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Edited Transcript of MS.MI earnings conference call or presentation 14-May-19 4:00pm GMT

Q1 2019 Mediaset SpA Earnings Call

Milan May 23, 2019 (Thomson StreetEvents) -- Edited Transcript of Mediaset SpA earnings conference call or presentation Tuesday, May 14, 2019 at 4:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Marco Giordani

Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director

* Matteo Cardani

* Simone Sole

Mediaset S.p.A. - Head of Finance and M&A

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Conference Call Participants

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* Andrea Randone

Intermonte SIM S.p.A., Research Division - Research Analyst

* Christopher Johnen

HSBC, Research Division - Analyst

* Giasone Ulisse Salati

Macquarie Research - Senior Media Analyst

* Julien Roch

Barclays Bank PLC, Research Division - MD & European Media Analyst

* Sophie Perrine Cecile Julienne

BofA Merrill Lynch, Research Division - Associate

* Stefano Gamberini

Equita SIM S.p.A., Research Division - Analyst

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Presentation

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Operator [1]

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Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to Mediaset 2019 First Quarter Results Web and Telephone Conference Call.

(Operator Instructions)

I must advise you, this conference is being recorded today, 14th of May 2019. And now I would like to hand the conference over to your first speaker today, Simone Sole. Please go ahead.

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Simone Sole, Mediaset S.p.A. - Head of Finance and M&A [2]

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Hello. Good afternoon. Welcome to the 2019 first quarter result of Mediaset. I will immediately introduce the speakers today: Marco Giordani, CFO of Mediaset; and Matteo Cardani, Managing Director of Publitalia, as always. And for the sake of time, I will hand over immediately to Matteo, and we will follow up after for the Q&A session.

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Matteo Cardani, [3]

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Okay. Thank you, Simone. Good afternoon, everybody. I'll start with the quick look to macroeconomic scenario and its impact on advertising market.

But I'd like to focus on gross domestic product dynamics, combined with Confidence Index. The main factor we shared also during our last call is the continuous downward review of gross domestic product forecast for 2019. All forecasts are below 0.5, pointing to a narrow of 0 plus/minus 0.2%. And this expectations combined with the political situation during the election campaign period for the European Parliament create an environment of uncertainty and limited visibility that is affecting advertising dynamics.

Over the past 6 months, a flat forecast for gross domestic product has been amplified by declining business Confidence Index, turning out into a declining advertising trend year-on-year on a monthly basis.

In the next chart, we see how this controversial economic situation has affected the overall advertising market trend. The minus 0.1% year trend in 2018 was the outcome of a flat 9-month trend with the negative contribution of Q4 minus 0.7% and slowdown. This slight negative trend at the end of last year turns out into a minus 3.5% slow start trend in Q1.

Our addressable market segment, TV, radio and digital is better than the overall trend, but anyway negative. This dynamic is the combination of consensual stop in medium-term growth in radio, while digital keep on growing at a positive single digit. But most of all is the effect of a slow start of year 2019 with minus 2.7% in TV ad spend.

In the next chart, we'll take a look at our performance in terms of total advertising revenue. So compared to minus 3.5% market trend, one should try to put our advertising revenue trend in the right perspective. That means that discounting for football offer -- discontinuity, in order to highlight the underlying trend. So the interesting thing in the next chart is that if we take discontinuity in the football offer out of the basis, in the comparison, our trend in terms of, let's say, Mediaset the like-for-like trend is minus 0.6%. So the underlying trend is broadly spread year-on-year, showing a positive performance.

I say positive because I'm considering that minus 0.6% is only EUR 3 million below our Q1 historical basis. So just EUR 1 million per month. So particularly nothing. If we compare our dynamics with our main competitors, we are on the same track and even better. Yesterday, we had the official release of the news in a market downturn that if we compare free-to-air businesses, we are doing quite well compared to our -- that of competitors. And last but not the least, the third factor is that the Q1 impact on our market share is absolutely negligible because our share is stable. If we compare Q1 2019 with Q1 2018.

In the next chart, we comment VoD's performance and, of course, this read into market share performance and has been sustained by a solid position in the audience share with a clear leadership on the commercial target and the combined outcome of the leading position in core-making channel with a continued improvement in market position even on the multichannel side, notwithstanding the discontinuity in football pay-TV offering.

