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Vocento Social

Vocento increases market share, with adjusted EBITDA in 2011 at close to 2010 levels despite the cycle

  • Internet advertising outperforms the market and represents 13.5% of total revenues, 2.4 p.p. more than in 2010.
  • Continued efficiency costs leads to improved results in loss-making businesses.
  • Net result before minority interest, excluding La 10 and non-recurring items.
  • Financial position continues to differentiate from the sector, with net debt of 138.7 million euros.
  • The group has consolidated its leadership of the general press in print, with 4.2 million contacts, and online with 6.6 million users.

Madrid, 27 February 2012.- 2011 was another difficult year for the media sector, with a continued decline in advertising spend, which fell by 12.3% in the last quarter of the year. In these adverse conditions, Vocento focused on improving its revenues and the profitability of its businesses. The Group's clear commitment to the Internet is reflected in the fact that it contributed 13.5% of total advertising revenues, 2.4 p.p. more than in 2010.

Although advertising revenues were impacted by the cycle, thanks to the power and influence of its brands Vocento outperformed the market in all areas of the press and online, where its advertising revenues increased by 9.8%, faster than the market's growth of 7.7%.

Elsewhere, the Group demonstrated its ability to adapt its operations and adjust its cost structure to the current advertising environment. Efficiency measures led to a 6.3% decline in personnel expenses and 1.9% overall reduction in the Group's cost base.

As a result, EBITDA adjusted for non-recurring items and the operations of La 10, which were discontinued, remained at similar levels to those of 2010, at 53 million euros.

Over the course of the economic crisis from 2008-2011, although the advertising revenues of Vocento have declined by more than 180 million euros, EBITDA has increased by 11.5 million euros.

Net income in 2011 was -49.2 million euros. Adjusted for non-recurring items, this would be a positive result of 0.2 million euros.

The financial position of Vocento continues to differentiate it from the sector. It ended the year with net debt of 138.7 million euros including cash of 53.3 million euros. The Group also has credit lines available of 80 million euros, which enable it to face current conditions with a high level of financial solvency.

Results by business area

The leadership of Vocento in print media was reflected in the growth of traffic to its regional titles and ABC and the increase in advertising in the digital editions, which provided 11.3% (+1.7 p.p from 2010) of total advertising revenues.

ABC was the only national daily to increase market share in 2011 and it continued to improve its results, with average circulation of 221,353 copies and a better performance in advertising and kiosk sales than its competitors. In 2011, ABC improved its adjusted EBITDA by 7.2 million euros and was the best performing national daily at kiosks with a fall in sales of just 3.9% (compared to 5.3% for El Mundo and 14.6% for La Razón) and also in terms of advertising revenues, 2.5 points ahead of the market. Abc.es contributed 9.7% of advertising revenues.

ABC is a clear example of the group's focus on profitability and its commitment to enhancing editorial content, as shown by the launch of sections such as ABC Sport, ABC Leisure, and Style on Saturdays.

In the regional press area, the newspapers of Vocento maintained their undisputed leadership in 2011 with market share of 25.5% (well ahead of the next regional press group on 15.2%). Despite the fall in advertising, the regional newspapers continued to enjoy the highest margins in the sector with an average EBITDA margin of 15.1%.

Vocento maintained its leadership in supplements and magazines, which obtained an adjusted EBITDA of 7.1 million euros and an adjusted EBITDA margin of 14.7%.

In response to difficult market conditions, Qué! continued to implement cost controls and focused on the most attractive markets for advertising revenues, Madrid and Barcelona. In the year, it was able to cut its losses by 0.6 million euros.

In the audiovisual area, revenues were 123.2 million euros, 9.2% higher than in the previous year because of the increased level of activity on DTT (+20.6%) following the launch of new channels at the end of 2010.

Vocento has reached an agreement with Viacom International Media Networks to launch a new free-to-air fiction channel which will start broadcasting in the second quarter of 2012. With this new channel, NET TV is completing a DTT strategy that is based on providing high quality content for differentiated niche audiences, in partnership with world leaders in entertainment. This leads to a lower exposure to the economic cycle and to a possible far-reaching transformation of the TV sector, while also complying with the Group's overall profitability targets; excluding La 10, where operations were discontinued, adjusted EBITDA from DTT increased to 9.5 million euros.

October 2011 saw the launch of ABC Punto Radio, with the aim of reinforcing the ABC brand with a multi-channel strategy and increasing audience levels using a low cost structure. The radio business was supported by the improvement to coverage in 2011, with eight new licenses won in Andalusia, three in the Canary Islands and two in Cantabria.

On the Internet, Vocento holds the number seven position in the ranking of audiences, with nine million users. It is a leader in both the news category and in the overall rankings. Kiosko y Más, a new platform for premium, paid content which has over 178 publications, won the Ecomm Award for Editorial Innovation in the digital sector.

Internet was again the best performing business area. Advertising revenues increased by 9.8%, ahead of the 7.7% growth of the market.

The increase in advertising revenues and cost control measures led to an improvement in profitability. Adjusted EBITDA improved by 1.6 million euros to a positive level of 3.3 million euros. All Internet business areas improved and the digital editions reached breakeven. In particular, the online Classified advertising network of Vocento is unique in the sector, based on its national network of regional brands that are consumed locally, and its advertising revenues increased by 16.9% in 2011.

The loyalty of audiences to leading brands, the commercial appeal to advertisers, and the significant cost reductions that have been implemented combined with a financial position that differentiates it from the rest of the sector, all put VOCENTO in a privileged position for leading the media sector through today's challenges and into the future.