets (0.2) (0.0) (35.9) (4.8) 35.7

Operating loss (0.8) (0.1) (74.0) (10.0) 73.2

Net financial expense (23.7) (3.3) (26.1) (3.5) 2.4

Gains (losses) on financial assets/liabilities 0.2 0.0 (1.6) (0.2) 1.8

Loss before tax (24.3) (3.4) (101.7) (13.7) 77.4

Income taxes (1.5) (0.2) 8.3 1.1 (9.8)

Loss from continuing operations (25.8) (3.6) (93.4) (12.6) 67.6

Profit (loss) from assets held for sale and discontinued operations 8.4 1.2 (33.8) (4.5) 42.2

Loss before non-controlling interests (17.4) (2.5) (127.2) (17.1) 109.8

(Profit) loss attributable to non-controlling interests 0.0 0.0 0.8 0.1 (0.8)

Loss attributable to owners of the parent (17.4) (2.5) (126.4) (17.0) 109.0

(1) Other revenue mostly refers to revenue from the television activities of News Italy and News Spain, revenue associated with events and exhibitions in Italy and Spain, e-commerce revenue and revenue from the sale of customer lists as well as children's boxed sets by companies in the Sfera Group, which are classified within News Italy. (2) Earnings before interest, tax, amortisation/depreciation and impairment losses. Includes the share of profit and loss of equity-accounted investees. (3) From December 31, 2015, the share of profits of equity-accounted investees is classified on a pre-EBITDA line of the financial statements, and the figures for the first nine months of 2015 have been restated accordingly. This classification has been deemed more consistent with the substance of the facts, as following the disposal, liquidation or full impairment of non-core equity-accounted investees, this item now includes profit and loss from equity investments, the activities of which are strictly functional to group operations.

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Macroeconomic and reference market performance In Italy, the GDP for the second quarter of 2016 (latest available figure) remained unchanged compared to the previous quarter, and saw a 0.8% increase on the second quarter of 2015. On an annual basis the change is +0.7%. (Source: ISTAT). Spanish GDP disclosed growth of 0.7% in the third quarter of 2016 compared to the previous three months, and 3.2% growth on an annual basis (Source: INE). At international level, the deceleration of global trade and slowdown of the Euro Area economy continue, with a decline in industrial production. (Source: ISTAT) At the end of August 2016, the advertising market increased by 3.2% compared to the same period of last year. In the print media segment there was an overall downturn of 4.7%: newspapers dropped by 5.4%, with a trend for national business of -4.6%), and magazines were down by 3.6% (Source: Nielsen). The on-line segment also fell by 1.6% over the same period of the previous year (Source: Nielsen). The advertising market for general television programmes (Source: Nielsen) was up 7.8% compared to the same period of 2015. In Spain in September 2016, there was a 3.4% increase in the gross advertising sales market compared to the same period of 2015 (Source: i2p, Arce Media). The newspapers market fell by 6.9%, magazine market was down by 3.7% and supplements registered a drop of 15.9% compared to the same period in 2015. Internet market saw a 14.8% increase. In terms of circulation, in Italy the unfavourable market trend continues even in the first 8 months of 2016. Specifically, the distribution of paper copies of general interest newspapers (with circulation exceeding 50 thousand copies) in the first eight months of 2016 was down by 11.3% (Source: ADS figures, January-August 2016). Also including digital copies, the market would stand at 13.3%. In the first eight months of 2016, sports newspapers showed a decrease of 8.2% (Source: ADS figures, January-August 2016) compared to the same period of 2015 (including digital copies, the decrease would be 8.3%). The average audience of paid-for satellite television channels, down 7% at September 2016 compared to the same period of last year (Internal source from data processed by Auditel), achieved a share of approximately 6.9% of the total Television audience in September 2016, (Internal source from data processed by Auditel). In September 2016, the sales performance on the Spanish newspapers market declined compared to the same period of 2015. Circulation figures until September (Source: OJD) regarding the general interest newspaper market (those with a circulation of approximately 70 thousand copies) show an overall reduction of 10%. The fall in the circulation of business newspapers was 10.9% in the same period. Daily sports newspapers saw the same trend, down by 7.3%.

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Segment results

The Group’s consolidated revenue at September 30, 2016 amounted to €709.4 million, down 4.5% compared to the same period of last year.

The main changes influencing this decline are summarised below:

3,6709.4

415.5

News Italy

‐5.2

Sport

‐3.6

Other Activities

News Spain

391.4

318.0

327.5

‐28.4

Revenue September 2016

Revenue September 2015

‐4.5%

743.0

(€/mil lions)

of which

Add‐ons: ‐7.2 +0.1 ‐2.7

‐15.5 Advertising‐12.9 Publishing/Other


+9.0 Advertising‐5.4 Publishing/Other


Publishing/Other

Advertising

Source: Management Reporting

The decrease of €33.6 million is attributable to publishing revenue for €33 million and to advertising revenue for €9.5 million, whereas an increase was seen in other revenue (+€8.9 million).

Publishing revenue by business area is presented below: (€/millions)

First 9 months 2016

First 9 months 2015

Change % Change

News Italy 121.9 136.3 (14.4) (10.6%)

News Spain 60.4 68.6 (8.2) (12.0%)

Sport 109.1 119.7 (10.6) (8.9%)

Other Activities and eliminations (0.6) (0.8) 0.2 (25.0%)

Total distribution revenue (1) 290.8 323.8 (33.0) (10.2%)

Publishing revenue

Source: Management Reporting (1) Publishing revenue from add-ons at September 30, 2016 totalled €51.3 million, of which €24.9 million attributable to News Italy, €24.2 million to Sport and €2.2 million to News Spain. At September 30, 2015 the total was €61.5 million, of which €32.4 million related to News Italy, €27.2 million to Sport and €1.9 million to News Spain.

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Total publishing revenue amounted to €290.8 million, compared to publishing revenue for the first nine months of 2015 of €323.8 million. The €33 million overall decrease is attributable in particular to:

Lower publishing revenue of News Italy (-€14.4 million). The change of €7.5 million is due to the

different publishing plan adopted for add-on products, characterised each year by the launch of new and different products that are difficult to compare with the previous year. The remaining decline was due to the contraction in publishing revenue for Corriere pubblications (-€3.7 million) and for Verticals (-€2.4 million) publications. Corriere della Sera recorded an average of 391 thousand copies distributed, a decrease of 11.1% compared to the first nine months of 2015 (including digital copies, decreasing due to expiring promotional contracts) (Internal Source). This publication’s leadership in the reference market segment was confirmed. (Source: ADS January-August 2016). The main digital performance indicators show that average monthly unique browsers for the corriere.it site reached 40.8 million in the first nine months of 2016 (+4.2% compared to 2015), and the average unique browsers on weekdays totalled 2.6 million (+3.9% compared to the first nine months of 2015) (Source: Adobe Analytics). At the end of September, there were more than 35 thousand paid website subscriptions.

The decline of €8.2 million in News Spain publishing revenue was associated primarily with the decrease in distribution revenue of €4.9 million relating to El Mundo (-11.4% compared to the first nine months of 2015), whilst publishing revenue of the business information newspaper Expansion decreased by €1 million (-10.9% compared to the same period of 2015). This change was primarily the result of the market trends described above, in addition to the effects of the different promotional policy adopted by Unidad Editorial, and was partially mitigated by the increased cover price of El Mundo, which rose from €1.40 to €1.50 for the Monday-Friday editions starting in February, and by the price increase for Expansion from €1.90 to €2 from Monday to Friday from January 2016. The average daily circulation of copies of El Mundo and Expansion (including digital copies) stood at 134 thousand and 36 thousand copies, respectively (Source: OJD). As regards on-line activities, the average monthly unique browsers (source: Adobe Analytics) of elmundo.es reached 41.7 million in the first nine months of 2016 (+11.3% compared to the figures in the same period of 2015), and average weekly unique browsers (from Monday to Sunday) amounted to 3 million (+14.1% compared to the same period of 2015). The average monthly unique browsers of expansión.com reached 9.2 million unique users in the first nine months of 2016, up by 17.3% compared to the same period in the previous year. Average daily unique browsers (Mon.-Sun.) totalled 0.5 million (+19.4% compared to the same period of 2015) (Source: Adobe Analytics).

