Europe
Media
27 February 2009
media@db
Results season continues
Paul Reynolds
Research Analyst
(44) 20 754 76539
paul.reynolds1@db.com
Mark Braley, ACA
Research Analyst
(44) 20 754 59904
mark.braley@db.com
Patrick Kirby
Research Analyst
(44) 20 754 73560
patrick.kirby@db.com
Deutsche Bank AG/London
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may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision. Independent, third-party research (IR) on certain companies covered by DBSI's research
is available to customers of DBSI in the United States at no cost. Customers can access IR at
http://gm.db.com/IndependentResearch or by calling 1-877-208-6300. DISCLOSURES AND ANALYST CERTIFICATIONS ARE
LOCATED IN APPENDIX 1.
Periodical
Euro Media Sector Performance
27/2/09
M A M J J A S O N D J F
50
55
60
65
70
75
80
85
90
95
100
105
DJ STOXX 600 MEDIA E - PRICE INDEX
DJ STOXX 600 E - PRICE INDEX
Source: Thomson Datastream
Table of Contents
GfK Pg 04
Gruppo L'Espresso Pg 05
Independent News & Media Pg 09
Informa Plc Pg 14
ITV Plc Pg 23
Johnston Press Pg 28
Pearson Pg 29
ProSiebenSat.1 Media AG Pg 39
Telecinco Pg 44
Thomson-Reuters Plc Pg 45
Trinity Mirror Plc Pg 52
Vivendi SA Pg 59
Wolters Kluwer NV Pg 68
Global Markets Research Company
This is another heavy week for results, starting with Vivendi and Pearson on
Monday.
Vivendi (Buy): Delivery of 08 results and guidance should reassure
Vivendi is one of the few media companies that approach 2009 with any degree of
visibility. Cashflow is strong and post-results we expect the market to take
comfort from delivery against its 08 targets and guidance pointing to growth in
FY09. Vivendi, at 7.5x 09E PE, with a 7% yield, strong B/S and some visibility, is
the sort of name we believe investors should own, whilst confidence on cyclical
earnings remains extraordinarily low. With upside implied by our E25.5 TP, we
reiterate our Buy.
Pearson (Sell) - All about 2009 guidance…if we get any
PSON reports FY-08 on 2-March and has already indicated that results will be
strong. So the focus will be on guidance, if any, for the Education businesses in
2009. Revenue decline, our call since July 2008, is no longer "scare-mongering"
but now a consensus view. But we think that the market is still failing to recognise
the margin implications of revenue decline. Yes, cost savings will help, but
incremental margins in all publishing operations are very high. With our EPS still
15% sub 2010 consensus we retain a SELL.
ITV (Sell) – Results due March 4th, no Easter parade
FY08 results are likely to be gloomy. ITV1's Q1 advertising outlook (-17%) is even
tougher than the exit rate in Q408 (-12%) and we have lowered FY09 UK TV
adspend to -9% (from -7%) with ITV1 -12.2%. This means ITV could come close to
a covenant breach which would limit financial flexibility. We think there is a strong
chance the dividend is scrapped to conserve cash. Expect a new cost saving plan
but not enough to move the dial. We maintain our Sell.
Informa (Buy) - Protect equity holders - concentrate on debt
INF reports FY-08 on 4-March. We believe softer trading will leave a covenant
breach at Dec-09 as a real possibility and that management should address this
proactively, via a divi suspension and covenant reset. Our forecasts assume such
actions, and on this basis INF is, in our view, cheap at 6x 09E PE. Key, we believe,
is that these assets are good, if somewhat cyclical. We think the best interests of
equity holders, in the current environment, would be served by a focus on debt
reduction. On the expectation that management will indeed act, we retain a BUY.
WPP (Hold) - Results due March 6th: 2.8% organic revenue growth 2008E
We assume 2.8% organic revenue growth for FY 2008, -0.3% in Q4. We assume
operating margins are broadly maintained at 14.9% (vs 15% in 2007) despite the
initially dilutive impact of TNS. Valuation is undemanding on a long term view
(market rating - 8x 2009 P/E), but we believe macro headwinds and worsening
newsflow on advertising trends will constrain the shares in the near term. Hold.

Table of Contents
GfK ...................................................................................................... 4
2008 preliminary results: slightly below estimate.....................................................................4
Gruppo L'Espresso ............................................................................ 5
FY08 results comment: Upgrade to Hold..................................................................................5
Cutting our 2009-11 estimates..................................................................................................6
Independent News & Media............................................................. 9
FY-08 preview; target price cut .................................................................................................9
2008 preview ............................................................................................................................9
Estimates ...............................................................................................................................12
Informa PLC...................................................................................... 14
FY-08 preview .........................................................................................................................14
Investment thesis ...................................................................................................................14
The Balance Sheet ..................................................................................................................16
The trading story .....................................................................................................................18
Estimates ...............................................................................................................................19
ITV PLC ............................................................................................. 23
FY08 results preview...............................................................................................................23
Results preview ......................................................................................................................24
Johnston Press ................................................................................ 28
FY-08 preview .........................................................................................................................28
Pearson............................................................................................. 29
FY-08 preview .........................................................................................................................29
Summary................................................................................................................................30
Estimates ...............................................................................................................................34
ProSiebenSat.1 Media AG .............................................................. 39
FY08 preview: FY09E cut on Nordic & CEE FY08 Review.......................................................39
FY08E preview ........................................................................................................................40
Cutting forecasts on FTA International....................................................................................40
Telecinco .......................................................................................... 44
FY08 review ............................................................................................................................44
Thomson-Reuters Plc ...................................................................... 45
FY-08 results ...........................................................................................................................45
Where are we now?................................................................................................................46
Trinity Mirror Plc.............................................................................. 52
FY-08 results ...........................................................................................................................52
2008 results ............................................................................................................................53
Estimates ...............................................................................................................................57
Vivendi SA........................................................................................ 59
FY08 preview: Reiterate Buy...................................................................................................59
FY08E preview ........................................................................................................................60
Wolters Kluwer NV.......................................................................... 68
FY-08 results OK; 2009 outlook sparse ...................................................................................68