PRISA holds its General Shareholders’ Meeting

• Shareholders voted not to pay out dividends on 2008's results, nor to do so until the Group's consolidated debt stabilizes.
• Ignacio Polanco stressed that 2008 reported a positive EBITDA of 948 million euros (+21.6%) and a net result of 83 million euros, thanks to the Group's business and market diversification.
• The president announced important changes to PRISA's Board of Directors: an age limit of 75 has been set for members, and remuneration is cut by 10% with respect to 2007's figure. No payments will be made for the year 2008.
• Cebrián highlighted the banks support for the Group - the bridging loan has been extended for one year until March, 2010, and negotiations are underway on a new financial plan that will guarantee the stability of the group in the long term.
• The CEO announced that new partners will be sought out for a new strategic plan that involves a thorough technological and organizational transformation.
• Likewise, he pointed out that the print media business model was already being changed with the division of EL PAÍS into three different companies and the merger of the print and online newsrooms.
• Cebrián outlined the reorientation of strategy in the audiovisual area, where football broadcast rights have been recovered for Pay TV. Negotiations are underway with Imagina with a view to creating an audiovisual group that will be among the most important in the world.

PRISA's General Shareholders' Meeting has approved the financial year 2008 consolidated accounts which show EBITDA of 948 million euros (+21.6%). The Group's president, Ignacio Polanco, gave shareholders a message of calm while CEO, Juan Luis Cebrián, announced changes to the group's business model to be based on technological development.

The meeting voted not to declare a dividend for 2008. In accordance with policy regarding dividends, none will be paid out until the consolidated debt stabilizes at a level no greater than 3.5 times EBITDA.

After explaining how the general and global economic crisis was affecting us all, Ignacio Polanco expressed his satisfaction with the Group's positive economic results for 2008. "The different companies within our group have reported a total profit of 83 million euros. In a turbulent business environment, with a marked drop in advertising revenues in some sectors, our mix of revenue bases has led to a positive result," he said.

The president highlighted that the decision to make changes to the structure of the Executive Committee and the other Board committees, announced at the meeting, was the correct one and had led to increased dynamism and operational efficiency.

Polanco announced a series of structural reforms to the Regulations governing the Board of Directors which will contribute to creating a new perception of the company's corporate governance. The Board voted to set an age limit of 75 for members of the company's governing bodies. Thus, board members Jesús de la Serna and Juan Salvat tendered their resignation, while Francisco Pérez González and Manuel Varela also leave the Board as their term of office ended on April 15. Meanwhile, the president proposed creating the role of Honorary Director and appointing Francisco Pérez González to the post. He will attend Board meetings without the right to vote.

The president also announced modifications to the remuneration policy of the Board, proposing that the current system based on profit and dividends, be changed to one whereby members would be paid a fixed sum, to be determined by the shareholders' meeting. The Board presented a motion calling for a 10% pay cut with respect to 2007's figure. Polanco also announced that the Board would not enjoy remuneration for the year 2008.

Juan Luis Cebrián, CEO and president of the Board's Executive Committee, reviewed the initiatives that had been embarked upon at the beginning of the year. He recognized the fact that "we are going through some difficult times. But the situation is not desperate nor chaotic and it it does not threaten the future of the Group." He pointed out that "PRISA has a great present and an even better future. The group has no rival, short or medium term, and possesses a huge patrimony in its sector: information, culture, education and training."

Cebrián pointed out that "last May, PRISA and the banks had signed an extension to the bridging loan, worth 1,835 million euros, till March 31, 2010." The terms of the credit extension involve a restructuring of the company's total debt, which is already under negotiation and which will finalized by the end of the year. He also stressed that "the group now has the time it needs to adopt the necessary measures that will enable us to reduce and restructure our debt and return, in a relatively short space of time, to a situation of normality."

With regards to the performance of the group's different companies, he stressed that all were robust, pointing out that "almost all of PRISA's companies show a positive margin and that we are clear leaders in most of our business areas and those regions where we operate." The unique structure of revenue sources for the Group, in which advertising only accounts for 28% and 19% derives from international markets, means that Prisa is better placed to weather the turbulent economic times than any of its competitors.

Regarding the impact of the financial crisis on PRISA's businesses, Cebrián explained that income fell an average of almost 10% in November and December 2008, but that the company remains committed the goal of achieving EBITDA similar to that of 2008. This forecast is based on, among other things, the implementation of a rigorous austerity and cost-cutting drive which has been underway since the beginning of the year, the strong performance of some operations, notably audiovisual production, online activity, international radio, and the spectacular performance of Santillana, "which has grown two digits despite the financial storm". Education is, he said, by its very nature an anti-cyclical business and Santillana is one of the strongest performers in the Group.

The company has undertaken a series of initiatives aimed at reducing costs, improving productivity, regrouping businesses and adopting new technology. This will translate into savings of at least 12% with respect to the previous year. And new measures are to be adopted which will improve operative efficiency such as a pay freeze on salaries over 80,000 euros. A pay cut of 8% is being proposed for executives earning more than 100,000 euros gross a year. With regards to personnel governed by collective agreements, negotiations are to get underway with unions with a view to pay cuts in exchange for a reduced timetable.

Cebrián pointed out that "the immediate goals of the company are to reduce the level of debt, to strengthen the capital structure, to improve operations, with particular stress to be placed on generating revenues, and to maintain the current drive towards consolidation while endeavoring to protect jobs". He stressed the point that all of the group's policies are geared towards improving content and the subsequent distribution through global platforms that are shared with other operators. But he insisted that the company will not dispose of any company asset at prices that will reduce shareholder value.

Cebrián said that PRISA faces the challenge of developing a new business model as all of the group's activities are going to be quickly and sharply affected by the digital society. "It's an opportunity to widen markets, improve efficiency, improve products and to grow profitably. Thanks to technology we plan on transforming our business models and bringing about the genuine cultural change our company requires  both at the level of corporate governance as well as management." He added that this will require finding new partners who will bring with them their knowledge and know-how, thus guaranteeing the development of Prisa in the global markets of culture, information, education and training in Spanish and Portuguese.

The answer to the doubts raised over the future lies in technological change, he said. "I am convinced that EL PAÍS will remain, over the coming decade, the leading and most authoritative newspaper for understanding society and for the creation of public opinion."