The overall situation I've been sharing is positive. We are fully aligned with our H1 editorial objectives of audience share for core channel. And then we have a continuous stream of original production throughout the world's screen time this summer. And we are consolidating the benefit of 2 additional thematic channels in our multichannel thematic portfolio.

Then, with last chart, a quick overview of 2019 early indicators for different advertising sectors. Here you see we highlighted Mediaset relative performance versus total advertising market. So in the green box, you see our differential performance compared to the other major market trend for each sector. So generally speaking, we keep our leading position across all sector, both in terms of share and relative performance versus each sector trend, with the only exception of automotive where, of course, we have discontinuity in football offer, particularly relevant for main target. In all key sectors, we are significantly performing better than market, improving our relative performance in all key sectors, notwithstanding the fact that 3 key sectors like fast-moving consumer goods, telco and automotive, the dynamics of the market in the initial quarter is definitely not particularly brilliant.

So as a provisional conclusion, in the last chart for Q1, we could say that our Q1 performance, excluding football offer discontinuities, is totally in line with the market will be flat year-on-your and most of all with our expectation. The cross-media strategy, enabling stable advertising market share in Q1. We confirm our leading TV audience share on commercial target, and therefore, our strategy is delivering results in line with our 2019 plan. So I hand over to Marco, and thank you for the attention.

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [4]

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Good evening to everybody also on my side, and thank you for joining the call today. And I would take you through the main financial highlights of the quarter.

The quarter has been really, really good, honestly even better than our expectation. We ended the quarter with an EBIT of almost EUR 80 million, 3x better than the last year, almost 3x better than last year. And with a net profit that is almost EUR 40 million, 10x better than last year.

Even more remarkable is the performance of the group financial position that ended a little bit less than EUR 800 million net compared to almost EUR 1.4 billion last year. Clearly, as you know and as we said in the full '18 accounts call, we are clearly changing the accounting following the IFRS 16. This is clearly weighting on the net financial position at the quarter end for EUR 137 million. And if we exclude that accounting changes, we can compare it with the 2 group financial position, the '19 and the '18 one, and you can appreciate a strong improvement in the cash condition that moved down from almost EUR 1.4 billion to EUR 700 million -- to EUR 650 million (sic) [EUR 654 million] with an improvement of EUR 700 million in the 12 months.

Stepping down in the Italian business, Matteo has just took you through the advertising performance. As we said already and following the pay-TV restructuring plan starting from June '18 -- in '19, we are expecting to maintain only nonlinear offer in pay-TV in our perimeter. For that reason, as we said that, clearly, we are not going to have anymore -- the pay-TV line, clearly, we're not going to do this anymore, and everything will be accounted in the other revenue line. And clearly, we are improving our performance on the other revenue lines considering the discontinuity of not having a new premium in our, let's say, perimeter. We are confirming our guidance for the other revenue lines in the EUR 330 million -- EUR 350 million for the full year.

And moving down to cost. We had a very impressive reduction in costs, EUR 164 million reduction, almost 25% lower than last year. We are confirming the guidance for '19 on the reduction of EUR 450 million lower cost base, ending the year with EUR 1.871 billion -- EUR 1.880 billion total costs for the full year. Clearly, it's the first year without discontinuity and that will be the first year in which you can appreciate the total, let's say, work and total projects we have carried out to reduce the cost base.

Below the EBIT line, we confirm the guidance of net financial charges for the full year of EUR 10 million. As far as the tax rate '19, we are expecting to be at traditional level of 34%.

Moving to investment. Clearly, the quarter can be also, let's say, affected by savings issue, but we are confirming the EUR 420 million target for the full year

And then moving to cash. As we said, we had a great performance in the quarter. Cash flow from core activity moved from a cash absorption of EUR 60 million to a cash generation of EUR 60 million, so with an improvement of EUR 120 million. As you can see, the level of the net financial position of the quarter end was EUR 850 million debt, excluding the impact of the new IFRS 16.

