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Vocento Social

Results for the first quarter of 2013

Vocento records revenues of 129.5 million euros and outperforms the advertising market

  • Increased share of the press and Internet advertising market for the regional brands and ABC, mitigating the impact of the economic conditions
  • ABC.es revenues +40.6% and unique monthly users +29.5%, according to ComScore
  • Internet and new digital businesses now provide 22.1% of advertising revenues
  • The Efficiency Plan was implemented in the first quarter (when costs were cut by 14.5%) and will deliver even greater cost cuts from the second quarter


Madrid, 9 May 2013.- In the midst of an economic recession that is having a major impact on the media sector, Vocento has again increased its share of the advertising market, has implemented an Efficiency Plan to reduce costs and has maintained a financial position that continues to differentiate it from its competitors.

Revenues in the first quarter of 2013 to 129.5 million euros, 16.9% less than in the same period in 2012. However, the advertising revenues of Vocento's brands outperformed the market in their offline formats (regional titles and ABC -20.2% vs. -22.9% for the market, according to i2p) and also in their online versions (Digital Editions +2% vs. -5.9% for the market, according to i2p). Vocento's advertising revenues fell by 19.9%, excluding Qué!, where the print edition was closed in July 2012, and also excluding radio following the agreement with COPE.

There has been an important shift in the profile of the advertising revenues towards the digital business. Advertising revenues from the Internet area represented 19.1% of Vocento's total advertising revenues, up 4.6 percentage points from 1Q12. Including revenues from new digital businesses based on e-commerce (such as Oferplan), Vocento's exposure to digital activity increased to 22.1%.

Vocento continues to target improving its operating efficiency and reducing its cost base at the bottom of the cycle. The Efficiency Plan, which was implemented in the first quarter, will be reflected in the company's results from the second quarter. Even before this effect, comparable costs in 1Q13 were cut by 14.5%. Much of the decline in revenues was absorbed by generalised cost controls and cuts across all areas.

Comparable EBITDA (excluding extraordinary items in 1Q13) was 2.1 million euros, compared to 7.0 million in 1Q12, which reflects the company's capacity to absorb much of the13.5 million euro fall in advertising with cost reductions.

The comparable operating result (EBIT) was -5.3 million euros, due to a decline in depreciation, which decreased by 1.3 million euros compared to 1Q12. The consolidated net result in the first quarter after taxes and minority interest was -7.7 million euros.

Vocento maintains a financial position that differentiates it from the rest of the media sector. Net debt was 148.8 million euros including cash and cash equivalents of 36.4 million euros. In comparable terms, excluding payments of 13.3 million euros associated with the Efficiency Plan, the net financial position would have decreased to 135.5 million euros from 142.9 million euros at the end of 2012. This reflects strict management of working capital and control over investments, which are mainly associated with the development of new sources of digital revenues. Vocento also has available unused credit lines of about 50 million euros.

Results by business areaIn print media the regional titles (according to the 1st EGM survey of 2013) increased their readership by 62,000, an increase of 2.9%. The readership of ABC fell by 6.2% in a context of generalised declines for the national press. The company has decided to focus on high quality and profitable circulation, which has led to reduced block sales and collective subscriptions (non-ordinary circulation) and to a disproportionate decrease in costs. The net margin on circulation sales of ABC and the regional newspapers improved by 0.9 million euros in 1Q13.

Operating Revenues fell by 15.3% to 84.0 million euros as a result of the controlled reduction of non- ordinary circulation, which also led to the improvement in the net margin on circulation sales. Advertising revenues fell by -20.2%, but Vocento continued to outperform the market, which according to i2p contracted by -22.9%.

The Print Media area ended the period with comparable EBITDA of 3.6 million euros, down 2.5 million euros from 1Q12. In a very difficult environment, the company has offset much of the fall in advertising (-9.6 million euros) with a range of savings measures that will be continued and complemented by the measures included in the Efficiency Plan. Comparable costs (ex-Qué!) fell by 10.6%.

In the audiovisual area, as a result of the strategic agreements achieved in the television and radio businesses, Vocento continues to have options for the future of the sector, as it has retained ownership of its radio and television licenses.

DTT obtained revenues of 12.4 million euros, up 8.5%, reflecting, among other factors, the agreement with Paramount Channel. The audience for the Net TV multiplex reached total share of 4.2%, according to data for March 2013.

The radio broadcasting agreement with COPE, announced at the end of 2012, initially had a negative impact on the Radio business in 1Q13 as the business was managed in the quarter without equivalent advertising revenues (which decreased by -73.6%). Broadcasting with COPE will enable positive EBITDA from 2Q13.

The comparable EBITDA of the Audiovisual area was affected by the lower level of activity at the production companies and by the reduction in cinema releases. Starting in 2Q13, the audiovisual business will benefit not only from the savings of the Efficiency Plan (including the broadcasting agreement with COPE) but also from the change of supplier for Regional DTT.

In its Internet business, Vocento is consolidating its leadership of the news category and is in the eighth position on the overall ranking of Internet audiences produced by ComScore, with more than 12.1 million unique users, reflecting its commitment to digital. Highlights include the strong performance of ABC.es, which improved its online market share with an increase of 29.2% in unique monthly users (well above the average +6.3% increase for the other national dailies), with 5.9 million users.

Internet operating revenues increased by 0.9%. Advertising revenues from the Digital Editions rose by +2.0% and there was an increased contribution from new digital businesses, whose revenues more than doubled. There was also a negative impact from the conditions of the economy and the advertising market, especially on vertical portals and classified advertising. ABC.es reported revenue growth of 40.6%.

As a result, the comparable EBITDA of the business area improved by almost 0.4 million euros. The digital editions improved their margins and reached breakeven (+0.6 million euros), as the revenue growth of the new digital initiatives has not led to additional cost structures, improving the profitability of the area.

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