Rai Way approves results for the nine months 2022

Development activities and cost control drive growth despite strong pressure from electricity prices impacting mainly third quarter trends; increased visibility on 2022 targets with stronger expected EBITDA growth

• Key results for the half-year ended 30 September 2022 (vs. 30 September 2021)
  • Core revenues of € 184.4m (+7.4%);
  • EBITDA* 115.7m (+5.2%);
  • Operating profit (EBIT) of €79.8m (+8.9%) ;
  • Net income of € 56.3m (+6.6%);

• Capex of € 241.9m** (€ 55.5m at 30 September 2021)
• Net debt*** of € 122.2m (compared to € 87.9m at 31 December 2021)

The Board of Directors of Rai Way S.p.A. (Rai Way), met today under the chairmanship of Maurizio Rastrello, examined and unanimously approved the Company’s Interim Financial Report for the nine months ended 30 September 2022.

Aldo Mancino, CEO of Rai Way stated: “The nine-month results confirm the validity of our approach and the company's ability to cope with external factors, such as the current energy price dynamics. Although the full benefit will be visible in 2023 thanks to the indexation to inflation, our confidence in ensuring EBITDA growth also in 2022 increases. Business model and strategy remain viable even under rapidly changing economic scenarios, and we work for a successful implementation of our Industrial Plan ”

Key Results at for the nine months 2022

As of 30 September 2022, Company’s core revenues amount to € 184.4 million, an increase of 7.4% over € 171.8 million for the nine months 2021 also due to indexation to inflation. Revenues from RAI, equal to € 158.8 million, also reflect the increase driven by refarming activities (effective from the second half of 2021), as well as a one-off benefit of € 2.0 million. Revenues from third-party customers stood at € 25.6 million, with a significant increase (+17.0% in the third quarter compared to the same period last year) driven by contribution of the new regional networks developed in the context of refarming.

EBITDA amounts to € 115.7 million, an increase of 5.2% over € 110.0 million in the nine months 2021. This growth is the result of higher revenues and a focus on costs, which, even including certain non-recurring benefits, offset the headwinds of more than € 7 million from the sharp increase in electricity prices. The margin on revenues reached 62.7% (64.0% in the nine months 2021). No non-recurring expenses were recorded during the nine months (absent in the same period of 2021 as well).

Operating profit (EBIT) amounts to € 79.8 million, rising 8.9% over € 73.3 million of the nine months 2021, and benefits also from the completed depreciation of DVB-T transmission equipment.

Net income amounts to € 56.3 million, up compared to the nine months 2021 figure, when - including a one-off tax relief of € 1.0 million - it stood at € 52.8 million.

Capex**** amount to € 41.9 million at 30 September 2022, of which € 35.0 million relate to development and M&A activities (€ 55.5 million in the nine months 2021, of which € 46.6 million of development activities). The level of development investments reflects mainly the gradual finalization of activities related to the refarming process for RAI as well as the implementation of the new regional TV networks and the new assets design activities.
Net invested capital***** amounts to € 280.6 million, with net debt of € 122.2 million (including the impact from the application of the IFRS-16 accounting standard for € 36.7 million) compared to € 87.9 million at 31 December 2021, confirming - net of development investments and dividend payments - the solid recurring cash generation.

Outlook

Considering the results of thenine months, the Company expects for 2022FY:

• mid-single-digit revenues growth driven by investments in refarming, both for RAI and third-party customers, and indexation to inflation;
• Adjusted EBITDA growth higher compared to the outlook communicated last July also due, in the final part of the year, to lower electricity prices, benefits from government measures and ongoing cost control actions;
• maintenance investments in line with the level provided in the 2020-23 Industrial Plan; development investments in line with 2021 driven by progress of refarming activities and deployment of new services;

Rai Way announces that today, Thursday 10 November 2022 at 5:30pm CET, the results of the nine months 2022 will be presented to the financial community via conference call.
The presentation supporting the conference call will be made available in advance on the Company’s website www.raiway.it, in the Investor Relations section.

To take part in the conference call:
Italy: +39 02 8020911 - UK: +44 1 212818004 - USA: +1 718 7058796
Alternatively, please register
here to receive the weblink to the event directly in your inbox and Outlook Calendar.
The replay of the conference call will be available after the end of the event in the Investor Relations - Events kit section of the website www.raiway.it.

The manager in charge of preparing the corporate accounting documents, Adalberto Pellegrino, declares, pursuant to article 154-bis of the Consolidated Finance Law (TUF), that the accounting information in this release corresponds to the underlying accounting documents, books and entries.

Disclaimer
This release contains forward-looking statements on the future events and results of Rai Way that are based on current expectations, estimates and forecasts about the sector in which Rai Way operates and on management’s current opinions. By their nature these items contain an element of risk and uncertainty as they depend on the occurrence of future events. The actual results could differ, even materially, from those stated for a variety of reasons such as: global economic conditions, the effect of competition and political, economic and regulatory developments in Italy.

* The Company assesses performance also on the basis of certain measures not considered by IFRS. Set out below is a description of the components of the indicators that are important for the Company:

• EBITDA (earnings before interest, taxes, depreciation and amortization): this is calculated as profit before income taxes, depreciation, amortization, write-downs and financial income and expenses.
• Adjusted EBITDA: this is calculated as profit before income taxes, depreciation, amortization, write-downs, financial income and expenses and non-recurring expenses/income.
• Operating profit or EBIT (earnings before interest and taxes): this is calculated as profit before income taxes and before financial income and expenses.
• Net Debt: the format for the calculation of Net Debt is the one provided in paragraph 127 of CESR Recommendation 05-054b, which implements Regulation (EC) no. 809/2004.

** Excluding investments related to the application of new IFRS 16 Accounting Standard, equal to € 6.4m
*** Net Debt including the effect of the application of the IFRS-16 accounting standard
**** Excluding component related to IFRS-16 Leasing
***** Net invested capital is calculated as the sum of fixed capital, working capital and non-current financial assets .

For table see attachment