The fall in publishing revenue of the Sport segment was €10.6 million. Of this decrease, €3 million was due to lower revenue from add-ons. For the remainder, €1.3 million is attributable to La Gazzetta dello Sport and €6.3 million to the Spanish publication Marca. These performances, penalised by the reference market declines, and in Spain also by the adoption of a different promotional policy, were partly offset in Italy by the cover price increase for La Gazzetta dello Sport to €1.50 with effect from June 2015. In detail, the decrease of 13.3% in Marca publishing revenue with respect to the first nine months of 2015 would fall to 4.8% excluding the effects of the different promotional policy adopted for the related positive impact on EBITDA. Total distribution of La Gazzetta dello Sport in the first nine months of 2016 came to 216 thousand copies per day on average (including 26 thousand digital copies on average - Internal Source). The circulation of sports daily Marca reached a daily average of roughly 150 thousand copies, including digital copies (Source: OJD). As regards on-line activities, the site gazzetta.it recorded 26.3 million average unique browsers per month in the first nine months of 2016 (up 21.8% compared to the same period of 2015). The average unique browsers on weekdays totalled 2.1 million, up by 23.8% compared to the first nine months of 2015 (Source: Adobe Analytics). At the end of September 2016, marca.com reached 40.3 million average unique browsers per month, with daily (Mon.-Sun.) unique browsers averaging 4.3 million, substantially in line with the first nine months of last year (Source: Adobe Analytics).

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Advertising revenue by business area is presented below:

(€/millions)

First 9 months 2016

First 9 months 2015

Change % Change

News Italy 129.1 144.6 (15.5) (10.7%)

News Spain 71.9 73.4 (1.5) (2.0%)

Sport 87.2 78.2 9.0 11.5%

Other Activities and eliminations 29.8 31.3 (1.5) (4.8%)

Total Advertising Revenue (1) 318.0 327.5 (9.5) (2.9%)

Advertising revenue

Source: Management Reporting (1) Advertising revenue from add-ons at September 30, 2016 totalled €0.5 million and refer to Sport. At September 30, 2015 the total was €0.6 million, of which €0.1 million related to News Italy and €0.5 million to Sport.

Total advertising revenue amounted to €318 million, compared to €327.5 million for the first nine months of 2015, marking a decrease of €9.5 million (-2.9%). Excluding advertising revenue relating to the activities of Gazzetta TV and Sfera China from the figure for the first nine months of 2015, as these businesses were subsequently suspended, revenue would have declined by around 2.1%. This performance is largely attributable to News Italy (-€15.5 million) and secondly to News Spain (-€1.5 million) and Other Activities (-€1.5 million), most of which was offset by the increase in advertising revenue recorded by Sport (+€9 million; +€11.5 million if the effects of the suspension of Gazzetta TV activities are excluded). In particular, Sport advertising revenue benefited from the positive performances of La Gazzetta dello Sport (+15.5%) and Marca (+11%), aided by the market stimulus generated by the European Football Championships and, specifically for the Spanish publication, the final of the Champions League between Madrid’s two teams. RCS Sport also contributed to the increase in advertising revenue, recording a 21% growth compared to the first nine months of 2015, mainly due to revenue associated with the Giro d’Italia, the various editions of Color Run and the Dubai Tour, as well as the effect of advertising revenue linked to the National Serie B League. The most significant decline in advertising revenue was recorded by News Italy, and in particular the advertising revenue of Corriere della Sera publications (-11.7% compared to the first nine months of 2015), penalised by comparison with a 2015 that included EXPO-driven effects. Other revenue by business area is presented below: (€/millions)

First 9 months 2016

First 9 months 2015

Change % Change

News Italy 22.7 21.2 1.5 7.1%

News Spain 18.0 13.5 4.5 33.3%

Sport 52.4 47.2 5.2 11.0%

Other Activities and eliminations 7.5 9.8 (2.3) (23.5%)

Total other revenue (1) 100.6 91.7 8.9 9.7%

Other revenue

Source: Management Reporting (1) Other revenue from add-ons at September 30, 2016 totalled €2.6 million, of which €0.3 million due to News Italy, €2.2 million to Sport and €0.1 million to News Spain. At September 30, 2015 the total was €2.2 million, of which €1.9 million related to Sport and €0.3 million to News Spain.

Total other revenue amounted to €100.6 million, compared to €91.7 million for the first nine months of 2015 (+€8.9 million). This change is the result of other revenue of the Sport area and, in particular, events organised by RCS Sport (+€4.7 million) and Last Lap, a Spanish subsidiary (+€0.8 million). News Spain contributed to the overall increase as a result of the launch (by Veo Television S.A.) of the new GOL Television channel to replace Canal 13.

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On March 5, Corriere della Sera reached its 140th anniversary, with a number of cultural initiatives to celebrate this occasion together with readers. In particular, a series of meetings were held targeting schools, in order to create a link with young people, and a number of events at symbolic places in Naples “Casa Corriere – la libertà delle idee” (freedom of ideas). On April 3, La Gazzetta dello Sport celebrated 120 years of history with a special edition printed on green paper, just like the very first edition in 1896. On the opening day of the European Football Championships, however, it was printed on green, white and pink paper for the first time in its history. Among the publishing initiatives in the period just ended, of note where the major journalist investigation Bello dell’Italia, dedicated to the beauty of the country and still in progress, and the Il Tempo delle Donne Festival. In Spain, the new Marca apuestas application for Apple and Android devices was launched in April. This fast, intuitive app was designed to simplify betting and give users the opportunity to bet on live events.

*******

EBITDA for the first nine months of 2016 amounted to €40.4 million, up by €34.5 million compared to €5.9 million in the first nine months of 2015.

If the comparison excludes non-recurring expense of €10.6 million in the first nine months of 2016 (€12.8 million in the same period of 2015), the increase in EBITDA would be €32.3 million and therefore be greater than the improvement expected by the RCS Group for the whole of 2016. The improvement is due mainly to the constant cost reduction activities, with benefits totalling €51.7 million, of which €37.7 million in Italy and €14 million in Spain. Aiding this development is the streamlining of activities resulting both in the suspension of the broadcasting of Gazzetta TV and in the closure of Childhood Verticals in China (+€7.5 million in total).

Non-recurring expense for the first nine months of 2016 includes €8.3 million as the expense incurred as part of the public offers launched on RCS MediaGroup S.p.A. shares and for changes made in top management.

Summarised below are the total revenue, EBITDA and EBITDA before non-recurring expense, itemised for the different Group activities:

(€/millions)

Revenue

EBITDA BEFORE

NON-RECURRING

EXPENSE

% of revenue

EBITDA% of

revenueRevenue

EBITDA BEFORE

NON-RECURRING

EXPENSE

% of revenue

EBITDA (3)% of

revenue

News Italy 273.7 22.0 8.0% 19.5 7.1% 302.1 12.0 4.0% 10.3 3.4%

News Spain 150.3 1.6 1.1% 1.6 1.1% 155.5 3.1 2.0% (7.6) (4.9)%

Sport 248.7 38.6 15.5% 38.6 15.5% 245.1 21.5 8.8% 21.8 8.9%

Other Activities 36.7 (11.2) (30.5)% (19.3) (52.6)% 40.3 (17.9) (44.4)% (18.6) (46.2)%

Consolidated (2) 709.4 51.0 7.2% 40.4 5.7% 743.0 18.7 2.5% 5.9 0.8%

First 9 months 2016 First 9 months 2015 (1)


(1) The figures at September 30, 2015 were restated consistent with the view adopted at September 30, 2016. (2) Advertising revenue and costs (including structural costs) relating to the Italian advertising concessionaire and limited to advertising sales of the RCS publishers have been allocated to the individual pertinent operating segments in the first nine months of 2016 and the first nine months of 2015. (3) From December 31, 2015, the share of profits of equity-accounted investees is classified on a pre-EBITDA line of the financial statements, and the figures for the first nine months of 2015 have been restated accordingly. This classification has been deemed more consistent with the substance of the facts, as following the disposal, liquidation or full impairment of non-core equity-accounted investees, this item now includes profit and loss from equity investments, the activities of which are strictly functional to group operations.

