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PRISA’s EBITDA up 13.5% in comparable terms in the first half of 2018

24-07-2018

PRISA’s EBITDA up 13.5% in comparable terms in the first half of 2018
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  • Education sees revenue growth of  5.9% while EBITDA is up by 9% in comparable terms
  • Radio reports growth of 28.6% thanks to Spain and Latin America. The Press division shows continued digital growth and makes headway with its efficiency plan
  • Media Capital is integrated into the perimeter of the Group and increases its operating result by 9%
  • The efficiency plan generates savings of EUR 19.8 million, with an impact on EBITDA of EUR 15.7 million
  • Exchange rates have a negative impact of EUR 55.1 million on revenues and EUR  18.6 million on EBITDA
  • The group shows positive cash flow of EUR  0.4 million, compared to negative EUR 53.1 million in the first half of 2017
  • The refinancing agreement  comes into effect with amortization of EUR 480 million and extension of debt maturity until 2022
  • Net debt, as of June 2018, stood at EUR 973 million, compared to EUR 1,422 million in December 2017, after refinancing and the integration of Media Capital into the perimeter of the Group
  • The Group maintains its forecasts for the year

PRISA Group has registered a comparable EBITDA (at a constant exchange rate and without accounting for the temporary effect of IFRS 15) of EUR 149.6 million in the first half of the year, which represents an increase of 13.5% compared to the figure for the same period of the previous year, as reported to the National Securities Market Commission (CNMV). The result before taxes amounts to EUR 38.8 million compared to EUR 54.1 million the previous year. Net result is 0.4 million, against 13.9 million in the January-June 2017 period. Results were hit by the negative impact of exchange rates, which amounted to EUR 55.1 million on revenues and EUR 18. 6 million on EBITDA. The first half of the year ended with a positive cash flow of 0.4 million euros, compared to a negative cash flow of 53.1 million in the same period of the previous year.

The group's CEO, Manuel Mirat, summed up the first half of the year: "During the first six months of 2018, businesses have performed in line with the objectives set for the period, significant progress has been made in generating savings under the efficiency plan, and the refinancing agreement with banks came into force on June 29, extending the maturity of debt by five years and without significant contractual mandatory amortizations until 2022."

Education shows revenue growth of 5.9% and 9% for EBITDA, discounting the impact of exchange rates and the impact of IFRS 15, which came into force in January 2018. This establishes a new model for recognising revenues, and states that these are to be recognised when and only when an entity delivers its services or satisfies its performance obligations. Campaigns in the southern area performed well, with an increase of 10.9% in revenues and 18.8% in EBITDA.
The Radio division continues apace with its consolidation. In Spain, PRISA Radio advertising grew by 3.9% in the first half of the year. In Latin America, total revenues are up by 7.4% in constant currency. Adjusted EBITDA for Radio is up by 28.6% and is at EUR 28.3 million thanks to the growth of advertising and strong operating leverage.

Meanwhile, PRISA Noticias, which encompasses the group’s news media, reported 129 million unique browsers at the close of the first half of the year, which represents a growth of 29%. Newspaper EL PAÍS maintains its lead in the Spanish-speaking world, reaching 85 million monthly users on average. Total advertising revenue for PRISA Noticias fell by 2.5%, but digital advertising grew by 9% and now accounts for 51% of total advertising revenues. At sports daily AS digital revenues now account for 76% of the total.

Media Capital, which has been integrated into the Group's perimeter, has reinforced its lead  in Portugal, both in terms of market share and profitability. Adjusted EBITDA grew 9.1% to reach EUR 19.9 million. Mirat explained that "Media Capital is a very solid asset, a great source of revenue, which this year brings a dividend of 17.6 million, and with very positive results in a favorable macro environment. The company's goal is to maximize its value."

On the financial situation of the Group, the CEO highlighted that "after the capital increase carried out at the beginning of the year and thanks to the refinancing agreement, PRISA has managed to achieve a financial structure that is supported by revenues from its current perimeter, and is endowed with flexibility for growth and the creation of further value ".

"The objective of the company is to continue improving its financial structure until reaching a net debt / EBITDA ratio in 2020 below 3," says Mirat. Specifically, PRISA's net debt as of June 2018 stood at 973 million euros compared to 1,422 million euros in December 2017, after accounting for refinancing and Media Capital’s integration into the perimeter of the Group.

Other significant events by business units

Education

  • In the northern area, Spain lags behind the same period of 2017, while Mexico grows 25% in local currency driven by public tenders.
  • UNO and Compartir learning systems have reported student growth of 8% to exceed one million users.
  • Exchange rates have had a negative impact chiefly in Brazil and Argentina. This impact on revenue was EUR 50.3 million and EUR 18.8 million euros for EBITDA.

Radio

  • Last quarter EGM results confirm the lead of PRISA Radio stations in Spain. Cadena SER celebrates 25 years of uninterrupted leadership and all its programs are leaders in their respective time slots. LOS 40 is the leading music network with an audience share of 21%.
  • Adjusted revenues were up 2% in constant currency, driven by growth in Spain and good performance in Latin America.
  • There’s notable growth in local currency in Colombia (11.3%) and Chile (8%).

Press

  • Adjusted EBITDA is EUR 4 million compared to 6 million in the same period of 2017.
  • Events grew by 1.7% to EUR 3.7 million.
  • Cost control continued apace, with costs down by 6.6%. The implementation of the efficiency plan after the agreement with third parties for the printing of newspapers, plus other measures, will continue to generate savings throughout the year.

Media Capital

  • Advertising revenues showed growth of 2.6%. Other revenues (channel and multimedia rights) registered an increase of 6.3%, excluding the impact of  IFRS 15.
  • TVI reported revenues of EUR 71.4 million in the first half of 2018, an increase of 1.7%.
  • Media Capital’s Radio business reported an increase in revenues of 4%, with an operational improvement of 19.6%

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