PRISA’s commitment to digital and robust advertising revenues boost business results in second quarter

• Between April and June, the Group's revenues grew by 60.6% to 147.7 million euros, a clear sign of robust recovery. Santillana posted an increase in revenues of 76.4%, while the figure for PRISA Media was 52.6%

• The whole first half of the year saw Group Adjusted EBITDA of 22.9 million euros, in line with the previous year
  

• Digital revenues totaled 105 million euros, with their contribution to total Group revenue up by 12% to 34% of the total
  

• Santillana saw the number of subscription students in Latin America climb by 10% to 1,885,000 in total
  

• El PAÍS reached 152,085 subscribers, of whom 109,099 are exclusively digital. The Radio business has registered a monthly average of 66.5 million streaming hours and 31.5 million podcast downloads: 20.3% and 34.2% growth, respectively.
  

• The plan to reduce fixed costs of 30 million euros over the year continues apace. In June, two-thirds of the total cost-savings goal had already been reached
  

• As of June 30, the company's cash balance stood at 201 million euros, with a further 122 million in restricted cash
  

• Net debt stands at 743 million euros, compared to 679 million in December, and almost 400 million less than in June 2020
  

• PRISA has reduced losses by 73.5%, with a negative net result of 56.2 million euros – compared to negative 212.1 million in the first half of 2020
  

• The Group continues to forge ahead with its new organizational structure, one that reinforces both the Education and Media businesses while driving their digital transformation

The growth of advertising, the Group’s commitment to digital transformation and the headway made by the cost-cutting plan have together had a positive impact on second-quarter PRISA figures, which show that the company is making a robust recovery. Group revenues reached 147.7 million euros between April and June, representing growth of 60.6%. The Media division reported 98.2 million euros in revenue (+ 52.6%) and the Education business 49.8 million (+ 76.4%).

Over the course of the second quarter, the Group has taken a range of steps to consolidate its new operating structure – namely, the division of its business into Education and Media divisions – and this, in turn, has allowed it to continue to forge ahead with its strategic roadmap aimed at accelerating digitization, boosting the global reach of products, brand growth and a commitment to subscription models. Together these measures put the Group in a position to more fully tap the full potential offered by the leadership and quality of its wide range of different media.

Joseph Oughourlian, Chairperson of PRISA, explained that “after a difficult start to the year, which saw the two main engines of our business at a standstill due to the effects of the pandemic, performance during the second quarter signals a recovery that we expect to continue throughout the rest of the year. The Media business has enjoyed a positive boost between April and June, thanks especially to investment in advertising and the good performance of the digital area. We also expect there to be a steady reopening of schools in Latin America during what's left of the year. and that will allow us to consolidate recovery in the Education business. Of course, we are mindful of the complex economic environment and the climate of uncertainty surrounding the pandemic, which means that we continue to take all necessary measures while looking to the future with the utmost caution”.

Adjusted EBITDA (at constant currency and without counting compensations) amounted to 22.9 million euros at the close of the first two quarters, in line with the figure a year earlier. The net result shows losses of 56.2 million euros, which means losses are down by 73.5% when compared to the first half of 2020, which saw losses of 212.1 million.

The Group posted revenues of 306.2 million euros in the first half of 2021, of which 34% derives from digital business. Indeed, digital businesses have seen their contribution to overall revenues grow by 12%, clearly showing that the Group’s firm and ongoing commitment to digital transformation is paying off.

Exchange rates have had a negative effect of 23.5 million on revenues and of 4.6 million on EBITDA, due chiefly to currency devaluations in Brazil and Argentina.

With regard to net debt, this stood at 743 million euros as of June 30, compared to 679 million in December. However, compared to June 2020, net debt has been reduced by about 400 million. The company's cash balance stood at 201 million, with a further 122 million in restricted cash.

PRISA has also continued to make considerable headway with its cost-cutting plan, which envisages savings of 30 million for the year as a whole, and which is part of the contingency plan launched last year in response to the impact of the pandemic. As of June 30, the company had already reached two-thirds of its goal, set at the beginning of 2021. Reining in costs and Group cash generation will now be central to the Group’s strategy, according to the new CFO, David Mesonero.

EDUCATION

Second quarter results for the Education division show a clear improvement across all its operations. There was a 76.4% growth in revenues between April and June to 49.8 million euros, thanks to the beginning of the school year in some countries, as well as sales to the state school system in Mexico and Brazil and the buoyant performance of digital business. Nevertheless, the quarter, as a whole, saw revenues down by 35.7% due to the negative impact of the initial months during which schools were closed. Comparisons with last year are unhelpful, of course, given that January and February 2020 had not yet felt the impact of the coming pandemic.

Subscription models continue to grow, demonstrating their strength in a very difficult period and testament to the consolidation of Santillana's leadership in the Latin American market in this key segment. Indeed, digital business is already the main source of income for the Group's education division, which has registered growth of 10% in the number of subscription students, to reach 1,885,000 schoolchildren in total. By the end of 2021, Santillana expects to hit the figure of two million.

Half-yearly EBITDA was 12.9 million euros, compared to 42.2 million in the same period of the previous year. The prospect of an improvement by the end of this year and the Group's commitment to transformation and digitization in the educational market in Latin America suggest that there will be a recovery with regard to these figures for the year as a whole.

MEDIA

PRISA’s Media businesses performed well in the second quarter thanks to the solid recovery of the advertising market (+ 60.6%), digital growth and cost control. Thus, revenues increased between April and June by 52.6% to total 98.2 million euros. For the whole of the first half of 2021, growth was 17.4%.

Adjusted EBITDA (not counting compensations) was 25.6 million euros for the period between January and June. During this period, the Group has promoted the creation of new products and has developed new transversal platforms embracing audio and the automotive sectors (Audio and Motor), a model that allows PRISA to tap the full potential of its assets, while, at the same time, expand the scope of content on a global scale and seek out synergies with other stakeholders to generate innovative digital products.

The Radio division continued to promote its strategy of creating new digital audio content, multichannel distribution and product innovation with initiatives such as SER Podcast and LOS40 Podcast, which together with Podium Podcast (the leading platform in Spain and Latin America), continue to gain followers. Success in this department was reflected in the growth in the number of streaming hours and podcast downloads, which registered a monthly average of 66.5 million streaming hours and 31.5 million podcast downloads: 20.3% and 34.2% growth, respectively.

Radio has thus reinforced its indisputable lead, with more than 22 million listeners. The SER network maintains its absolute lead, with 4,220,000 listeners (34% of the market share), while LOS40 is clear Number One for music radio, with an audience share of 23%, according to the latest EGM (General Media Survey). In Latin America, Grupo PRISA radio stations also maintain their lead, especially in Chile and Colombia (with audience shares of 44% and 26%, respectively).

With regard to the Group's News division, EL PAÍS accelerated the transformation of its payment model by increasing the number of exclusively digital subscribers to 109,099 (out of a total of 152,085). Of these, 28% are from outside Spain, which confirms the Group's truly global reach. The number of registered readers continues to see strong growth, exceeding 3.6 million in June 2021, a growth of 23% compared to a year earlier. Digital advertising revenue for the News division now accounts for 73% of total advertising revenue.

Sports newspaper Diario AS, meanwhile, has consolidated its growth and international expansion and has established itself as world leader for sports news in Spanish. In June 2021, the newspaper’s digital advertising accounted for 90% of the total and it enjoyed a large international presence.