14

The change in EBITDA before non-recurring expense with respect to September 30, 2015 is presented below.

6,7

17,1

10,0

51,0

18,7

Sport EBITDA before non‐recurring expense ‐September 2016

Other Activities

News Italy

‐1.5

EBITDA before non‐recurring expense ‐September 2015

News Spain

‐32.3

(€/millions)

18.7

10.0

17.1

6.7 51.0


Personnel expense decreased by €14.5 million compared to the first nine months of 2015, also due to the cost containment action referred to previously. This change, excluding net non-recurring expense from the item for the first nine months of 2016 (€4 million) and the first nine months of 2015 (€6.1 million), would be €12.5 million and is due to reduced costs (also as a result of effects of the solidarity regime) and to a decrease in the average headcount (-89 staff compared to the same period in 2015, excluding average headcount for the Books business area). In particular, the average headcounts (without considering effects generated by adoption of the solidarity regime) fell from 3,713 for the first nine months of 2015 (excluding the Books business area) to 3,624 in the first nine months of 2016. This change of 41 in the average headcounts refers to the Unidad Editorial Group (-141 in reference to the current staff trend compared to the same period of 2015) achieved as part of the action envisaged in the RCS Group strategic plan, the digital transformation process and the redefinition of the business model, also through agreements signed with employee representatives that plan the exit of 160 employees during 2016. Employees working in the Group’s foreign operations accounted for approximately 42% of the Group’s average total at September 2016. With regard to the exact headcount (again excluding the Books business area, sold in April 2016, from the comparison), at September 30, 2016 the RCS Group had 3,471 employees of which 168 on temporary contracts, down 194 on September 30, 2015. The trend in the workforce was also characterised by hiring for the new business/activities or for stabilisation as a result of the new regulatory structure introduced by the Jobs Act, more than offset by efficiency drives and transactions involving a change of scope. In addition, the exact headcount at September 30, 2016 includes 1,023 people in Italy working under solidarity arrangements, with a reduction in working hours from 15% up to a maximum of 30% (144 journalists for the publication La Gazzetta dello Sport and 879 other non-editorial staff), and 138 journalists in the Verticals and Sfera segments placed in the CIGS government-sponsored layoff scheme.

The share of profit of equity-accounted investees amounted to €1.6 million, recording a €0.2 million increase compared to the same period last year. This is essentially attributable to the Corporación Bermont S.L. investee in Spain and the m-dis Distribuzione Media S.p.A. investee in Italy.

15

The operating loss improved by €73.2 to reach -€0.8 million, compared to the operating loss of €74 million relating to the first nine months of 2015, due the phenomena described above and to lower amortisation and depreciation for a total of €3 million. It is also important to note that impairment losses (€35.9 million) had been recorded in relation to Unidad Editorial publications in the same period of 2015.

Net financial expense improved by €2.4 million, decreasing from €26.1 million in the first nine months of 2015 to €23.7 million in the first nine months of 2016. This reduction is essentially due to lower interest accrued on the net financial debt, as a result of both the reduction in average exposure and the drop in interest rates (including the incidence of hedging derivatives). These effects were only partly offset by the negative contribution from discounting at September 30, performed as usual on certain financial statement items. Assets held for sale and discontinued operations posted a profit of €8.4 million in the first nine months of 2016 (a loss of €33.8 million in the same period of 2015), relating to the discontinued Books segment). In particular, at September 30, 2016 the item included realisation of the translation reserve recorded at the time of disposal of the investee RCS Libri. In the comparison period, the item mainly included the impairment losses recorded on net assets of the RCS Libri group to take into account the price agreed in the preliminary sale agreement signed on October 4, 2015, and an estimate of related accessory sales expense. In addition, at September 30, 2015, income of €1.1 million arose from the adjustment of previous impairment losses on the equity investment in the Finelco Group, to align its carrying amount with the final sale price. Income taxes stood at a negative €1.5 million at September 30, 2016, compared to a positive €8.3 million in taxes at September 30, 2015. Of these, €1.8 million refer to IRAP, €0.7 million to prior years’ taxes and foreign companies, and are partly offset by the reversal of deferred tax liabilities for €1 million. The change of -€9.8 million compared to September 30, 2015 is due primarily to the effects on 2015 of deferred tax assets relating to the tax loss emerging from the Italian Tax Consolidation and the release of deferred tax liabilities following impairment losses recorded in 2015 on Unidad Editorial Group publications.

The loss for the first nine months of 2016 amounted to -€17.4 million, recording a €109 million improvement compared to the same period of 2015 and reflecting the trends described above.

16

Reclassified statement of financial position

(€/millions) Sep-30-2016 % Dec-31-2015 %

Intangible assets 399.0 86.3 416.0 70.3

Property, plant and equipment 91.1 19.7 102.4 17.3

Investment property 21.5 4.6 21.5 3.6

Financial assets 198.7 43.0 205.1 34.7

Non-current assets 710.3 153.6 745.0 125.9

Inventories 18.8 4.1 21.4 3.6

Trade receivables 234.1 50.6 282.0 47.6

Trade payables (297.9) (64.4) (284.2) (48.0)

Other assets/liabilities (53.0) (11.5) (83.4) (14.1)

Net working capital (98.0) (21.2) (64.2) (10.8)

Provisions for risks and charges (54.1) (11.7) (57.7) (9.7)

Deferred tax liabilit ies (57.0) (12.3) (57.9) (9.8)

Employee benefits (38.8) (8.4) (40.1) (6.8)

Net operating capital employed 462.4 100.0 525.1 88.7

Net capital employed from assets held for sale - - 66.8 11.3

Net capital employed 462.4 100.0 591.9 100.0

Equity 79.5 17.2 105.2 17.8

Non-current financial liabilit ies 343.5 74.3 15.6 2.6

Current financial liabilit ies 49.0 10.6 517.7 87.5

Non-current financial liabilit ies recognised for derivatives 6.6 1.4 11.0 1.9

Non-current financial assets recognised for derivatives - - - -

Cash and cash equivalents and current financial assets (16.2) (3.5) (13.4) (2.3)

Net financial debt - continuing operations 382.9 82.8 530.9 89.7

- - (44.2) (7.5)

Total net financial debt (1) 382.9 82.8 486.7 82.2

Total sources of financing 462.4 100.0 591.9 100.0

Net financial debt (liquidity) of assets held for sale

(1) Indicator of financial structure, calculated as current and non-current loans and borrowings less cash and cash equivalents, current financial assets and non-current financial assets recognised for derivatives. Net financial debt as defined by CONSOB in its Communication DEM/6064293 dated July 28, 2006 excludes non-current financial assets. Non-current financial assets recognised for derivatives at September 30, 2016 and December 31, 2015 amounted to zero and therefore RCS’s financial ratio at September 30, 2016 and December 31, 2015 coincide with the net financial position as defined by the above-mentioned CONSOB Communication.