And clearly, trying to set is also the guidance for the full year. We are going to have, for the group level, the buyback of Telecinco revenue is closing. And the dividend already paid by Mediaset España. But excluding the IFRS 16 accounting changes, for EUR 140 million, we are expecting for the Italian net financial position at the end of '19 at a level below EUR 800 million, confirming a delever -- material deleverage in respect to the past years.

That's all for my part. And then we can open the Q&A session.

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Simone Sole, Mediaset S.p.A. - Head of Finance and M&A [5]

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Yes. Thank you, Marco. We've been very fast today, so more time for your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question comes from the line of Chris Johnen from HSBC.

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Christopher Johnen, HSBC, Research Division - Analyst [2]

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So first one on the, let's call it, sector consolidation. Is there any news, I mean obviously nothing specific, but in terms of the progress that you can share with us?

Second question on the guidance you've given for Q2 in terms of advertising. I understand you've given us similar or in-line guidance for Q2 incorporating both the football on the pay-TV and the FIFA World Cup on a reported basis. Does that imply something around minus 3 for Q2? Is that something you feel comfortable with?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [3]

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Yes. Let's start from the first question. I mean clearly, we have nothing to say officially. As we said several times, we are working on a business model. And we are also trying to see what can be, let's say, the effects on consolidation looking inside the group. So really looking at Mediaset Italia, Mediaset España. But as I said, no material thing to say. We still believe that there is room for that, but we are not getting a position to disclose anything on that. But as soon as we'll have anything to say, you will be the first to know.

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Christopher Johnen, HSBC, Research Division - Analyst [4]

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So timing-wise, end of June still looks reasonable Board meeting-wise?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [5]

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We said the 25th of July, the date in which we are going to approve the first half. It will be, for us, the last day.

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Simone Sole, Mediaset S.p.A. - Head of Finance and M&A [6]

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Okay. I'll address the second question with regard to advertising. So the interesting thing is that in Q1 this year, we are almost offsetting the discontinued effect on advertising in the first part of this year. And the outlook for Q2 is absolutely in line. I can anticipate to you that we closed April, of course, and the underlying trend of our business is absolutely in line with priority compared to last year taking out the discontinuity, and this is our outlook also for Q2. And so we are confident that in H1, we keep on offsetting the discontinuity effect on advertising, notwithstanding the adverse, let's say, market conditions.

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Christopher Johnen, HSBC, Research Division - Analyst [7]

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So can you remind us again about the World Cup impact that we should -- or that you are assuming in your figures for June?

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Simone Sole, Mediaset S.p.A. - Head of Finance and M&A [8]

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Commented probably I remember 1 or 2 or 3 calls ago and that Marco stated that our, let's say, cost, net cost basis was EUR 45 million and the revenue -- the incremental revenue was created a double-digit margin of total debt. So that's our, let's say, competitive reference for the impact of World Cup.

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Christopher Johnen, HSBC, Research Division - Analyst [9]

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Right. And last one, quick one probably on Vivendi, is there anything to be said on this?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [10]

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No. I mean, we have no news. We have no meetings. We have no contact. No, let's say, core event that has been passed through. So no news of it.

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Operator [11]

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The next question comes from the line of Sophie Julienne from Bank of America.

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Sophie Perrine Cecile Julienne, BofA Merrill Lynch, Research Division - Associate [12]

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A quick question, we've seen that Netflix is increasing its number of subscribers across Europe. They were multiplied by 2 in Spain, for instance, in 2018. And meanwhile, the number of viewers is declining. How do you see the future of TV in 2019? That's my first question.

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Matteo Cardani, [13]

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It is difficult to answer. So I don't know if I would be able to convince you. In any case, clearly it's something that is going to be, let's say, more and more material also in Italy, and I believe also in Spain. At least we don't have any official number for Italy. Clearly, they are growing. As far as we know, they are clearly taking share from pay-TV -- traditional pay-TV operator. Clearly, they will be the first impacted by the development of, let's say, the SVoD business model.

For the time being, they are not carrying advertising. So clearly, they are affecting the consumer EBIT before the viewer EBIT but not yet our revenue lines.

Infinity, that is our SVoD offer, is growing as well double-digit. Clearly, we are assuming that in terms of share, we are lower than that.

