PRISA's Annual Shareholder's Meeting 2010

IGNACIO POLANCO: "A firm commitment from the reference shareholders to the operation with Liberty. It is the right move and one that will see PRISA emerge from the downturn strengthened." 

CEBRIÁN: "The most immediate goal for PRISA is to reduce our level of debt through the sale of assets and the strengthening of our own funds."

• Ignacio Polanco stressed that, despite the crisis, 2009 was positive for PRISA, with the company reporting a consolidated result of over 50 million EUROS and profits across all its companies.
  
• The PRISA chairman believes that the position of the Group's stock in the markets does not reflect the true value of the Company.
  
• Cebrián highlighted the support from financial institutions for the Group's plans.
  
• The president of the Executive Committee stressed that PRISA is being transformed into a consumer-targeted advanced technology company.
  
• He highlighted the fact that Brazil and the US were the Group's priority markets for growth in the areas of radio and education, as well as an area of growth for audiovisual production operations.
  
• In order to guarantee an orderly management of football-broadcast rights, Sogecable has deposited 90 million Euros with Barcelona's Court No. 7, as a first payment for the football rights for next season with the aim of ensuring that the money is received by the football clubs.

 At its Annual General Shareholders' Meeting, Grupo PRISA today approved its accounts for the financial year 2009, which posted positive results with consolidated turnover of 3.209 million Euros and a consolidated EBITDA of 624 million Euros, 30 percent of which was generated abroad. Despite the economic crisis, all the business units reported profits. Chairman Ignacio Polanco told the meeting there would be continuity in the control and management of the Group, while the CEO and president of the Executive Committee gave details of the financial restructuring plans of the Group, which are progressing well thanks to partial disinvestments and the infusion of capital.

The Meeting this year voted not to pay out dividends based on 2009's results.

After describing the backdrop of economic crisis affecting us, Ignacio Polanco expressed his satisfaction with the Group's positive economic results last year. "2009 has been a positive year for our Company. The consolidated result for the Group in the year has exceeded 50 million Euros. The four business units into which we group our activities - audiovisual, radio, press and publishing - posted positive results."

The chairman outlined the agreements signed with strategic partners in different areas of the Group's operations, saying that in this way "we find ourselves in a stronger position thanks to the collaboration of outstanding partners with whom we can count on, and we can avail of resources that will enable us to reduce the weight of our debt." With regards to the agreement with, Liberty Acquisitions Holding, Polanco was eager to stress the firm commitment of the reference shareholders to the accord: " This operation will lead to the dilution of existing shareholders of the Company. You will understand the sacrifice involved for everyone, especially for reference shareholders, but we remain convinced that it is the right move and one that will see PRISA emerge from the downturn strengthened."

Polanco announced modifications to the number of Board members, which was fixed at 13, but he also said that in the near future it will be necessary to adapt the structure and composition of the Board to adapt it to the result of ongoing capital operations. The Board also proposed the continuation of Borja Perez Arauna as director representing controlling shareholders, proposed by Timon, as well as the voluntary departure of Javier Diez de Polanco, who has served on the Board of Directors of PRISA over the last ten years.

CEO and president of the Executive Committee, Juan Luis Cebrián, gave an overview of the current economic crisis and the measures taken by PRISA over the past year and a half. He underscored the fact that: "PRISA makes money, and has continued to make money during these difficult years in all its business units. Its companies are generating significant turnover, and the strength of its activities and the strength of the markets in which it operates are our best guarantee of solvency."

Regarding the performance of the Group's companies, he stressed the unique revenue structure of the Group where only 28 percent of income is derived from advertising "with pay-TV subscription sales, and books and publications, being the most important revenue sources. It means we're well placed to face the ups and downs of the business cycle."

Cebrián explained that "since January 2009 the best of our efforts have been focused on refinancing the company, on strengthening its balance sheet and capital structure, while improving the productivity of business units by means of a significant reduction in operating costs, which included the voluntary 8 percent pay cut in the salaries of all directors."

The CEO said that "in the healthy performance of our accounts, the operational efficiency plan plays an important role. Launched by the corporate center, it has enabled us to reduce company overheads by 247 million Euros", a 15.3% reduction in costs as compared to the previous year.

Juan Luis Cebrián reminded the meeting that "we intended from the very outset to maintain the consolidation of the Group, as we are convinced that maintaining the current profile of PRISA is what makes this company unique and one with a great future." He reviewed operations that involved selling minority stakes in some of the companies, some of which have already be finalized such as the sale of 25 percent of Santillana to DLJ for 279 million Euros; others are pending the decision of the Spanish competition authorities such as the sale of 22 percent of Digital+ Telefonica, for a final value 485 million Euros and another 22 percent of D + to Mediaset / Telecinco for 485 million Euros, as well as the merger of Cuatro and Telecinco in exchange for an 18.3 percent in the resulting company.

Cebrián said that: "both the technical services of the CNC and its policy makers need to be sensitive to the urgencies that arise in operations such as those discussed. At times like these, it is necessary that everybody involved acts swiftly to prevent damaging the productivity of these enterprises."

Responding to recent reports on the so-called "Soccer War", and the court ruling against Mediapro, which orders it to return all football-broadcast rights and pay out 105 million Euros to Sogecable, Cebrián insisted that "Sogecable will meet all its contractual obligations regarding the broadcast of the matches, and it is satisfactory to know that all Mediapro operations are now performed under the supervision of legal administrators. There can therefore be no doubt that D + will continue to offer their subscribers all football matches, under identical conditions to those of the last season." In this regard, the president of the Executive Committee announced that in order to guarantee an orderly management of football-broadcast rights, Sogecable has deposited 90 million Euros with Barcelona's Court No. 7, as a first payment for the football rights for next season with the aim of ensuring that the money is received by the football clubs.

Turning to the recapitalization of Le Monde, the PRISA CEO clarified that despite the offer from three outside investors, nothing has as yet been decided "on the basic issues at stake, and I expressed my concerns to the Board of Directors about the transparency of the proceedings and the appropriateness of Le Monde accepting the offer. I also announced our decision to enforce our rights as shareholders, given the contractual protections enjoyed by our investment."

Cebrián criticized the passivity of the major political parties when it comes to enacting legislation to enable the press to find a more promising future than that which most likely awaits us. "I say this not on behalf of El País, one of the only prestigious newspapers worldwide, and the only one Spain, to turn a profit, but on behalf of a sector whose importance for the maintenance and development of representative democracy is often on the lips of politicians, the same politicians who seem unable to come to its support unless it's motivated by patronage, sectarianism or servility."