EUR 407.14 For Business Accounts Only

MEDIASET - RATING REPORT

RATING RATIONALE

•  We affirm our BB+ corporate rating of Mediaset
•  Our rating is supported by i) Mediaset’s #1 position in terms of audience share in both Italy and Spain, (ii) good outlook in Spain where TV advertising expenses are expected to increase by a CAGR of c.4% over the 2017-2021 period, iii) our expectation of improving adj. EBITDA on the back of lower TV rights amorti-zation, iv) an adequate loan to value ratio of c.33% and a solid equity cushion, with Mediaset SPA’s stakes in EI Towers and Mediaset Espana worth c. €0.6bn and c. €1.7bn respectively, i.e. a total of c.€2.3bn vs. €1.1bn of debt at the holdco level.
• Our rating is nonetheless constrained by i) the group’s exposure to the highly cyclical advertising market, with c.70% of total revenues derived from advertising-related activities while the geographic diversification is relatively low as Mediaset operates only in Italy and Spain, ii) a high degree of mismatch between debt and adj. EBITDA.