But in any case, they are also confirming the fact that they are looking for strong local content, so which clearly we are pretty, pretty dominant in terms of production. So that's, if you want to be also, an opportunity going forward. But I mean as far as the trend I believe that the general worldwide trends are the same also in Italy. Maybe speed is different, but trends are not very far from the rest of the world.

But to summarize, we don't think that our business will be impacted materially in the short run. Clearly, we have to react to offer a state-of-the-art, let's say, product to our customers. But as I said, I mean, they're not really collecting advertising and for the time being, we are, let's say, positioned on this market for our, let's say, business model.

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Sophie Perrine Cecile Julienne, BofA Merrill Lynch, Research Division - Associate [14]

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Okay. And the second question was a follow-up on the previous one around sector consolidation. In your answer, you only talked about combination of Mediaset and Mediaset España. Are you still thinking about the EUR 1 billion transformational M&A that you previously talked about at the beginning of this year, end of last year?

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Matteo Cardani, [15]

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To be clear, that was the answer to the question in terms of the size of the firepower we had. I mean that size -- I mean clearly, the performance in terms of cash flow generation is confirming that in terms of firepower, that's the size of firepower we have. And so clearly, we didn't say that we are going to use it, but I mean that's what we have. No, I mean the answer is pretty simple. If we are not convinced by a business model insight, so between us and Mediaset España, there is no sense to going further. So the first step of, let's say, our project will be to be convened in a different business model in an industrial project. And that clearly and the first step for that will be Spain if we are going to be convinced. So if we're not going to be convinced with Spain, there will be no way to -- so that's the way which we are trying to analyze the issue. If we don't find the business model that is convincing to us, there is no sense to consolidate the sector. That's where we stand. So with the EUR 1 billion, it's just a theoretical. It's a weapon. But we don't know if we are going to use it.

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Operator [16]

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Your next question is from the line of Julien Roch from Barclays.

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [17]

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My first question is coming back on what Matteo had said on the World Cup, EUR 45 million of costs, incremental revenue double-digit margin. Are we talking 10%, 20%, 30% margin?

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Matteo Cardani, [18]

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10%.

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [19]

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10%? Okay. My second question is what's the approximate split of the World Cup between Q2 and Q3? Was it 50-50? Or was there more in Q3 because of the amazing end of that wonderful World Cup?

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Simone Sole, Mediaset S.p.A. - Head of Finance and M&A [20]

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No, it's more in Q2 in terms of, let's say, quantitative distribution in the number of total matches. Following I remember, they were 48 in the Q2 and then 16 in the Q3.

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [21]

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And we should roughly use that split, so 40 divided by 56 for Q2, so about 70% of the revenue in Q2 and 30% in Q3?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [22]

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Sorry, could you repeat, please?

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [23]

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Should we use the split of matches for the revenue breakdown between the 2 quarters? So if you add 40 matches out of 60 -- out of 56, i.e., 70%, should we use 70% for Q2 for the World Cup?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [24]

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Approximately, you could use this split according to the number of total matches.

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [25]

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Okay. And then my other questions are on Mediaset España. I'm confused about what you're saying, Marco, sorry. So last call or the one before last, you say it makes no sense to buy the minority in Mediaset España. It's just a financial deal. We already control it. But today, you're seeing we're going to try to see what the impact of the consolidation inside the group is. We are to make a new business model work with Mediaset España. And if that works, then we'll try something with another broadcaster. What do you mean exactly? What are you intending to do with Mediaset España? And can you do it by the 25th of July because there's only 2 months left?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [26]

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Thank you for the question because you're right, I was probably not so clear. I believe that approaching the, say, the consolidation projects, I mean industrial, let's say, decision has to be different from financial and corporate one. We don't think that the possible consolidation is a financial project. Because as we said, we and other said several times that there are no cross-border synergies. So nothing has really changed in that respect. And this is the reason for which we are looking for a different industrial business model. In Spain, it's already part of the group, so we don't need to do anything with Spain in terms of financial/corporate action. What we have to decide is whether we have industrial business model that can work better in the present environment and can be a way to be more effective and efficient in the market -- in the media market that's honestly it's a little bit different already today and is going to be even more different in the future. So I'm repeating myself. The previous answer was referred to the industrial business model as far as the financial/corporate projects. Spain, it's already part of Mediaset. So we don't need to do anything on that from the corporate side.