Net capital employed amounted to €462.4 million and reports a net decrease of €129.5 million compared to December 31, 2015. Excluding the effects of disposal of the investee RCS Libri, the overall decrease would be €62.7 million, resulting from a reduction in non-current assets (€34.7 million) and in particular the decline in intangible assets (-€17 million) and property, plant and equipment (-€11.3 million). Net working capital was also down by €33.8 million due to seasonal factors. These trends are partially offset by a decrease in provisions by €5.8 million, essentially used to continue implementing the restructuring plans. Equity recorded a reduction with respect to December 31, 2015 amounting to €25.7 million. In particular, Group equity fell by €24.8 million, while non-controlling interests decreased by €0.9 million. The change in Group equity is essentially due to the loss for the period, net of realisation of the translation reserve for the Books business area. Also note the decrease in the negative equity transaction reserve, essentially due to acquisition of the non-controlling interests in Digital Factory, a company that managed the activities of Gazzetta TV in 2015, and a number of non-controlling interests of the Unidad Editorial Group. These trends were only partially offset by the increase in the hedging reserve (€+2.3 million). Total net financial debt amounted to €382.9 million, recording a decrease of €103.8 million compared to December 31, 2015 due mainly to the collection of €127.1 million related to disposal of the equity investment in RCS Libri (partly offset by the effects of deconsolidation of the related positive net financial position at December 31, 2015 and the payment of certain accessory sales expenses), added to which is the positive contribution from ordinary operations, up by around €46 million compared to the first nine months of 2015.

17

The overall change also includes outlay incurred for non-recurring expense (approximately €38 million) and for new capital expenditure (around €19 million). (€/millions)

-383-19

-44-487

-38

+104

+ 40 vs Prev. Year

+ 8 vs Prev. Year

‐14 vs Prev. Year ap

+ 46 vs Prev. Year

5124 76

Net financial debt Dec‐31‐2015

NFP Books Dividends Capital expenditure

Other Ordinary operations

Net financial debtSep‐30‐2016

Acquisitions/Disinvestments

Source: Management Reporting, which analyses the main changes in total net financial debt.

It should also be remembered that on June 16, 2016 the company and the Financing Banks signed the Agreement for Restructuring of the Original Loan Agreement, resolving the previous non-compliance with the covenants which, at December 31, 2015, had resulted in classification of the Loan as current in accordance with IAS 1.74. Consequently, this Interim Management Report shows the classification of the short-term (€20 million) and long-term (€332 million) portions of the loan.

18

SIGNIFICANT EVENTS DURING THE THIRD QUARTER OF THE YEAR

Public purchase and exchange offer promoted on RCS shares The third quarter of 2016 saw the successful conclusion of the public offer for purchase or exchange of RCS MediaGroup S.p.A. shares by Cairo Communication S.p.A., which therefore became the direct controlling entity of RCS MediaGroup S.p.A. with a 59.693% interest in the share capital. On July 29, RCS announced that it had received, from Cairo Communication S.p.A., as RCS MediaGroup S.p.A. shareholder, which - at said date - held 254,785,320 shares, representing 48.82% of the company’s share capital, a request to call RCS’s ordinary shareholders’ meeting pursuant to Art. 2367 of the Italian Civil Code to resolve upon the following agenda:

1. Revocation of the Board of Directors in office. 2. Appointment of the Board of Directors and the Chairman, based on the prior determination of the number, term of office and remuneration of the members of the Board of Directors, and exemption of the directors from the non-competition obligations set forth in Art. 2390 of the Italian Civil Code. Inherent and consequent resolutions.

For more information, please refer to the documentation available to the public on the company’s website www.rcsmediagroup.it (Corporate Governance section - Public Offers).

* * *

On August 3, RCS MediaGroup S.p.A. announced that the Company’s Board of Directors had accepted the

resignation, with immediate effect, of the Chairman Maurizio Costa, the Chief Executive Officer Laura Cioli and the Independent Director Gerardo Braggiotti. The Board consequently arranged replacement of the outgoing directors by co-opting Urbano Cairo, Stefania Petruccioli and Marco Pompignoli, appointing Urbano Cairo as Chairman and Chief Executive Officer and granting him operating powers for the ordinary administration of the Company. The Board also verified that Stefania Petruccioli meets the independence requirements envisaged in the Consolidated Finance Act and the Corporate Governance Code for listed companies, and appointed Dario Frigerio as Lead Independent Director. Lastly, further to the request from the shareholder Cairo Communication S.p.A. and considering the fact that, on that same date, resignations were also received from the directors Dario Frigerio, Mario Notari, Teresa Cremisi and Stefano Simontacchi effective from the date of the Shareholders’ Meeting called to appoint a new Board of Directors, it was decided to call a shareholders’ meeting for September 26, 2016 to appoint the new Board. Note that Gerardo Braggiotti held the office of Chairman of the Remuneration Committee and Maurizio Costa was Chairman of the Appointments Committee. At August 3, Laura Cioli and Maurizio Costa held 400,000 company shares each.

On August 3, RCS MediaGroup S.p.A. announced that, after having conducted the necessary checks and evaluations, the Board of Directors resolved that, as part of a general novation settlement which envisages the consensual termination of the employment contract of Mr. Cioli at August 3, 2016, and the immediate termination of the management relationship inseparably linked to the employment contract, Mr. Cioli would be paid the gross sum of €3,750,000.00. The above amount was paid at the time of signing the settlement agreement.

On September 26, at the ordinary Shareholders’ Meeting of RCS MediaGroup S.p.A. (the “Company”),

chaired by Urbano Cairo, shareholders adopted the following resolution, amongst others:

19

- 11-member Board of Directors appointed for the years 2016-2018: Urbano Cairo, Gaetano Miccichè, Marco Pompignoli, Stefano Simontacchi, Stefania Petruccioli, Maria Capparelli and Alessandra Dalmonte, (appointed from the majority list filed by Cairo Communication S.p.A., holder of a 59.69% interest in the ordinary share capital) and Diego Della Valle, Marco Tronchetti Provera, Carlo Cimbri and Veronica Gava, (appointed by the minority list filed by Diego Della Valle & C. S.r.l., on its own behalf and on behalf of the shareholders of DI.VI. Finanziaria di Diego Della Valle & C. S.r.l., Mediobanca Banca di Credito Finanziario S.p.A., UnipolSai Assicurazioni S.p.A., UnipolSai Finance S.p.A., Pirelli & C. S.p.A. and International Media Holding S.p.A., together holding 24.77% of the ordinary share capital);

- Urbano Cairo appointed as Chairman of the Board of Directors; - determination, in accordance with art. 2389, paragraph 1 of the Italian Civil Code, of €350,000 as the

total annual remuneration payable to the Board of Directors, without prejudice to any additional remuneration due to directors holding special offices to be established by the Board of Directors in accordance with Art. 2389, paragraph 3 of the Italian Civil Code;

All candidates except Urbano Cairo, Gaetano Miccichè, Marco Pompignoli and Stefano Simontacchi have declared that they meet the independence requirements envisaged in Art. 148, paragraph 3 of Italian Legislative Decree 58/1998 and in the Corporate Governance Code for listed companies issued by Borsa Italiana S.p.A. and adopted by the Company.

EVENTS AFTER THE REPORTING DATE

On October 3, the RCS MediaGroup S.p.A. Board of Directors, chaired by Urbano Cairo, appointed

Urbano Cairo as Chief Executive Officer. Based on declarations submitted by the interested parties and on information known to the Company, the Board confirmed that the independence requirements envisaged in Art. 148, paragraph 3 of Italian Legislative Decree 58/1998 and in the Corporate Governance Code for listed companies were met by the directors Maria Capparelli, Carlo Cimbri, Alessandra Dalmonte, Diego Della Valle, Veronica Gava, Stefania Petruccioli and Marco Tronchetti Provera. Director Maria Capparelli was appointed Lead Independent Director in accordance with the relevant provisions of the Corporate Governance Code. Lastly, the Board established the following Committees, appointing their members and respective chairmen: Control and Risk Committee: Stefania Petruccioli (Chairman), Alessandra Dalmonte, Veronica Gava. Remuneration and Appointments Committee: Maria Capparelli (Chairman), Diego Della Valle, Stefania Petruccioli.

