Chrysler 2005 Annual Report Download - page 73

72 Reporton Operations Itedi
01 Report on Operations
Operating Performance
In 2005, average daily sales of newspapers in Italy were slightly
down (approximately -3%) from the previous year.
The Italian advertising market as a whole grew by 2.8% with
respect to 2004, making 2005 a year of consolidation after the
strong 7.4% gains achieved in 2004.
Editrice La Stampa S.p.A. reported an average daily circulation
of 312,000 copies in 2005, an 8% drop from the 339,000 copies
of 2004.This erosion was largely due to the fact that several joint
marketing arrangements with other papers were discontinued
during the year, as well as to lower newsstand sales.
Brand stretching initiatives designed to increase newsstand sales
of additional products leveraging the paper’s brand name continued
in 2005, following a new sales strategy aimed at giving preference
to profitability rather than volumes. Efforts to expand newspaper
readership also continued, most notably by distributing the paper
in schools. Revenues from the sale of newspapers and other
publishing products totalled 70 million euros in 2005, approximately
12% less than in 2004.This decrease was chieflydue to the
abovementioned lower revenues from brand stretching initiatives and
the drop off in sales volumes, which was also due to 6 strike days
more than in 2004. However, despite this unfavourable environment,
the newsstand channel began to showsigns of recoveryfrom
August. Advertising revenues amounted to 94 million euros,
substantially in line with the previous year.
Publikompass S.p.A. booked advertising billings of 328 million euros,
compared with 330 million euros in 2004: a slight (-0.6%) decrease
in revenues stemming from the termination on June 30, 2004 of an
advertising arrangement with SKY which the latter’sparent company
decided to manage independently.
On October 3, 2005, Editrice La Stampa S.p.A. signed a letter
of intent with M-dis S.p.A., one of Italy’s major distributors of
publishing products, for the disposal of the unit’s distribution
activities. Under this agreement,To-dis s.r.l. was set up, and from
2006, this companywill handle distribution of the products managed
by M-dis (the newspapers Corriere della Sera and La Gazzetta dello
Sport, and other publishing products) and Editrice La Stampa
(the dailyLa Stampa and other publishing products).
Publishing and Communications
Itedi
Highlights
(in millions of euros) 2005 2004
Net revenues 397 407
Trading profit 16 11
Operating result (*) 13 9
Investments in tangible and intangible assets 20 2
Employees at year-end (number) 846 849
(*) Including restructuring costs and unusual income (expenses).