PRISA has enjoyed a strong start to 2022 as the transformation undertaken by the company over the past year has begun to yield positive results. The restructuring embarked upon by the group, a firm commitment to digital operations, the clear recovery of both the Education and Media businesses and a new financial culture have together allowed the Group to report a significant improvement in its results for the first quarter of the year. What’s more, the recent signing of a debt refinancing agreement is set to endow the company with the necessary flexibility to focus on business development. The deal also provides medium-term financial stability, extends debt maturity and links financial strategy to Environmental, Social, and Governance (ESG) criteria.
According to Joseph Oughourlian, Chairperson of PRISA: “This is a decisive moment for the Group. All the changes we have undertaken mean that we can now look to the future focused on business growth and on the interests of our shareholders and employees. We have presented a medium-term strategic plan with clear and defined objectives, which we are focused on executing, and the results of the first quarter reflect that the path upon which we have embarked is, indeed, the right one. These first months of the year have been very good for the company, and there is a clear positive trend. We remain confident in the forecasts that we set at the beginning of the year, though we would be wise to be cautious in the face of the uncertainty caused by the war in Ukraine and the economic consequences that it may entail”.
Between January and March, the Group posted revenues of 210.6 million euros, 32.8% more than in the same period of the previous year. The reopening of schools in Latin America and robust growth for subscription models (Edtech) boosted the Education business, which registered an increase in revenue of 56.6% in the first quarter of the year. PRISA Media, meanwhile, saw revenue up by 7.2% thanks to the success of its paywall model and the strong performance of advertising (+11%). Digital revenue increased its contribution by 33% to account for 39% of the Group's total.
EBITDA, excluding severance payouts, was 43.8 million euros compared to 17.1 million a year earlier, which represents an increase of 156.3%. Exchange rates had a positive impact – to the tune of 4.8 million euros on revenues and 800,000 euros on EBITDA – during the first quarter of 2022, mainly due to the appreciation of the Brazilian real.
This strong performance of the businesses, together with the new culture of financial management that was implemented over the course of the year with a focus on operational improvement, cost control and the management of working capital, has enabled PRISA to register a positive net result of 100,000 euros, compared to nearly 14 million euros in losses seen just a year earlier.
The Group has also reported positive cash generation of 40.8 million euros in the first quarter of the year, 89% more than in the same period of the previous year thanks to operational improvements, control of capital investments and optimal management of working capital. As of March 31, the company's cash balance stood at 216 million euros, with a further 99 million in restricted cash.
The Group's net bank debt stood at 796 million euros at the end of March 2022 compared to 825 million in December 2021.
With regard to the Education division, the return to school normality in Latin America after the pandemic has contributed to a positive start to the year, but the most notable feature has been the broad success of subscription models (Edtech), which have grown exponentially to register 2,480,000 subscribers – an increase of 38.4% compared to Q1 2021 and of 25% compared to the number of subscribers registered at the end of last December.
The Covid crisis has highlighted the need for a more digitized education and Santillana’s commitment to education services based on Edtech systems has triggered rapid growth. The company is clear leader in this field, offering a global catalog of learning solutions, with constant updating of content and products, all of which are constantly adapted to the needs of families, students and schools.
By country, the increase in subscriptions in Colombia is noteworthy, where growth was 29%, followed by Mexico (+27%) and Brazil (+20%). It is also worth noting the robust growth seen in other countries such as Ecuador and Chile, both of which have seen subscriptions soar by over 150%.
These figures are a clear testament to Santillana's commitment to digital transformation. The company’s subscription models already represent its chief source of income and their success bolsters the clear lead enjoyed by PRISA's education business in Latin America, where it is the only platform present in 20 countries on the continent.
Thus, in the first quarter of the year, Santillana registered total revenues of 128.4 million euros, 56.6% more than a year before. In the private business sector, revenue was up by 53%, with a strong increase both in the subscription business, as detailed above, and in the didactic business, which has been boosted by one extraordinary sale in Argentina. In the public sector, revenues have also improved despite the first quarter not being a particularly important one for said sector. Strong revenue has translated into an improvement in EBITDA, excluding severance, of 91.7% (44.5 million euros in total, compared to 23.2 million a year earlier).
During the first quarter of the year, PRISA Media maintained the positive trend seen in recent months thanks to the continued growth of the EL PAÍS subscription model, the strong performance of advertising revenues, as well as the position of leadership enjoyed by the company in the markets where PRISA’s media are present.
Between January and March 2022, the Group's Media division registered flat EBITDA, excluding severance payouts, which represents an operational improvement if one takes into account that a year earlier it had registered a negative figure of 4.8 million. Revenues amounted to 82.5 million euros, which represents an increase of 7.2% compared to the first quarter of 2021. Advertising revenues grew by 11% in the period. Despite the uncertainty created by the Ukraine crisis, advertising has remained in line with expectations, although the extraordinary performance of Colombia stands out, where there has been a continuous improvement in market share.
Revenue from circulation reached 13.2 million euros, which represents an increase of 3.1% thanks to the growth in El PAÍS digital subscriptions (+33.8%). These figures clearly vindicate the commitment made by the Group with the launch in May 2020 of the EL PAÍS paywall model. There are now 196,228 subscribers, which represents an increase of 49% compared to the same date of the previous year. Of these, 155,939 are exclusively digital, 55% more than in the first quarter of 2021. The figure of 6.6 million registered users was reached, which represents a growth of 14%.
With regard to the audio business, the number of podcast downloads has grown by 49% compared to a year earlier, reaching 46 million, while the company clocked up 77.4 million hours of streaming per month (+19%).
The Radio division (SER, LOS40, Caracol Radio, ADN Chile, among others) has remained audience leader with more than 22 million listeners in total. Cadena SER has held on to its spot of undisputed leader in Spain with a total of 4,366,000 listeners, according to the latest General Media Survey (EGM), made public recently.
A commitment to Sustainability
Sustainability is one of the cornerstones of the Group's future growth and development. The company recently appointed Rosa Junquera to the post of Chief Sustainability Officer. This followed the Group’s creation of a new Sustainability Committee within the Board of Directors, with the aim of decisively promoting the company's strategy by aligning the management of the organization with the United Nations Sustainable Development Goals.
The group has set out five SDGs as priorities, and it actively promotes these through its media and through the work of Santillana Latin America: SDG 4, Quality education; SDG 5, Gender equality; SDG 8, Decent work and economic growth; SDG 13, Climate Action; and SDG 16, Peace, Justice and Strong Institutions.
PRISA has been part of the UN Global Compact since 2009, the world's largest voluntary corporate sustainability initiative, and since 2016 the Group has been a member of the Spanish Global Compact Network. In addition, PRISA collaborates with a range of foundations and organizations and is present in different benchmark indexes in the area of ESG criteria such as the FTSE4Good and the MSCI, among others.
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