20

2016 OUTLOOK

In a context still marked by difficulties and uncertainty, the Group performance in the first nine months of 2016 shows results better than expected. The increase in EBITDA before non-recurring expense and income in the first nine months (+€32.3 million compared to September 30, 2015) was greater than the improvement expected by the RCS Group for the whole of 2016, mainly due to the huge commitment to cutting costs (€51.7 million in efficiency improvements realised in the first 9 months compared to the previous year). Net financial debt stood at €382.9 million at September 30, 2016, an improvement over the forecast for the period. Note that, as a result of activities carried out in relation to the public offers launched on RCS MediaGroup S.p.A. shares and the costs incurred for renewal of the Board of Directors, unforeseeable non-recurring expense was recorded for a total of around €8.3 million. In view of the above and in the absence of other unforeseeable events, it is therefore considered that the RCS Group can confirm its 2016 objectives.

21

ADDITIONAL INFORMATION REQUIRED BY CONSOB PURSUANT TO ART. 114, PARAGRAPH 5 OF ITALIAN LEGISLATIVE DECREE NO. 58/1998 OF MAY 27, 2013

a) Net financial debt of the RCS Group and of its Parent showing short-term and medium/long-

term components separately

Change

Sep-30-2016 Dec-31-2015

Non-current financial assets recognised for derivatives - - -

TO TAL NO N-CURRENT FINANCIAL ASSETS - - -

Securities - - -

Financial receivables 0.9 3.6 (2.7)

Current financial assets recognised for derivatives - -

Receivables and current financial assets 0.9 3.6 (2.7)

Cash and cash equivalents 15.3 9.8 5.5

TO TAL CURRENT FINANCIAL ASSETS 16.2 13.4 2.8

Non-current financial liabilities (343.5) (15.6) (327.9)

Non-current financial liabilities recognised for derivatives (6.6) (11.0) 4.4

TO TAL NO N-CURRENT FINANCIAL LIABILITIES (350.1) (26.6) (323.5)

Current financial liabilities (49.0) (517.7) 468.7

Current financial liabilities recognised for derivatives - - -

TO TAL CURRENT FINANCIAL LIABILITIES (49.0) (517.7) 468.7

Net financial debt - continuing operations (382.9) (530.9) 148.0

Liquidity (Net financial debt) of assets held for sale - 44.2 (44.2)

Total net financial debt (1) (382.9) (486.7) 103.8

(€/millions) Carrying amount

(1) Indicator of financial structure, calculated as current and non-current loans and borrowings less cash and cash equivalents, current financial assets and non-current financial assets recognised for derivatives. Net financial debt as defined by CONSOB in its Communication DEM/6064293 dated July 28, 2006 excludes non-current financial assets. Non-current financial assets recognised for derivatives at September 30, 2016 and December 31, 2015 amounted to zero and therefore RCS’s financial ratio at September 30, 2016 and December 31, 2015 coincide with the net financial position as defined by the above-mentioned CONSOB Communication.

Net financial debt stood at €382.9 million at September 30, 2016, compared to a net financial debt of €486.7 million at December 31, 2015 (€530.9 million excluding assets held for sale). The €103.8 million decrease in net financial debt is, on the one hand, essentially due to the positive effects for €127.1 million from disposal of the Books segment on April 14 and, on the other, the negative effect of deconsolidation of the positive net financial position of the Books segment (€44.2 million at December 31, 2015), in addition to outlay relating to non-recurring expense and new investments, partly offset by the collection of dividends. The cash flow from ordinary operations was positive and improved compared to the same period last year and to December 31, 2015. This Interim Management Statement, as previously provided in the Half-year Report at June 30, 2016, shows the classification of short-term (€20 million) and long-term (€332 million) financing, given the conditions that determined the short-term classification of financing no longer applied, to take account of the provisions of IAS 1.74.

22

The net financial debt of RCS MediaGroup S.p.A. is shown below, with short-term and long-term components displayed separately.

(€/millions) Sep-30-2016 Dec-31-2015 ChangeCurrent financial assets

Cash and cash equivalents 1.6 2.3 (0.7)

Current financial assets 32.9 51.9 (19.0)

A) Total current financial assets 34.5 54.2 ( 19.7)

Current financial liabilities

Bank loans and overdrafts ( 10.9) ( 38.3) 27.4

Current financial liabilities ( 552.1) ( 997.9) 445.8

B) Total current financial liabilities ( 563.0) ( 1,036.2) 473.2

(A+B) Total current net financial debt ( 528.5) ( 982.0) 453.5

Non-current financial assets

Financial assets recognised for derivatives - - -

C) Total non-current financial assets - - -

Non-current financial liabilities

Non-current financial liabilities ( 336.8) ( 7.1) ( 329.7)

Non-current financial liabilities recognised for derivatives ( 6.6) ( 11.0) 4.4

D) Total non-current financial liabilities ( 343.4) ( 18.1) ( 325.3)

(C+D) Total non-current net financial debt ( 343.4) ( 18.1) ( 325.3)

TOTAL Net Financial Debt ( 871.9) ( 1,000.1) 128.2

Carrying amount

The net financial debt of RCS MediaGroup S.p.A. stood at €871.9 million at September 30, 2016, a decrease of €128.2 million. The effects of the disposal of the Books segment on April 14 for €127.1 million and proceeds from the collection of dividends contributed to the change. These effects were partly offset by outlay incurred for new investments and non-recurring expense. Also note the improved cash flow from ordinary operations.

23

b) Past due borrowing positions broken down by type (financial, trade, tax and social security) and any related action taken by Group creditors (reminders, injunctions, supply suspensions)

(€/millions)

Sep-30-2016 30 days31 - 90 days

91 - 180 days

181 - 360 days

> 360 daysTotal past

dueFalling due Total

Trade borrowing positions 16.1 18.2 12.5 4.7 20.9 72.4 225.5 297.9

Financial borrowing positions 49.0 49.0

Tax borrowing positions 8.3 8.3

Social security borrowing positions 9.3 9.3

Other borrowing positions 0.1 0.1 0.4 0.6 82.8 83.4

Total borrowing positions 16.1 18.3 12.6 4.7 21.3 73.0 374.9 447.9

Analysis of past due borrowing positions

The total of borrowing positions excludes items with no contractual expiry such as short-term portions of provisions for risks and charges and payables arising from recognition of equity-accounted group investees. Borrowing positions amounted to €447.9 million at September 30, down from the €33 million at June 30, 2016, deriving from lower loans and borrowings for €33.5 million and from lower tax, social security and other liabilities totalling €10.3 million. The decrease is partly offset by higher trade payables for €10.8 million. Positions which are not past due, of €374.9 million, represent roughly 83.7% of the total (at June 30, 2016 they amounted to €437.6 million and accounted for 91% of the total). At September 30, 2016, there were no past due amounts for loans and borrowings or for tax and social security liabilities. Past due borrowing positions, mainly trade-related, amounted to a total of €73 million (€43.3 million at June 30, 2016), marking an increase of €29.7 million across all due-date ranges. In particular, the comparison with June 30, 2016 showed an increase of €12.8 million for the range 31-90 days, €9.2 million for 91-180 days, €6 million for less than 30 days, €1.2 million for over 360 days and, lastly, €0.5 million for 181-360 days. Past due borrowing positions include €16.1 million in amounts past due by less than 30 days (€10.1 million at June 30, 2016), basically associated with business operations. In addition, positions due on September 30, 2016 amounting to roughly €16.5 million, have been conventionally classified as payables falling due. The remaining past due amounts of €56.9 million include a total of €17.8 million in past due amounts owed to agents (24.4% of the total past due). On the basis of sector practice, a monthly advance is paid to agents for their respective activities and is recognised in the financial statements as a trade receivable. Agent advances associated with past due payables amount to around €17.9 million, almost equivalent to specific past due amounts. Amounts owed to agents past due by over 360 days represent approximately 79% of that past due range. Past due trade positions totalling €72.4 million (€42.9 million at June 30, 2016) relate mainly to RCS MediaGroup S.p.A. for €51.1 million. There have been no legal actions for the recovery of significant sums allegedly due on the basis of trading relationships. As part of the current stage of the analysis for possible redefinition of trading relationships, the Company has received a number of trade-related reminders and/or warnings from suppliers to comply.