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [27]

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Okay. So what you're going to do as a first step is see whether the business model can work better, be more effective, more efficient with Mediaset España. Can you give us a couple of concrete example of what you're trying to achieve? Is it like merging the streaming platform, so Infinity and whatever the Mediaset España platform is called, sorry I forgot, are using the same technologies? Same thing for targeted advertising? I mean can you give us some concrete example of what you're trying to achieve?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [28]

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Julien, too early, too early. Once that we will have finished, you will know. What we said is clearly -- I mean, we can read everything on that easily, but I mean I believe it's too early now, so I wouldn't comment. But I mean clearly, we are trying to be better placed, more efficient and to create value for our shareholders, that's it. So we have to find a way, if there is any. Otherwise, we're keeping going on any way we are. So that's -- but I mean, it's too early.

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [29]

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Okay. So the last one is -- so today, it's too early to comment on that, but by the 25th of July, you'll tell us?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [30]

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If there is a project because...

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Julien Roch, Barclays Bank PLC, Research Division - MD & European Media Analyst [31]

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If there is a project, we'll know by the 25th of July?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [32]

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Yes.

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Operator [33]

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Your next question is from Stefano Gamberini from Equita.

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Stefano Gamberini, Equita SIM S.p.A., Research Division - Analyst [34]

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I'm sorry to come back again on the consolidation sector. Just regarding this date of 25th of July, if you find us an agreement regarding, I don't know, a JV as asked by some other German players on some aspect, is this enough for you? And then we will you see what could be the project in the second step? Or as you said, a few months ago, you want an equity deal?

Second question, in this case, without an equity deal but just the first step of a project that could arrive later, are you still -- is still on the table of possible dividend, ordinary dividend in the second part of the year or not?

The third question regarding this Slide #14, I noticed that the working capital improved a lot during this quarter. Could you elaborate a little bit why there was this strong impact?

And still regarding the guidance on net debt below EUR 800 million at the year-end, is this clearly without any one-off dividend?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [35]

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Sorry, Stefano, but again on the possible consolidation, honestly, I wouldn't comment anything more. I mean, as I said, we are working. And there are many, many things to decide, to evaluate the studies. So honestly, I believe it's not really useful for anybody to talk about something that is possible, eventual and not sure. What we have stated and we are affirming that by the 25th of July, either we will have something to say to the market in terms of what we are going to do. Or clearly, if we don't have any projects, a decision on the distribution on dividend we've taken because it's that commitment we have undertaken with them, with the market and with the Board and with our shareholders. As far as the rest, as I said, as soon as we will have something to say, we would promptly tell it. So nothing on that.

On the working capital, yes, I mean, that's if you want something that is affected by 2 issues. The first one is the prequel business that probably was a little bit detailed in the previous year by pay-TV in the sense that clearly seasonality expecting this in the first quarter all the, let's say, the revenue accounted in the last quarter last year. And so that's clearly the effect that translated and cashing in credit -- and cashing in debtors in the first quarter. Clearly, last year, distribution was different because we were still paying football. And clearly, we are the opposite, let's say, effect. So the difference in the 2 -- and the comparison is again related to not having football anymore to pay. And sorry, the last question was I forgot. I forgot it, sorry.

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Stefano Gamberini, Equita SIM S.p.A., Research Division - Analyst [36]

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No, no, just -- it was a clarification regarding the guidance of net debt again that is clearly without any one-off dividends that you can distribute.

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [37]

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Yes, yes. Clearly, the one decided by Telecinco include -- by Mediaset España included, no decision on Mediaset [Italia]...

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Operator [38]

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Your next question from the line of Andrea Randone from Intermonte.

