PRISA AGM heralds new era for the Group

•        Shareholders ratify the operational separation of the Group into two divisions (Santillana and PRISA Media) and the appointment of their respective executive chairpersons – Manuel Mirat and Carlos Núñez  – as executive directors of PRISA.
•        Carmen Fernández de Alarcón has been appointed board director representing Vivendi.
•        Rosauro Varo, Javier Santiso and María José Marín Rey-Stolle are ratified as independent directors.
•        The number of board directors is increased from the current 12 to 14.
•        Modifications are approved to the remuneration policy, the company bylaws and the regulations of the Shareholders' Meeting to adapt these to new legal requirements.

PRISA’s Annual General Meeting of Shareholders, held online today, has approved all the resolutions proposed by the Board of Directors.

Shareholders endorsed a range of key items on the agenda, including a new organizational structure for the Group, which sees it split into education and media divisions (Santillana and PRISA Media), and the appointment as executive directors of PRISA of these division’s respective executive chairpersons, Manuel Mirat and Carlos Núñez.

The AGM also approved the appointment of Carmen Fernández de Alarcón to the Board, where she’ll be representing Vivendi, as well as the ratification of Rosauro Varo, Javier Santiso and María José Marín Rey-Stolle as independent directors. Following these appointments, the Board of Directors goes from 12 to 14 members.

Meanwhile, the shareholders approved modifications to the remuneration policy, the company bylaws and the regulations of the Shareholders' Meeting in order to adapt these to new legal requirementsspecifically with regard to holding shareholders' meetings in an exclusively virtual format.

Joseph Oughourlian: "Leading the transformation"

Addressing the meeting, PRISA chairperson Joseph Oughourlian stated that the Group is “going to transform the education and media sectors, not merely in Spain but across the Spanish-speaking world.”

For Oughourlian, “digitization does not implicitly entail cuts, on the contrary, it brings opportunities and we must now take advantage of these to boost the enormous potential that we have. We are going to look to the future and we are going to focus our efforts on investing and growing, although obviously without losing sight of costs… and, at all times, with our shareholders’ best interests at heart”.

PRISA’s chairperson explained that “as Chairperson and in light of current socioeconomic circumstances, I have decided to take a 50% pay cut. The remuneration of Board members has also been reduced. The time has come to share the hard work and to ensure that cuts do not always fall on the general workforce. Here, I would hasten to add that we are committed to launching an ambitious project for growth that prioritizes human capital and talent.”

Oughourlian, who took shareholders through the proposals brought before the AGM, outlined the factors playing in the Group’s favor. “We have undertaken changes to corporate governance,” he said. “For the first time in many years, a highly reputable industrial shareholder, with a great business vision, has entered the capital structure. There have been changes to the organizational structure, with the creation of two business units to maximize the value of our assets; and we have a new management team that is deeply transformative and innovative… independent and with a solid digital vision of business. A new management that reinforces the generational change and the new PRISA project.”

In addition, he highlighted the changes to the structure of the balance sheet, “with a refinancing deal that has allowed us to extend maturities and increase the company's liquidity.” But he warned that the “level of debt remains too high. One of my priorities, therefore, will be to reduce it as quickly as possible to manageable levels.”

The Group’s chairperson remembered all those affected by the COVID-19 crisis “in what was“an extremely complex year”and he thanked all the Group's professionals for their efforts, adding that he was hopeful about the situation thanks to the headway being made in the vaccination campaign and the consequent impact of this on the country's economy.

Finally, he expressed his gratitude for the support of all stakeholders –  “subscribers, listeners, teachers, families and students, with whom we share common interests and values”, and especially the shareholders “for whom we work every day”.

Oughourlian concluded: “2021 will mark a milestone in the life of this Group. I assure you that I will put all my determination and efforts into ensuring that, as we embark on this new era, we will prove capable of recovering the great successes, both social and financial, which have always been hallmarks of Grupo PRISA.

Manuel Mirat: “We have laid the foundations for the future”

Meanwhile, Manuel Mirat took stock of the last three years, during which he acted as CEO of the Group. “These past few years have been very eventful yet they have also been very rewarding because, thanks to everyone's efforts, we have set PRISA on a firmer footing and we have laid the foundations for a much brighter and more hopeful future,” he said.

Mirat paid tribute to the former Chairs who had placed their trust in him, Juan Luis Cebrián, Manuel Polanco, Javier Monzón and Joseph Oughourlian. “I'd like to express my gratitude to them and to the boards of directors that they have presided over these years for the trust they have always shown me.” He also spoke warmly of the “magnificent group of professionals who have accompanied me these years.”

Mirat then honored those affected by the pandemic before stressing the enormous commitment of the Group's workers.

He then reviewed the financial results of 2020, “the most turbulent year in our history”, but a year during which “PRISA's response has been exceptional”.

• The Group recorded a net profit of 90 million euros, compared to losses of 182 million registered the previous year.
• EBITDA, meanwhile, was down by 66% due chiefly to the Covid crisis. Specifically, the pandemic had a negative impact of 223 million in terms of revenues and of 153 in terms of EBITDA.
• In an effort to counter the adverse effects of the pandemic, the Group implemented a cost containment plan. By the end of the year, savings of 49 million were achieved, which clearly exceeded the 40 million originally envisaged in the initial contingency program.
• The company closed the year with a positive cash balance of 222 million euros, plus an additional 143 million in restricted cash.

Mirat was eager to stress the Group’s commitment to the transformation of the businesses. “PRISA's strategic roadmap”, he explained, “focused on subscription models in both Education, in Latin America, and Media, has yielded encouraging results over the past year.” As a consequence, he said, “digital revenues now account for 30% of the group total and continue to grow”.

Mirat went on to review the chief milestones from the past three years, during which he had acted as CEO of the Group:

• In three years, there had been two capital increases for an overall value of 763 million euros, which have strengthened the company's balance sheet.
• Two debt restructurings have been completed. The most recent was last year when the Group reached an agreement that involved extending debt maturity until March 2025. It allowed the amortization of 400 million of debt (slashing total net debt by more than 30%) and established a framework for the separation of the Education and Media businesses.
• The debt has been notably reduced from 1,422 million in December 2017 to 679 million in December 2020.
• Mirat explained that “Santillana has made it possible during these three years to restructure PRISA's balance sheet and lay the foundations for the future of the Group. Firstly, because we kept it within the perimeter of the company in 2017. Then, in April 2019, because we acquired 25% of the capital that we did not control at that point. And last year, because we sold the Spanish business to the Finnish group Sanoma for 465 million euros, which represented 9.6 times the EBITDA, considerably higher than the chief comparable transactions in the sector. The sale generated capital gains of 377 million euros and enabled the refinancing agreement signed last year, which gives the Group as a whole some breathing space to better face the future with confidence.”
• In 2020, Media Capital was sold to a group of Portuguese investors for a total of 47.3 million euros.
• In addition, throughout these years, “we have undertaken an extensive divestment plan in non-strategic assets, especially in Latin America.”
• The balance sheet has been cleaned up by more than 600 million euros.
• And in this period, cost reduction and efficiency plans have been implemented amounting to 128 million.

Manuel Mirat also pointed out that over the course of these three years, “we have also signed several collective agreements and created a positive workplace culture within the Group, and we have promoted the renewal of teams in both the editorial and management areas.” Likewise, “we have promoted the best corporate governance practices.”

He concluded: “In 2020, when the pandemic shook us all, at PRISA we reached out to and were closer than ever to our stakeholders, thanks to a very high level of social commitment and public service. This has allowed us to continue to be leaders in terms of audiences and social influence.”