24

c) Related party transactions of the RCS Group and its Parent As required by CONSOB Communication pursuant to Article 114, paragraph 5 of Italian Legislative Decree 58/98, protocol number 13046378 of May 27, 2013, transactions with the related parties of the RCS Group are reported below. Firstly, note that with effect from July 2016 the ultimate parent company of the Group is U.T. Communications S.p.A., the parent of Cairo Communication S.p.A., which became the direct controlling entity of RCS MediaGroup S.p.A. as a result of the public offer to purchase or exchange. At September 30, 2016, the interest in RCS MediaGroup S.p.A. share capital held by Cairo Communication S.p.A. was 59.693% (59.831% if the percentage held by its parent U.T. Communication S.p.A. at September 30, 2016 is also included). Prior to the public offer, U.T. Communication S.p.A. had already been identified as a related party as it held 4.616%. This being said, the following were identified as related parties.

the direct and indirect controlling entities of RCS MediaGroup S.p.A., their subsidiaries, joint ventures and associates;

jointly controlled companies and associates of RCS MediaGroup S.p.A.; in addition, based on the Related Party Procedure adopted by the RCS Group, as better described

below, qualifying as related parties are all shareholders (and related corporate groups comprising controlling and controlled entities (direct and indirect), and jointly controlled companies (direct and indirect) holding an interest in RCS with voting rights of more than 3%, excluding intermediaries responsible for asset management activities, where the independence requirements of the Issuer Regulation are met;

key management personnel and their close family members.

As regards the Regulations approved by Consob with resolution no. 17221 of March 12, 2010 and subsequent amendments, on November 10, 2010 RCS MediaGroup S.p.A. adopted a related party transaction procedure covering authorisations and communication with the market and Consob. This Procedure was subject to certain revisions effective from January 1, 2014 and further revisions later became effective from October 1, 2015. A copy of this new edition of the Procedure is published in the “Governance” section of the company’s website. This procedure, as the previous provisions, has also been described in the Report on Corporate Governance and Ownership Structure. In this regard, in consideration of the provisions of said Procedure, in addition to the more significant transactions indicated above, several less significant transactions were subject to the prior opinion of the Related Party Transactions Committee provided for therein. Pursuant to this Procedure, shareholders and the associated corporate groups (legal entities in the form of parents, subsidiaries or jointly controlled companies) described in point 3 of the above list, were also identified as related parties, in addition to the parties pursuant to annex 1 of the aforementioned CONSOB resolution 17221/2010, on a voluntary basis. The following table shows the amount and proportion of related party transactions and balances included in each relevant financial statement caption. Intragroup transactions eliminated on consolidation are excluded.

(€/millions)

Trade receivables

O ther receivables and current assets

Current loan assets and

financial assets

Parent companies 0.1 - -

Jointly controlled companies 23.3 - -

Associates 0.5 - 0.2

Supplementary pension fund for executives - 0.1 -

Other group companies (1) 1.1 - -

Other related parties (2) - - -

Total 24.9 0.1 0.2

Total RCS Group 234.1 42.8 0.9

Related party % of the RCS Group total 10.6% 0.2% 22.2%

25

(€/mill ions)

Non-current

loans and borrowings

and financial liabilities

Non-current

financial l iabilities

recognised for

derivatives

Current loans and

borrowings and financial

liabilities

Trade payables

O ther current

l iabilities Commitments

Parent companies - - - - -

Jointly controlled companies - - 6.7 2.8 -

Associates - - 1.8 18.4 - 3.3

Supplementary pension fund for executives - - - - -

Other group companies (1) 13.8 1.5 0.8 0.4 - -

Other related parties (2) - - - - 0.3 2.7

Total 13.8 1.5 9.3 21.6 0.3 6.0

Total RCS Group 343.5 6.6 49.0 297.9 99.6 76.9

Related party % of the RCS Group total 4.0% 22.7% 19.0% 7.3% 0.3% 7.8%

(€/millions)

Revenue Raw materials

and services Personnel

expense

O ther operating

expense and income

Financial income and

expense

Parent companies 0.1 - - - -

Jointly controlled companies 174.6 (11.4) - 0.8 -

Associates 1.6 (28.9) - 0.1 -

Supplementary pension fund for executives - - (0.3) - -

Other group companies (1) 4.5 (5.3) - (0.1) (8.4)

Other related parties (2) - (0.7) (7.0) - -

Total 180.7 (46.3) (7.3) 0.8 (8.4)

Total RCS Group 709.4 (454.1) (205.9) (3.7) (23.7)

Related party % of the RCS Group total 25.5% 10.2% 3.5% -21.6% 35.4%

(1) Includes shareholders and the associated corporate groups (legal entities in the form of parents, subsidiaries or jointly controlled companies) that have an interest of more than 3% in RCS MediaGroup S.p.A. with voting rights, as well as the subsidiaries, associates and jointly controlled companies of Cairo Communication S.p.A. and U.T. Communication S.p.A. (2) Refers mainly to transactions with key management personnel and their close family members

Transactions with parents, associates and jointly controlled companies mostly refer to the exchange of goods, the provision of services, the provision and use of funds, as well as tax-related transactions. All such transactions are conducted on an arm's length basis, according to the quality of the goods and services provided. The transactions with parents include revenue of €0.1 million and trade receivables for €0.1 million. These mainly refer to the purchase of advertising space by Cairo Communication S.p.A. Transactions with jointly controlled companies mostly refer to m-dis Distribuzione Media S.p.A., in respect of which group companies have earned €174.6 million in revenue, incurred €11.4 million in costs, earned €0.8 million in operating income and reported €23.2 million in trade receivables, €6.7 million in current loans and borrowings and €2.8 million in trade payables. The most significant trade transactions between associates concerned the companies in the Bermont Group: €18.4 million in trade receivables, €0.5 million in trade payables, €1.5 million in revenue and €28.2 million in costs. The financial transactions with “other group companies” relate primarily to loan transactions and leases with companies in the Mediobanca Group. The trade transactions with “other group companies” mainly involve revenue of €4.5 million, costs of €5.3 million, as well as net financial expense of €8.4 million. Revenue was generated mainly with FCA (Fiat Chrysler Automobiles) group companies, Della Valle group companies and Intesa Sanpaolo group companies, while the costs incurred pertain mainly to the group companies of FCA (Fiat Chrysler Automobiles). Revenue refers mostly to the sale of advertising space and the provision of various services, including printing services. The costs incurred mainly concern the purchase of advertising space further to the contract entered into with the publisher La Stampa S.p.A. for national advertising sales. The above values also include transactions with other Cairo group companies, particularly revenue of €0.3 million, costs of €0.4 million and trade receivables of €0.4 million from the purchase and sale of advertising space.

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Financial expense refers to Intesa Sanpaolo group companies and Mediobanca – Banca di Credito Finanziario S.p.A. group companies. The transactions with companies in the Intesa Sanpaolo group and the Mediobanca – Banca di Credito Finanziario S.p.A. group relate to financial relationships involving mostly loans and leases. Note that following the change in ownership structure of RCS MediaGroup S.p.A. this year, both the FCA (Fiat Chrysler Automobiles) Group and the Intesa Sanpaolo Group are no longer considered related parties at September 30, 2016. The values shown in the above table include the trade transactions with these groups, recorded up to the change in RCS ownership.

