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Vocento Social

Vocento records EBITDA of 18.3 million euros in the first nine months of 2013, 2% more than in the same period in 2012

  • All business areas (Print Media, Audiovisual, Internet and Other Businesses) recorded positive EBITDA, in line with the strategic plan
  • There was a slowdown in the decline in advertising for the third consecutive quarter, and Vocento outperformed the sector in press and Internet advertising
  • Internet advertising and e-commerce revenues provided 22.5% of total advertising revenues, 5.5 p.p. more than in 9M12
  • The net consolidated result improved by 42.8%, from -26.8 million euros to -15.3 million euros
  • The net financial position continues to differentiate Vocento from the sector, with 156.7 million euros of net financial debt and positive cash generation of 3.4 million euros

Madrid, 12 November 2013.-. In market conditions which remain challenging, in the first nine months of the year Vocento outperformed the rest of the advertising market, both at its regional titles (in their online and offline formats), which recorded a decline of 13.9%, and also at ABC, where advertising decreased by 4.5% compared to the 18% contraction of the market, according to i2p.

In this context, Operating Revenues fell by 15.9% to 386.1 million euros, adjusted for the closure of the print edition of Qué! in July 2012 and for the change of business model in Radio following the agreement with COPE, which has led to advertising revenues being replaced by other income. Another highlight is the increased contribution of Internet advertising revenues and e-commerce, which now contribute 22.5% of total advertising revenues (+5 p.p. from 9M12).

In the year to September, Vocento recorded EBITDA of 18.3 million euros, 2% more than in the same period last year, despite market conditions. In addition, there was an improvement over the course of the year in quarterly results, following the implementation of the Efficiency Plan in 1Q13. In the third quarter, comparable EBITDA improved by 1.8 million euros as a result of the execution of the strategic plan. Furthermore, all business areas are currently EBITDA positive.

The decline in advertising and Content revenues was offset by the improvement in the net margin on circulation sales, by savings in personnel expenses following the implementation of the Efficiency Plan, and by cuts to other variable expenses as a result of the decline in activity. Overall, comparable costs in the year to September fell by 14.2%, excluding the investment in restructuring.

The net financial result widened by -3.4 million euros. In 2012, this result included non-recurring financial income derived from the renegotiation of the put option on Las Provincias. Despite the operating losses, the regularization of the negative tax bases of previous years and other effects led to a tax expense of more than one million euros. At the bottom line, Vocento reported a net result of -15.3 million euros, an improvement of 42.8% from the -26.8 million euros reported in the same period in 2012.

In terms of its financial position, Vocento continues to be in a situation that differentiates it from the rest of the media sector in Spain. Net financial debt was 156.7 million euros in September, including cash and cash equivalents of 29 million euros. It is important to note that in this period the company achieved positive cash generation of 3.4 million euros, excluding the investment in the Efficiency Plan of 17.2 million euros. Net financial debt excluding this investment would have fallen to 139.5 million euros from 142.9 million euros at the end of 2012. In addition, Vocento has unused credit lines available to it of around 35.6 million euros.

Results by business area
In Print Media, Vocento continues to be the clear leader of the general press, with market share of 25% (vs. 24.7% in 1H13). This market share would be 34%, including newspapers with whom Vocento has an advertising partnership under the única 3.0 agreement (La Voz de Galicia, Diario de Navarra, Heraldo de Aragón).

Operating Revenues in this business fell by 13.7% to 249.9 million euros, mainly as a result of the decrease in advertising revenues, the impact of lower ordinary circulation and the controlled and voluntary reduction of non-ordinary circulation to improve margins. EBITDA was 13.6 million euros, 600,000 euros less than in 9M12. The group was able to offset much of the fall in advertising (22.5 million euros in 9M13) with various cost savings measures included in the Efficiency Plan (comparable costs fell by 11.6%).

Regional Press maintained its profitability, with the EBITDA margin remaining flat compared to 3Q12. Another highlight was the improvement in the EBITDA margin at ABC, up 2.3 p.p. from 3Q12 despite the decline in the advertising market. In addition, over the course of the year there has been a clear improvement in comparable EBITDA on a quarterly basis, as a result of the Efficiency Plan, which was implemented in 1Q13 and began to deliver results in 2Q13.

Over the course of 2013, there has been a steady improvement in the performance of the ABC brand, which in 3Q13 reduced negative EBITDA by +0.8 million euros compared to the same period last year, despite the fall in the advertising market.

In Audiovisual, as a result of the fall in activity in the Content area and the strategic Radio agreement with COPE, Operating Revenues fell by 27% to 54.4 million euros. However, all businesses in the division achieved positive EBITDA in the third quarter of 2013, due among other factors to the positive impact of the Efficiency Plan from 2Q13.

DTT recorded a strong performance, improving revenues by 4% (to 37.2 million euros) and comparable EBITDA by 14.4% (0.8 million euros) to 6.3 million euros, with an improving performance quarter by quarter in the year. At Radio, Vocento's strategy of changing the business model (replacing advertising revenues with other income) led to positive EBITDA of 0.3 million euros in 3Q13.

At Internet, Vocento has more than 10.6 million unique monthly users according to data from ComScore, making it one of the top ten most visited groups. The company's strategy continues to be to develop new sources of digital revenues (based on e-commerce business models, such as Oferplan), to adapt its content to new platforms and to optimize its sales strategy.
Operating Revenues were 40.3 million euros, the same level as the previous year. Different parts of the business posted heterogeneous performances; revenues at the Digital Editions increased by +8.9% while the revenues of the Vertical Portals and Classifieds fell because of their higher exposure to the difficult macroeconomic and advertising conditions. Nevertheless, advertising revenues in this division, which fell by 2.2% to 22.2 million euros, outperformed the rest of the market, where revenues declined by -4.5%.

Comparable EBITDA increased by 0.7 million euros to 1.2 million euros, mainly thanks to the positive performance of the Digital Editions, where advertising revenues and revenues from new e-commerce businesses enabled positive EBITDA in the year to September. This improvement in operating earnings was recorded at Local Portals (where the EBITDA margin expanded by +4.8 p.p.) and at ABC.es (+16.1 p.p.).