Cost reduction
Gruppo Editoriale L'Espresso S.p.A. approved the plans of intervention aimed at cost reduction.
The expected overall savings are equal to €140 million approximately, that is 17% of the costs recorded in 2008; this amount encompasses the measures started in 2008, as well as the new initiatives formulated in 2009 and finalised in 2010.
The effects of the plan will reach an almost steady state by 2011.
The 2010 decline in costs is in line with the objectives of the restructuring plan implemented; this result was achieved without reducing the scope of operations and the range of products offered by the Group, and without compromising their quality.
In order to recover efficiency, the plan entailed structural and permanent interventions addressed to all Group's areas and functions:
- Industrial costs were supposed to decrease by 22% with respect to 2008 thanks to the suppression of the circulation initiatives that proved to be uneconomic, to the interventions made on the number of pages and formats of the Group's titles and to an overall reorganization aimed at rationalizing the existing printing capacity and fully exploiting the industrial synergies between local dailies and la Repubblica.
- The other costs as a whole (editorial, commercial, distribution, management and administration costs) were supposed to generate savings equal to about 15%.
| (€mn) | 2008 | 2009 | 2010 | D% 10 vs 09 | D% 09 vs 08 | STEADY STATE | STEADY vs 08 | D% 10 vs STEADY | |
|---|---|---|---|---|---|---|---|---|---|
| Industrial costs | 222,1 | 191,4 | 166,6 | (13,0%) | (13,8%) | 173,5 | (21,9%) | 4,1% | |
| % on total costs | 27% | 26% | 24% | 25% | |||||
| Editorial costs | 223,2 | 203,4 | 204,4 | 0,5% | (8,9%) | 188,6 | (15,5%) | (7,7%) | |
| % on total costs | 27% | 28% | 30% | 28% | |||||
| Commercial costs | 120,6 | 110,9 | 111,0 | 0,1% | (8,0%) | 107,5 | (12,3%) | (3,1%) | |
| % on total costs | 15% | 15% | 16% | 16% | |||||
| Management & Administration costs | 254,7 | 217,2 | 206,5 | (4,9%) | (14,7%) | 213,0 | (16,4%) | 3,1% | |
| % on total costs | 31% | 30% | 30% | 31% | |||||
| TOTAL GROUP'S COSTS (1) | 820,6 | 722,9 | 688,5 | (4,7%) | (11,9%) | 682,6 | (16,8%) | (0,9%) |
(1) Net of optional product's cost of goods sold and new advertising concessions for third parties media