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Vocento Social

Results for the first half of 2012

Vocento reports EBITDA of 20.8 million euros and a net result close to levels of 1H11

  • The group has outperformed the market thanks to its efforts to improve the quality and profitability of circulation, its sales strategy and its search for new sources of revenues
  • EBIT and Net Result maintained at levels similar to 1H11.
  • Results impacted by the closure of the print edition of Qué! (-19.1 million euros in goodwill, with no impact on cash).
  • Significant improvement in EBITDA of loss-making businesses: ABC +28.2%, DTT +245.2% and ABC Punto Radio +22.3%.
  • Internet advertising revenues now represent 15.2% of the total.
  • Continued reduction of costs, which decreased by 12.4%.
  • Vocento maintains a sound financial position.

Madrid, 27 July 2012.- Despite the difficult economic conditions, which are having a major impact on the media sector, in the first half of 2012 Vocento outperformed the market.

Vocento is looking for new growth levers and revenue sources and is focused on profitable, high quality circulation. In addition, it is implementing a sales strategy that differentiates it and has enabled the group to outperform the advertising market.

Vocento is also committed to efficiency and cost controls, with costs falling by 12.4% and absorbing nearly all of the fall in advertising, enabling an improvement in profitability in particular at ABC, Television and ABC Punto Radio.

EBITDA in the first half of the year, excluding compensation payments, fell by 3.6 million euros to 20.8 million euros, despite a fall in revenues of more than 45 million euros.

The operating result and the net result were maintained at levels close to those of the first half of 2011, excluding the impact of extraordinary items. In particular, the closure of the print edition of Qué! had an impact of 19.1 million euros because of a write down to goodwill, with no effect on cash, and released the company of 2.1 million euros of negative comparable EBITDA from January to June 2012.

Elsewhere, the new sales strategy and the launch of the Única 3.0 advertising rate, which provides advertisers with a coverage that differentiates the group, enabled advertising revenues to outperform the market and led to an increase in the average national price of advertising rate of 4.2%.

In addition, the group continued to invest in initiatives to attract new audiences and revenues, including the Kiosko y Más pay-platform, which includes audiovisual content, and Oferplan.com, a service that enables advertisers to offer discounts to readers of Vocento's digital editions.

Despite the current conditions and the overall situation of the sector, Vocento continues to enjoy a financial position that differentiates it from the sector. At the end of the first half of 2012, its net debt was lower than at the end of 2011, with net debt of 144.6 million euros and cash of 42.3 million euros, with a non-recurring impact of 13.6 million euros from the agreement with minority shareholders of Las Provincias.

Results by business area

In print media the group remains the undisputed leader of the general press, with 2.8 million readers according to the latest EGM survey. This leadership is reinforced on the Internet, where according to Nielsen NetView it had 7 million unique monthly users in June 2012.

Vocento's newspapers outperformed the circulation market. The net margin on sales of ABC and regional newspapers improved by 4.4 million euros, reflecting the group's focus on high quality, profitable circulation, which resulted in reduced block sales and collective subscriptions and a proportionate decrease in costs.

Advertising revenues in this area outperformed the market, falling 18.4% at ABC and 17.1% at Regional Press, compared to the market decline of 20.5% according to InfoAdex.

ABC was the best performing national newspaper in terms of kiosk sales (-2.5%), compared with El Mundo (-3.5%), La Razón (-12.2%) and El País (-18.8%). It was also the fastest growing online newspaper in terms of unique monthly users (12.5%), while average monthly subscription growth on Kiosco y Más was 15%.

A combined analysis of the ABC Brand (print, digital and printing plants) shows a significant improvement in comparable EBITDA, with positive EBITDA of 0.3 million euros in the first half despite a 4.6 million euros drop in advertising revenues.

At Regional Press both the advertising performance and circulation of the Vocento newspapers outperformed their competitors, and the business ended the first half of the year with a comparable EBITDA margin of 14.6%.

Vocento has also made the decision to convert Qué! into an exclusively digital newspaper. In recent years, the company has focused on optimising the business via various measures (reducing costs, eliminating editions, focusing on more profitable markets, a new editorial focus) but the difficult competitive environment did not enable profitability to be achieved. The closure of the print edition led to a goodwill write down of 19.1 million euros, with no impact on cash, and has released the company of comparable negative EBITDA of 2.1 million euros from January to June 2012

Comparable EBITDA in the audiovisual area improved by 5.4 million euros, with the Television business increasingly profitable with comparable EBITDA up 6 million euros. In the first half of the year, the audience for the Net TV multiplex increased to a share of 4.5%, with the Paramount Channel achieving an audience share of 1% since its launch in April.

ABC Punto Radio also reported a positive performance, with comparable EBITDA improving by 0.8 million euros thanks to cost efficiency measures and the benefits of the new combined brand strategy with ABC in print, radio and Internet, which resulted in advertising outperforming the market.

In its Internet business, Vocento consolidated its leadership in the news category, maintaining the number nine position in the total audience ranking with about 8 million users, leading the media sector.

Internet advertising revenues represented 15.2% of the total, two percentage points more than in the first half of 2011. Revenues from Oferplan.com represented 7.9% of the total for the Digital Editions. Vocento is also the only group with a nationwide network of Classifieds, and these posted a 9% rise in advertising, ahead of the 5% growth of the market. Classified advertising revenues now represent 33.9% of total Internet advertising revenues.