*** With regard to financial transactions, and also insofar as they are the “most significant” transactions in accordance with the Related Party Procedure adopted by the Company pursuant to CONSOB Regulation no. 17221/2010, the first half of 2016 saw completion of the restructuring of the loan agreement (the “Restructuring Agreement”) originally signed by the Company on June 14, 2013 and subsequently amended on August 11, 2014, with Intesa Sanpaolo S.p.A., BNP Paribas (Italian branch), Banca Popolare Commercio e Industria S.p.A., Banca Popolare di Bergamo S.p.A., UniCredit S.p.A., Banca Popolare di Milano S.c. a r.l. and Mediobanca – Banca di Credito Finanziario S.p.A. (jointly the “Financing Banks”) for an initial amount of €600 million (the “Original Loan Agreement”). Among the Financing Banks, on June 16, 2016 (the closing date for the Restructuring Agreement) both Intesa Sanpaolo S.p.A. (no longer a related party from July, on finalisation of the new ownership structure of RCS MediaGroup S.p.A., having already fully adopted the public exchange offer of Cairo Communication) and Mediobanca - Banca di Credito Finanziario S.p.A. (“Mediobanca”), based on their respective interests in the Company’s share capital, were related parties of RCS pursuant to the Related Party Procedure. In addition, Intesa Sanpaolo S.p.A., a financing bank through its subsidiary Banca IMI S.p.A., also acted as agent bank and, together with Mediobanca (with Banca Popolare Commercio e Industria S.p.A., Banca Popolare di Bergamo S.p.A., Banca Popolare di Milano S.c.a.r.l., BNP Paribas S.A. - Italian Branch and UniCredit S.p.A.), as “Organising Banks”. Furthermore, the residual equity investment of (i) Intesa Sanpaolo S.p.A. amounted to €134.9 million, equivalent to 38.3% of the total amount of debt relating to the Loan (as defined hereunder) and (ii) of Mediobanca amounted to €14.7 million, equivalent to 4.2% of the total amount of debt relating to the Loan. Therefore, Intesa Sanpaolo S.p.A.’s stake, on an individual basis, and that of Mediobanca, together with Intesa Sanpaolo S.p.A.’s share, exceed the thresholds for transactions of greater significance pursuant to the Related Party Procedure. On June 13, 2016, the Transaction was approved by RCS’s Board of Directors, based on the prior favourable opinion of the Company’s Related Party Committee (the “Committee”) on the existence of the Company’s interest in completing the transaction and the cost-effectiveness and substantive fairness of the associated terms. On June 16, 2016, as communicated to the market, RCS and the Financing Banks signed the “Restructuring Agreement” for the loan referred to in the Original Loan Agreement (the latter, as amended pursuant to the Restructuring Agreement, the “Loan Agreement”), in accordance with the terms and conditions of the Term Sheet disclosed to the market on May 18, 2016. The Disclosure Document on said transaction was made available to the public at RSC’s registered office (Milan, via Angelo Rizzoli no. 8), on RCS’s website (www.rcsmediagroup.it) and on the authorised storage mechanism SDIR & STORAGE (www.emarketstorage.com) and must be considered included herein by reference. The favourable opinion on the Company’s interest in completing the transaction and the cost-effectiveness and substantive fairness of the associated terms issued by the Committee and the opinion issued by the independent expert Stefano Caselli, in support of the Committee and certifying the fairness of the cost conditions of the transaction, were attached to the Disclosure Document and made available to the public on the Company’s website, pursuant to Art. 5, paragraph 5, of the Related Party Regulation.

*** There are arm’s length derivative contracts with a total nominal amount of around €42.4 million subscribed for ordinary operating requirements with the Mediobanca – Banca di Credito Finanziario S.p.A. Group. Group tax consolidation for IRES purposes. During 2016, RCS MediaGroup S.p.A. continued to file for tax on a group basis, as permitted by Italian Legislative Decree no. 344 dated December 12, 2003 in order to

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achieve tax savings by calculating tax on a single tax base, with a consequent immediate offset of tax assets and tax liabilities for the period. Intragroup transactions deriving from the group tax consolidation are based on the objectives of fairness and neutrality. Group tax consolidation for VAT purposes. In the first nine months of 2016, RCS MediaGroup S.p.A. continued to make use of the rules allowing the RCS Group filing of VAT returns with a tax asset balance of €2.4 million. RCS MediaGroup S.p.A. transferred net tax liabilities totalling €5.6 million to the RCS Group VAT consolidation during the first nine months of 2016. The key management personnel were identified as the members of the Board of Directors and Board of Statutory Auditors and the Chief Executive Officer of RCS MediaGroup S.p.A. and its direct and indirect parent companies. These are currently augmented, for RCS MediaGroup S.p.A. and in accordance with the Board of Directors’ resolution of February 22, 2016, by: the Company’s Group Chief Financial Officer, the Company’s Group HR and Organisation Director, the Heads of the Company’s operating departments carrying out activities in the publishing of newspapers and magazines and in advertising sales, respectively (News Italy Director and Advertising and Communication Solutions Italy Director), the Group Procurement & Operations Director and the Strategy Development & Transformation Director, as well as the Executive Chairman and Chief Executive Officer of Unidad Editorial S.A. In 2016, members of the Board of Directors, Board of Statutory Auditors of the subsidiary RCS Libri S.p.A. (until the date of its sale) were also considered key management personnel. The required information on their remuneration in the various forms paid is shown below. (€/millions)

Service costs Personnel

expense Other current

liabilities

Board of Directors - fees (0.5) - 0.1

Board of Statutory Auditors - fees (0.2) - 0.3

Chief Executive Officers and Chief Operating Officers - other remuneration - (5.8) -

Executives 0.0 (1.2) -

Total related parties (1) (0.7) (7.0) 0.3

Total RCS Group (454.1) (205.9) 99.6

Related party % of the RCS Group total 0.2% 3.4% 0.3%

(1) This table does not include values relating to the remuneration (€0.1 million in the first quarter) paid to the Board of Directors and to key management personnel of the subsidiary RCS Libri S.p.A., which was sold in April this year. Personnel expense includes €7 million in remuneration paid to key management personnel, including the costs for changes in top management. Personnel expense referring to related parties accounted for 3.4% of total personnel expense. There are also commitments to key management personnel amounting to €2.7 million and to other related parties amounting to €3.3 million. Related parties of RCS MediaGroup S.p.A. The following table shows the amount and proportion of related party transactions and balances included in each relevant heading of the statement of financial position and income statement.

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Statement of financial position - assets

Equity investments

at cost

Trade receivables

Other receivables and current

assets

Current tax assets

Current loan assets

Parent companies - 0.1 - - - Subsidiaries 1,127.9 10.2 0.7 5.8 32.7 Associates 8.1 23.3 - - 0.2 Sub-holdings and their parents - 0.9 - - - Total related parties 1,136.0 34.5 0.7 5.8 32.9 Total RCS MediaGroup S.p.A. 1,136.0 145.0 36.0 12.4 33.0

Related party % of the RCS MediaGroup S.p.A. total 100.00% 23.79% 1.94% 46.77% 99.70% Statement of financial position – liabilities

Non-current

loans and borrowings

Financial liabilities

recognised for derivatives

Other non-current

liabilities

Current loans and borrowings

Current tax liabilities

Trade payables

Other current

liabilitiesCommitments

Parent companies - - - - - - - - Subsidiaries - - 0.9 522.4 4.7 13.5 0.3 1.1 Associates - - - 8.5 - 2.8 - - Sub-holdings and their parents 13.8 1.5 - 0.8 - 0.4 - - Other related parties (1) - - - - - - 0.3 - Total related parties 13.8 1.5 0.9 531.7 4.7 16.7 0.6 1.1 Total RCS MediaGroup S.p.A. 336.8 6.6 3.7 552.1 4.7 179.7 56.8 66.0

Related party % of the RCS MediaGroup S.p.A. total 4.10% 22.73% 24.32% 96.31% 100.00% 9.29% 1.06% 1.67% (1) Refers mainly to transactions with key management personnel and their close family members, as specified below.

