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Interview with Miguel Ángel Cayuela, CEO of Santillana

24-07-2019

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As the publishing group continues to foster and promote learning systems – an education model that integrates school and student and which has been successfully implemented throughout Latin America – Santillana CEO Miguel Ángel Cayuela explains how these systems are the future of education.

 
Question. PRISA sought to put Santillana up for sale in 2016 yet has now ended up buying back the outstanding 25% it didn't own to gain full control of the company. How does this affect the company's strategy?

Answer. In the day-to-day operation of the company it has little effect, but at the corporate level it puts the company in another position: as owners we’re 100% owners and, therefore, can make our own decisions – decisions that affect the business and define future strategies.

Q.PRISA has businesses in both the media and education sectors. Does that make for a good marriage?

A. What weds them is the spirit of PRISA. Although they’re very different businesses and clearly act independently of each other, they share the same spirit of modernity, of commitment to contributing to society, commitment to innovation and responsibility. In our case, that responsibility can be seen in our commitment to educating and training children and young people in skills. So that they’ll be equipped to function successfully in an increasingly demanding society, one that constantly requires new skills and abilities.

Q. What forecasts is Santillana managing for this year?

A. We’re looking at organic growth of over 10% this year, with outstanding results in important markets such as Brazil, Spain, Mexico and Colombia.

Q. Might that organic growth be boosted through the acquisition of competitors?

A. We haven’t ruled that out, should opportunities arise, but we would have to study those carefully.

Q. Has Santillana been effective in taking advantage of such opportunities in the past?

A. At Santillana we’ve made very few purchases throughout our history, but I think that when we have, they’ve worked out well. The most important was the acquisition of Editorial Moderna in Brazil, in 2001. It allowed us to enter that market, where we have since successfully developed subscription systems – and that has proved to be key to the company's growth. It’s a huge market, with a very active education sector. Our last acquisition was Norma, in 2016, a publisher with a Colombian parent company and a presence in Argentina, Peru, Colombia and Mexico. In just two years we’ve quadrupled its value.

Q. And has the company been able to adapt to technological changes?

A.  When it comes to technology, processes never actually end. What we do know is that in the geographical area in which we work, the company has always been a pioneer. It was a pioneer in the mass introduction of technology into learning systems in Latin America, where we were instrumental in digitizing thousands of schools between 2011 and 2016. Up till then, technology had been looked at as a goal in its own right.  Today we know that, while it has many advantages, it should not be a destination  for its own sake. It needs to be a tool to ensure the best possible learning outcomes. We no longer speak of technology as mere hardware. Rather, we speak of education technology, of edutech. There’s been a qualitative leap and for us it is a  key development area that requires new professional profiles.

Q. Will digital books effectively spell the end of the traditional textbook?

A. Digital books are neither good nor bad, per se. Nor is a print book. Everything has to be part of an ecosystem whose goal is for the student to learn better. Today, both formats can happily coexist in schools. But we must recognise that our digital projects are going from strength to strength and that our initiatives in this area are constantly getting better and, therefore, becoming ever more useable.

Q. Are subscription systems your key to ongoing growth?

A. In Latin America, Santillana now offers comprehensive, integrated learning systems with subscription models, such as Compartir, UNOi and Educa. We deliver these systems to more than 3,000 schools in 15 countries and we have 1.4 million students currently using our platforms. What’s more, ARPU (or income per student) derived from these systems is clearly superior to that of the traditional business model. It’s not so much about selling separate digital books versus print books or other tools, but more about offering ecosystems that seeks to achieve greater across-the-board consistency in how we approach learning and how this might be implemented in schools: LMS platforms that include content, evaluation tools, advice and training for teachers, technology… The school is the engine of educational transformation and we believe that this comprehensive strategy directly impacts the learning outcomes of students and, therefore, offers greater value to the school.

Q. What are some of the advantages?

A. Our learning systems are now well established in Brazil, where they were first rolled out. And we’ve now exported them to the rest of Latin America. They involve a longer-term relationship with the school and its teachers, since we sign three- or four-year contracts for all subjects. That allows us to offer them a better, more personalized program, and establish bonds of trust and mutual commitment with schools throughout the learning progress. We become, in a sense, school consultants, designing with them continuous improvement plans. Internally, for Santillana it has meant a radical change in our way of working and in the professional profiles we need.

Q. Why don't you market these systems in Spain?

A. In Spain, this is very difficult to implement. There’s no single education market – there are 17 markets, one for each regional authority. The curricular and linguistic diversity is enormous.

Q. In Brazil, your rival, ARCO, also offers an education subscription model. Does competition worry you?

A. On the contrary. I wish we had similar competition in the rest of Latin America. If a market is to change, it’s easier if there are lots of players. Competition helps create a dynamic of transformation, it makes everything move faster.

Q. The competition regulator CNMC has fined Spanish textbook publishers, including Santillana, EUR 33 million as it considers that the ethical code they had signed prevented free competition. There’s since been an appeal. Do you think the appeal will prevail?

A. I think we have many arguments in our favor with regards to this appeal. What’s more, we have studies that show that the ethical code did not, in fact, hamper or hinder competition or access to market share.

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