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Vocento obtains positive net income of 0.3 million euros in the first quarter of the year, with improving EBITDA in Print Media

  • Significant improvement in EBITDA and in profitability in Print Media and Internet
  • ABC, the only national daily to increase market share in circulation and advertising spend, with earnings improving
  • The revenue profile of the group is changing: Internet + Audiovisual now represent over 25.8% of the total revenues of Vocento
  • Maintenance of a solid financial position faced with the uncertainty of the cycle, clearly differentiating Vocento from the competition


Madrid, 13 May 2011.- Vocento reported net income of 0.3 million euros in the first quarter of the year, compared to a negative result of -5.2 million euros in the same period in the previous year. The brand-based strategy of the group has enabled it to consolidate its leadership of the press market, with more than 4.5 million readers, according to EGM, to increase the market share of ABC, and to progress in the positioning of Internet and Audiovisual.

In the first three months of the year, revenues were 174 million euros, only 0.9% below the level of the same period in 2010. Advertising spend in the first quarter of 2011 declined by 3.4% due to the unfavourable macroeconomic conditions, but it should be noted that the print media area has outperformed the market, with a decline of -5.6% compared to the -10.2% contraction of the press market, according to InfoAdex. In addition, Internet advertising revenues are continuing to grow, increasing by 10.4% in the quarter.

The adjusted EBITDA of the quarter was 8.1 million euros, compared with 9.6 million euros in the same quarter of 2010, with the comparison affected by the investments made in 2011 to create value in TDT business and by the impact of seasonality in the Content area, when compared to the same period in 2010.

And thanks to the capacity of Vocento to absorb the decline in revenues, as a result of the operational gearing that has been established at the Company, there has been a significant improvement in the adjusted EBITDA of the Print Media area (+2.8 million euros) and in the Internet area, which reached break even with an EBITDA margin of 3%.

The group's strategy of leading brands, focused on the creation of multichannel content, has attracted new audiences and advertisers, and has strengthened the position of Vocento in Internet and Audiovisual, which now represent 25.8% of the revenues of the Group.

The net result of the quarter was 0.3 million euros, compared to the negative result of 5.2 million euros in the first quarter of 2010.

The improvement of the net financial position should also be mentioned, with net debt of 99.5 million euros, 21,1 million euros less than at the end of 2010, clearly differentiating the Group from the competition.

Results by business area

In Print Media, Vocento consolidated its leadership of the press, with 4.5 million readers, according to the latest EGM survey. In a context of general declines in circulation, ABC won market share from its immediate competitors, with circulation down only 4.1%, compared to 11.8% for El Mundo and 16.9% for La Razón. The Vocento newspaper is continuing to close the gap with El Mundo: in March the gap fell to less than 14,000 copies. In addition, on Sundays, ABC is the only national daily to attract new readers, winning 250 thousand readers since 2007, while El Mundo has lost more than 290,000 readers in the same period.

The advertising revenues of the print media of Vocento have generally outperformed the market. Compared to the 10.2% decline of the market, ABC reported only a 2.5% drop, the regional press reported a fall of 8.4%, while Supplements and Magazines (XL Semanal, Mujer Hoy, Hoy Corazón, Pantalla Semanal and Inversión & Finanzas) maintained the level of advertising revenues, and Qué! reported an increase of 1.2%.

The EBITDA of the area, when adjusted for the investment made in restructuring, was 9.8 million euros, 39.3% more than in the first quarter of the previous year, implying an improvement in profitability of 2.7 percentage points, despite the fall in advertising spend. This improvement in profitability was achieved at both Regional Press and ABC, where EBITDA improved by more than 2.9 million euros.

In the Audiovisual area, revenues increased by 12.2% to 31.2 million euros, due to the increased revenues from DTT following the launch of La 10 and MTV, with revenues up by more than 48%.
In radio, despite the difficult competitive environment, Punto Radio consolidated its audience above 500,000 listeners (Mondays to Fridays), according to the latest EGM survey of April 2011.

The adjusted EBITDA of the area was -0.3 million euros, due to the investment made in DTT, following the launch of "La 10" at the end of 2010, and to seasonality in Content, which impacted the comparison for the first quarter by 3.0 million euros. This was a result of delays in the schedules of the production companies and the impact of film distribution windows.

Internet again reported positive results which demonstrate the future potential of this business area. Advertising revenues increased by 10.4%, with Internet now representing 12.5% of the total advertising revenues of the Group. The combined brand strategy is reflected again in this quarter in the advertising revenues of ABC.es with an increased of 23% vs. 18.5% according to InfoAdex.

The growth in advertising spend and the control of costs enabled an improvement in adjusted EBITDA, reaching a positive level of 0.4 million euros.

Vocento

Vocento is a leading multimedia company in Spain, thanks to the strength of its brands, which have a significant presence in all areas of information and entertainment, including the press, supplements, magazines, television, radio, audiovisual production, movie distribution, and the Internet. The strength of Vocento's nationwide, regional and local brands, and its permanent commitment to innovation, enable the company to extend its reach beyond its competitors, covering over 32.8 million people, according to the EGM.
More information at www.vocento.com.

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