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Vocento Social

9M 2012 Results

Vocento reports EBITDA of 21.8 million euros and improves its net result before extraordinaries by 2.3 million euros

  • The group 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.
  • Results impacted by the closure of the print edition of Qué! (-19.1 million euros writedown of goodwill, with no impact on cash).
  • Significant improvement of +11.7 million euros in the EBITDA of loss-making businesses (ABC, DTT and ABC Punto Radio).
  • Internet advertising revenues now represent 16% of the total.
  • Continued efficiency in costs, which were reduced by 13.2%, compared with a 12.8% decline in revenues.
  • Vocento has a solid financial position that differentiates it from the sector.

Madrid, 15 November 2012.- Despite the difficult economic conditions, which are having a significant impact on the media sector, Vocento outperformed the market in the first nine months of 2012.

Vocento is looking to gear growth to new sources of revenues and is focusing on high quality, profitable circulation. Its sales strategy also differentiates it from the market and has enabled it to outperform in advertising. As a result, the advertising revenues of ABC (-19.2%), regional press (-17.2%) and radio (-10.1% excluding local radio) outperformed the press and radio markets, which contracted by -21% and -12.9% respectively, according to InfoAdex

In addition, Vocento is maintaining its objective of efficiency and discipline in costs, and costs declined by 13.2%, enabling the group to absorb almost all of the fall in revenues (-12..8%) and to improve profitability, in particular at ABC, Television and ABC Punto Radio.

Recurring EBITDA in the first nine months, excluding extraordinaries, was 21.8 million euros, only 0.9 million euros less than in the same period in 2011, despite a fall in revenues of 65.7 million euros. Over the course of the year, EBITDA has also followed an increasing trend from quarter to quarter.

Hence, in the third quarter of 2012, Vocento achieved positive EBITDA of 1.1 million euros (compared to -1.6 million euros in 3Q11), an absolute improvement of 2.7 million euros compared to the same period last year, despite the economic cycle.

The operating result and net result were above the comparable figures for the same period last year, excluding extraordinary items. The closure of the print edition of Qué! had an impact of 19.1 million euros due to the writedown of goodwill, but no impact on cash, and frees the group of comparable negative EBITDA of almost 2.2 million euros in the results for the first nine months.

Elsewhere, the sales strategy, based mainly on the Única 3.0 advertising rate, offers advertisers unique coverage by combining space in ABC with the regional press, and has led to advertising revenues outperforming the market, as well as enabling a 1.3% increase in the average advertising rate (compared to a decline of -16.6% at peers).

Initiatives that are underway to find new audiences and revenues include the Kiosko y Más platform for paid content, including audiovisual content, and Oferplan.com, which provides users of the digital editions of Vocento with discount offers.

Despite the current environment and the general conditions of the sector, Vocento's financial position continues to differentiate it from the sector. At the end of September 2012 net financial debt was 142.7 million euros, which includes 34.1 million euros of cash. Debt was affected by the reclassification of the payment derived from the agreement with minority shareholders of Las Provincias (12.5 million euros) as short term financial debt. Excluding this, net debt would be below the level of the end of 2011, despite the fall in advertising in the period (of 31.4 million euros). In addition, Vocento has available to it unused credit lines of about 65 million euros at the corporate level.

Results by business area Vocento continues to be the undisputed leader of general information in the print media area, with 2.8 million readers, according to the most recent EGM survey (excluding Qué).

This leadership is replicated on the Internet, with 11.5 million unique monthly users, according to ComScore in September 2012.

Vocento's titles outperformed in terms of circulation. The net margin on circulation sales of ABC and the regional newspapers improved by 6 million euros, reflecting the group's focus on high quality, profitable circulation, its reduction of block sales and collective subscriptions, and the significant cost cuts it has achieved as a result.

The advertising revenues of the area outperformed the market, with revenues at ABC declining 19.2% and at Regional Press by 17.2%, ahead of the market, which contracted by 21% according to InfoAdex.

ABC was the best performing national daily in terms of circulation at kiosks (-5.6%) compared to El Mundo (-7.9%); La Razón (-12.5%) and El País (-17.5%). It was also the fastest growing in terms of unique monthly users, according to ComScore (28.8%), and reported average monthly growth in subscriptions on Kiosco y Más of 16%.

A combined analysis of the ABC brand (print and digital editions and print plants) shows a significant improvement in comparable EBITDA of 1.8 million euros, to negative EBITDA of 3.3 million euros, despite a fall of 6.3 million euros in advertising revenues.

At Regional Press, the advertising performance of Vocento's titles outperformed their peers, maintaining market share of 25.4%, well ahead of the number two player on 15.1%. In terms of profitability, the business had an average comparable EBITDA margin of 12.8%.

The comparable EBITDA of the audiovisual area improved by 7.9 million euros, again reflecting the value creation at the Television business, which obtained positive comparable EBITDA of 5.5 million euros (compared to -3.3 million euros in 9M2011). A highlight was the positive performance of Paramount Channel, which has achieved an audience share of 1.2% in just a few months.

ABC Punto Radio also reported a positive performance, improving its comparable EBITDA by 1.4 million euros thanks to cost efficiency measures, which compensated for a decline in advertising revenues of 1.5 million euros.

Vocento consolidated its leadership in the Internet area, and is in the number seven position in the ComScore audience ranking, with 11.4 million users. .

Advertising revenues from Internet now represent 16% of the total, 2.3 p.p. more than in September 2011. In particular, revenues from Oferplan.com represent around 10% of the revenues of Digital Editions. In addition, Vocento is the only media group with a nationwide Classifieds network, and classified advertising increased by 6.9%, while the market contracted (-1.5%).