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Andrea Randone, Intermonte SIM S.p.A., Research Division - Research Analyst [39]

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Part of my questions have been already answered about the premium activity. You're now consolidating in the other revenue line. Here, tell me if I'm right. You are shutting down the previous Mediaset premium business and you are maintaining an OTT business. If this is correct, I wonder if you can provide us an indication of the overhead costs which were still in the Mediaset Premium apart from content costs in order to understand the savings. And what are the progress in your Mediaset Play, so the on-demand platform at the program?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [40]

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Yes. First of all, we are not shutting down Mediaset Premium in terms of brand and, let's say, B2C, let's call it in this way, activity. We are just transforming it. What we are closing is that traditional pay-TV operation made by card subscription, cash collection and all is related with the traditional pay-TV, let's say, operating activity. And we are adopting a more digital, let's say, if you want modern way of serving and, let's say, providing the service to our customer using an OTT activity. It means that actually we don't have any more cards. We don't have any more decoder. We don't have any more CRM with call center. We are using what Netflix "is using". So it's sort of prepaid monthly, let's say, payment using credit cards or PayPal and clearly cutting many of the costs that the traditional pay-TV activity was including. That more or less the result of not having football anymore because, clearly, having a lower number of customer, the DTT platform was too expensive to reach a decent margin. So that is what is going to happen from this 1st of June. So the Mediaset Premium service will be provided through a digital, let's say, offer. And as far as the cost, clearly, we're not having any more football. We have no more cost dedicated to that activity. And so when we announce I think, EUR 450 million cost reduction, this is all including because all the costs that now is used to serve the pay-TV and VoD activity are rising costs that are already present in the group, and they are not really allocated to or decided to a specific activity.

As far as Mediaset Play is concerned, we are clearly following a business model that all the forecasters are trying to add, let' say, deployed in the platform -- so a platform that is merely collecting advertising and is serving free -- let's say, free or advertising funded service with some pay services. And so there will be a mix composition of the activities made by advertising and the payment from the customer. All these payment will be accounted in the other revenue lines. So clearly, they are growing. It is low, but it's part of the development that is made -- trying to be state of the art and to serve to our user and modern offer and a modern experience.

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Operator [41]

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And the last question is from the line of Giasone Salati from Macquarie.

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Giasone Ulisse Salati, Macquarie Research - Senior Media Analyst [42]

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Apologies for the background noise in advance. Just 2 questions please. First on the sector -- advertising growth by sector. Can you give us a little bit more color on the auto sector? How do you see that performing now? And if you have any expectations in the future? And if there is any other notable sector to mention.

And secondly, on the Vivendi situation, it just occurs to me that now that Vivendi is officially not controlling Telecom Italia anymore, I wonder what happened to the freeze on Vivendi shares on the Mediaset, is that has been unleashed? Or is that still a subject to some limitation?

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Marco Giordani, Mediaset S.p.A. - CFO, GM of Administration, Finance, Control & Business Development & Executive Director [43]

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On Vivendi, I mean, is not a question of control? I mean the law in Italy is not really referring to a controlling stake. It's just the size, the quantitative size of the stake. And so as far as we know, they are still holding a little bit less than 25% of Telecom Italia. So in that level, they are in breach with the law. So as far as we know, they are in the same position they were 1 year ago. So controlling or noncontrolling is not relevant as far as the media or anything.

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Matteo Cardani, [44]

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With regard to the automotive sector, the automotive sector, as I said in expenditure, I just look over the past, let's say, 4 years. And we are almost aligned with the trend in the car sales, so reflecting the fact that the last year and before the start of this year, the market is not being so well in terms of car sales. They are reducing the overall spend more or less in the first 3 months. The automotive sector is minus 8%. So we are still higher-than-average share because in automotive sector, we have 4 points more than our average share in the market. Of course, we are, let's say, absorbing the fact that we don't have football anymore. So across all sectors it's, let's say, the less positive in our portfolio. While the interesting thing that in all other sectors like grocery, pharma, retail, finance and so now, we keep on growing our performance. Honestly, this sector that is, let's say, missing not for Mediaset, but for the whole market is telco. Telco is the missing contribution in Q1. They are double-digit down not for us but for the whole market. So this is the situation with regard to sector.

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Simone Sole, Mediaset S.p.A. - Head of Finance and M&A [45]

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Okay, Matteo. Thank you, Matteo, thank you, Marco, and thank you, everybody, for joining the first quarter call. And as always, the Investor Relations department is available for any questions you may have. Thank you very much, and good afternoon. Goodbye.

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Operator [46]

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And this does conclude your conference for today. Thank you very much for participating. You may now all disconnect.