Income statement

Revenue Raw materials

and servicesPersonnel

expense

Other operating income

Other operating expenses

Financial income

Financial expense

Other gains (losses) on financial

assets/liabilitiesParent companies 0.1 - - - - - - - Subsidiaries 9.2 ( 48.6) - 7.2 ( 0.1) 1.5 ( 9.0) 16.9 Associates 174.6 ( 11.5) - 0.8 - - - 1.5 Supplementary pension fund for executives - - ( 0.3) - - - - - Sub-holdings and their parents 3.7 ( 5.3) - 0.1 ( 0.2) 0.1 ( 8.2) - Other related parties (1) - ( 0.6) ( 6.3) - - - - - Total related parties 187.6 ( 66.0) ( 6.6) 8.1 ( 0.3) 1.6 ( 17.2) 18.4 Total RCS MediaGroup S.p.A. 407.9 ( 285.0) ( 119.2) 17.9 ( 10.4) 1.9 ( 28.7) 19.2

Related party % of the RCS MediaGroup S.p.A. total 45.99% 23.16% 5.54% 45.25% 2.88% 84.21% 59.93% 95.83% (1) Refers mainly to transactions with key management personnel and their close family members, as specified below.

Transactions between RCS MediaGroup S.p.A. and related parties primarily regard the provision of services, as already commented on in the note regarding the RCS Group, which should be referred to for a more detailed analysis. Added to these are transactions with subsidiaries (eliminated on consolidation), primarily regarding the exchange of goods (mostly the purchase of advertising), the provision of services (largely administrative, IT, financial, legal/corporate and tax, relating to the centralisation of these functions within Other Activities, as well as processing and printing services), the provision and use of funds, tax-related transactions as well as trade transactions relating to the lease of office space and operations areas. Key management personnel were identified (in accordance with IAS 24) as members of the Board of Directors, Board of Statutory Auditors and the Chief Executive Officer of Mediagroup S.p.A. and its direct and indirect parents. These are currently augmented by: the Company’s Group Chief Financial Officer (formerly Finance, Legal & Purchasing), the Company’s Group HR and Organisation Director (formerly Human Resources, Organisation & Operations), the Heads of the Company’s operating departments carrying out activities in the publishing of newspapers and magazines and in advertising sales, respectively (News & Verticals Italy Director and Advertising and Communication Solutions Italy Director), the Group Procurement & Operations Director and the Strategy Development & Transformation Director. The required information on their remuneration in the various forms paid is shown below.

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Service costs Personnel

expense Other current

liabilities

Board of Directors - fees (0.5) 0.1Board of Statutory Auditors - fees (0.1) - 0.2

Chief Executive Officer, Chief Operating Officer, Key management personnel,Manager in charge of Financial Reporting - other remuneration - (6.3) -Total related parties (0.6) (6.3) 0.3

Total RCS MediaGroup S.p.A. (170.4) (119.2) 56.8

Related party % of the RCS MediaGroup S.p.A. total 0.35% 5.29% 0.53%

d) Failure to comply with covenants, negative pledges and any other group borrowing clause which limits the use of financial resources, including updated degree of compliance with such clauses

On June 14, 2013, RCS MediaGroup S.p.A. signed a Loan Agreement pursuant to which a syndicate of Financing Banks granted a loan to the Company for an original amount of €600 million, reduced to €423.6 million at March 31, 2016, by using gains from the sales of non-core assets. It should be remembered that, following the non-compliance at December 31, 2015 of certain covenants envisaged in the original Loan Agreement, after lengthy negotiations the Company and the Financing Banks signed the Agreement for Restructuring of the Original Loan Agreement on June 16, 2016. The Agreement for Restructuring of the Original Loan Agreement makes provision for repayment of one of the 3 Credit Lines originally making up the Loan (Line A) for the remaining €71.6 million, from part of the net gains from the sale of RCS Libri and the new structure of the Loan comprising 2 Credit Lines: - Credit Line A (amortising), a term line of €252 million, to be repaid by December 31, 2019, in accordance

with a repayment plan that does not envisage repayments in 2016 and - Revolving Credit Line, a revolving line of €100 million, to be repaid on December 31, 2019 and used in

full at September 30, 2016 The Restructuring Agreement also reviewed the method for defining the spreads on the 3-month Euribor rate used as benchmark for each of the two Credit Lines. The initial spreads are 422.5 bps on Line A and 397.5 bps on the Revolving Line. The spreads can diminish in the future on an annual basis as the NFP/EBITDA leverage ratio improves, in accordance with a table listing the improvements in decreasing order. Furthermore, the Agreement does not envisage any commitment and/or restriction regarding exercise of the powers assigned by the Shareholders’ Meeting of December 16, 2015 to the Company’s Board of Directors, granting the right to increase the share capital by up to a maximum €200 million by June 30, 2017. In addition, the Company is under no obligation to dispose of assets. The Loan Agreement establishes the right of lenders to request repayment of the credit lines disbursed should the applicable covenants (as described below) be breached, or when additional qualifying events occur such as, inter alia, failure to pay the amounts due under the Loan Agreement, cross default in relation to the Group’s financial debt or the initiation of enforcement procedures by creditors for amounts exceeding certain thresholds, the violation of obligations undertaken under the Loan Agreement, Change of Control or the occurrence of events that have a significant negative effect as defined therein. As regards the Change of Control which resulted directly from completion of the Public Purchase and Exchange Offer of Cairo Communication S.p.A. for all ordinary company shares, on July 26, 2016, all financing banks that signed the Loan Agreement of June 14, 2013 confirmed to said company that they had waived the application of the provisions of the Loan Agreement regarding exercise of the right to request early repayment of the debt in the event of change of control.

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In particular, for the year 2016 and subsequent years, the Restructured Loan Agreement envisages the following financial covenants for the Company: Reference Date Financial Covenants (at group consolidated financial statements level)

Dec-31-2016 (i) Net Financial Debt < equal to €430 million; or €410 million in the case of the sale of VEO Television S.A.

(ii) Net Financial Debt/EBITDA ratio (Leverage Ratio), lower than 4.40x, (iii) Minimum Equity of €95.2 million

Dec-31-2017 Dec-31-2018

(i) Net Financial Debt < equal to €385 million; (ii) Net Financial Debt/EBITDA ratio (Leverage Ratio), lower than 3.45x, (iii) Minimum Equity of €95.2 million (i) Net Financial Debt < equal to €315 million; (ii) Net Financial Debt/EBITDA ratio (Leverage Ratio), lower than 2.30x, (iii) Minimum Equity of €95.2 million

The net financial debt referred to in previous points is increased by headroom of €25 million at every half-year reporting date immediately after.

e) Business plan implementation status, including any variations between actual and forecast data

For the notes on the Group performance in the first nine months of 2016, compared with the forecasts for the first year of the 2016-2018 Business Plan, reference should be made to the paragraph “2016 Outlook” (page 20 of this interim management statement). With regard to the prospects for future years, the change in the Group’s ownership structure and the recent appointment of a new Board of Directors will require a review of and/or preparation of a new business plan in the next few months. Milan, November 9, 2016 On behalf of the Board of Directors:

Chairman and Chief Executive Officer

Urbano Cairo

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STATEMENT PURSUANT TO ARTICLE 154 BIS, PARAGRAPH 2 OF THE CONSOLIDATED FINANCE ACT

The undersigned, Riccardo Taranto, Manager in charge of Financial Reporting for RCS MediaGroup S.p.A.,

STATES

in compliance with the requirements of art. 154-bis paragraph 2 of Legislative Decree no. 58 dated February 24, 1998, that the financial information contained in this Interim Management Statement at September 30, 2016 corresponds to the underlying documentary and accounting books and records.

Milan, November 9, 2016

Manager in charge of Financial Reporting Riccardo Taranto

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