(…) Advertising has withered in the recession, causing Mediaset’s revenues to decline by 12% in the first quarter and its net profits by 50%.
The difficulties faced by Mondadori are complex and more intractable. The recession has led to reduced spending on books and magazines, and businesses have cut their advertising. It made a slender net profit of €97m on sales of €1.8 billion in 2008. At the end of April it decided that no dividend would be paid this year. Moreover, technological innovation is transforming the publishing industry at an accelerating pace. Last October Mondadori announced the sale of 80% of its printing arm and is looking to rationalise its business further.
The main businesses of Mediolanum, Fininvest’s third pillar–banking, mutual funds and life insurance–have also been weakened by the global crisis. Between the end of 2007 and the end of last year, assets under its management in Italy fell from €27.4 billion to €23.9 billion while new insurance business slipped from €3.4 billion to €2.7 billion. Abroad, the contraction was even more severe: assets under management in Spain and Germany dropped from €2.7 billion to €1.7 billion. At €131m, net profit was down 38% last year.