PRISA reached an EBITDA of 227.77 million Euros in the first nine months of 2013 (-43.5%)

Growth in revenues from LatAm despite negative FX impact. Better performance of advertising in Spain and Portugal. The revenue increase in Pay TV on the back of the new commercialisation model does not compensate the higher football rights costs. Strong efforts in cost control continue

 LatAm represents 26.1% of the Group’s revenues and 58.1% of the Group’s EBITDA

• Advertising in Spain and Portugal shows a clear improvement in the third quarter standalone,with a 2.9% growth,compared to the 12.3% fall of the second and the fall of 14.7% in the first quarters. The improvement takes place in all media divisions: Press, Radio and Media Capital.

• Santillana increases its revenues by 3.9% at constant currency (-3.3% in Euros). In the first nine months of 2013 the education business has been negatively impacted by the FX evolution and by lower sales in Spain (where 2013 is a low year in its education cycle). The investment effort in Digital Education Systems continues.

• The Pay TV business increases its revenues by 11.6% but its recurring EBITDA falls by 84.6%, mainly due to the new football rights exploitation model.        
  The beginning of the new football season has had a positive reflection in the DTH subscriberevolution. DTH subs have reached 7,818 and 15,087 positive net adds in August and September respectively. The third quarter of 2013 is the first quarter with positive net adds since 1Q 2012. Canal+ continues to improve its market share (to 43.8% in the third quarter of the year, according to internal estimates).        
  Satellite subscribers ARPU stood at 42.5 Euros on average (+0.5 Euros compared to 9M 2012). YOMVI subscribers reach a penetration of 25.3% of Satellite subscribers (compared to 13.2% at September 2012), with 2.61 million monthly downloads (0.97 million as of September 2012).

• Digital advertising revenues grow by 7.1% compared to a market fall of 4.5%. We highlight Press (+8%) where they accounted for 24% of total advertising revenues for this division. As of September 2013, total number of unique browsers of the Group’s web pages reached 82.5 million (+17%) where we highlight the growth in Elpais.com (+16%), international radio (+27%) and As.com (+28%). 

• The company maintains its strong cost control effort. Total expenses excluding amortization and provisions, and adjusted by redundancies and the impact of the new agreement on football rights fall by 4.1% (Spain -7.7% and international +1.9%) in the first nine months of 2013. We highlight the reduction of 7.4% in staff costs (Spain -9.6% and International -3.5%)

• Call of General Extraordinary Shareholders Meeting for December 10^th 2013 to approve the issue of warrants, derived from the Group debt refinancing process currently taking place.       
  The main characteristics of the refinancing, include: increase of maturities, an additional financing line, an average total cost of Euribor+342bps (in cash and PIK), a structuring commission, availability of time to reduce debt through the sale of non-strategic assets, leverage of other assets and several corporate transactions, during a period of three years and the possibility to purchase debt at a discount with the proceeds obtained.

Net financial debt stands at 3,241.60 million Euros.

9M 2013 Highlights:

• Advertising revenues in the first nine months of the year reach 377.95 million Euros, implying a 5.9% fall compared to the first nine months of 2012, and account for 18.8% of total Group revenues (20% in the first nine months of 2012). In the third quarter standalone, the evolution of advertising revenues shows an important improvement compared to previous quarters (+2.2% compared to -8.4% in the 2Q and -10.4% in the 1Q of 2013).

• In Spain, advertising revenues diminished by 7.9% in the first nine months of the year. In the third quarter standalone Spanish advertising revenues have grown by 5.2%, which implies an important improvement compared to previous quarters (-9.6% in 2T 2013 and -15.7% in 1Q 2013)
• Growth in Latin American advertising of +3.5% (27.2% of the Group’s advertising revenues).

• Education: Revenues (562.9 million Euros) fall by 3.3% on the back of the negative FX impact. At constant currency they grow by 3.9%.
  • Latin America shows flat revenues (+10.2% at constant currency). We highlight the growth of Colombia (+49%), Mexico (+3.3%), Ecuador (+12.1%) and Argentina (+10.7%). In Brazil (+1.9%) FX has a very negative impact (at constant currency, revenues increase by 17.3%).
  • Spain sees its revenues fall by 11.6% on the back of a 13.1% fall in its education revenues, as 2013 is a year with little new materials. General Publishing shows a positive performance in its revenues, which grow by 3.8%).

Adjusted EBITDA reaches 153.3 million Euros, a 16.6% fall, given the important investment effort in Digital Education Systems.

• Pay TVrevenues reached 869 million Euros and recurring EBITDA 25.2 million Euros.
  • Net adds in satellite subscribers show in the third quarter of the year a very positive performance given the good beginning of the new football season, with net adds of 1,835 in the quarter (7,818 and 15,087 net adds in August and September, respectively). Net adds decrease in the first nine months of the year by 86,284, although Canal+ increases its market share.
  • Net adds in subscribers from other operators of Canal+1 (including OTT) grew by 2,872.
  • Satellite ARPU stood at 41.5 Euros on average in the 3Q of the year (42.0 in 2012)
  • iPlus subscribers reached 37.5% or 612,887 (34,901 more than at September 2012)
  • 414.000 satellite subscribers are also subscribers of YOMVI, a 25.3% penetration.

• Media Capital: Revenues (129.5 million Euros) fell by 2% impacted by the 11.4% fall in advertisement (although the third quarter standalone shows improvement). Recurring EBITDA (24.1 million Euros) fell by 2.6%, thanks to its development strategy and to the important effort in cost control. TVI maintains the leadership in prime time with a daily average audience share of 28.9% in the first nine months of 2013.

• Radio: Revenues (253.3 million Euros) fell by 5% versus the first nine months of 2012, given mainly the lower advertising in Spain (-12.6%). Improvement of Latin America advertising (+4.4%) with a strong performance in Colombia (+6.5%), Chile (+3.5%) and Mexico (+10.6%).

• Press: Press revenues (200.1 million Euros) fell by 16.4% compared to first nine months of 2012. This is explained by the weakness in advertising (-12.6%) which has shown an important improvement in the third quarter standalone (+6.2% compared to -16.3% and -20.8% of the second and first quarters respectively), and the lower circulation numbers (down by -16.6%). Recurring EBITDA reached 12.6 million Euros (+8.4%).

• Digital Area: Digital advertising showed a growth of 7.1% in the first nine months of 2013 compared to a market fall of 4.5%.The digital area received a monthly average number of daily browsers of 82.5 million as of September 2013, which represents a growth of 17% thanks to the strong growth in Prisa TV, El País sites and AS.com, as well as International Radio.

• Total expenses, excluding the negative impact of the increased Football rights have been reduced by 4.1% (Spain -7.7%, international +1.9%). Staff costs have fallen by 7.4% and Purchases have fallen by 6.1%.

Consolidated Results

The comparison of the results of the first nine months of 2013 and 2012 is affected by extraordinary items recorded under both revenues and expenses andwhich mainly correspond to: a) the registry criteria of the sponsorship of certain events and the re-invoicing of several football rights costs (although both adjustments have no impact at EBITDA level), b) the redundancy expenses on the back of the personnel restructuring; c) the writedowns registered in 1H; d) the resolution of certain legal disputes which impact taxes; e) the 54.37 million Euro provision for the ONO agreement. (see notes on following pages).

Additionally, in 2012, an adjustment was made for the consolidation of Dédalo as from April; this adjustment has not been made in 2013 as it is no longer considered an extraordinary event.

To conduct a homogeneous comparison, we are presenting a profit and loss account adjusting these extraordinary items.

Results

PRISA Results (presentation)