April 11, 2021

Vocento loses 21.8 million in 2020 due to compensation and balance cleaning


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The Total operating income in 2020 from Vocento Group were 341.3 million euros, with a decrease of 13.5% compared to 2019, a fall that reflects the impact of Covid-19 on global economic activity, while the losses of 21.8 million euros are attributable, in addition, to indemnities related to future efficiency improvements, and to various non-cash expenses incurred to adjust the value of certain assets.

The sales of copies presented a fall of 9.1% during the past year, and the income from advertising sales decreased by 16.4%, with a better performance than the market (-22.5%). The evolution of the Group’s advertising revenue according to its national or local origin experienced a similar behavior: -16.1% and -15.9%, respectively.

While ‘online’ advertising shows a comparison of -6.8% vs. -13.3% in favor of Vocento, in offline advertising the ratios are -20.7% of Vocento vs. -26.4% of the market. In a quarterly sequence, a stabilization of the falls during Q3 and Q4 stands out, after the greater impact of the Covid in 2Q20. Regarding digital advertising revenues plus e-commerce and new digital businesses, the weight of digital within the Group increased by 4.3 percentage points to 45.8% of the total.

The cost reduction in 2020, in response to the impact of Covid on income, compensates for 71% of the annual drop in income and combines actions on variable costs (supplies, distribution, etc.) and fixed costs (ERTEs). With this, the operating expenses without depreciation were 319.6 millioneuros, 9.3% less than in 2019.

The Reported EBITDA amounts to 21.7 million euros and includes the impact of severance payments of 7.2 million euros and the remaining provision for Intereconomía debt, of 1.2 million euros, recorded in December 2020. The Comparable EBITDA It was estimated during 2020 at 34.4 million euros, which represents a decrease of -30.7% compared to 2019, with a better evolution in 2H20 (-17.8%) than in 1H20 (-48, two%).

The compensation of 11.5 million euros includes 7.2 million euros accrued in December 2020 for a restructuring plan that will generate annual savings of about 4.5 million euros from 2021. They are due, among others, to the closing of unprofitable businesses, such as the free Nervión, the magazineToday Heart or the local TV Teledonosti.

In this scenario, the consolidated net result in 2020 is -21.8 million euros, compared to 6.3 million euros the previous year. Without the effect in December of the indemnities accrued, the provision for the Intereconomía loan, the impairment of goodwill, mainly of the Provinces, and of certain assets, and in the opposite sign, of the result of the litigation with the Treasury, the consolidated net result would have been approximately -2.0 million euros.

With a consolidated balance of 476 million euros, the Vocento Group, thanks to measures aimed at strengthening its financial position, closed 2020 with a financial position of net debt (NFP) of -67.3 million euros, compared to -52.8 million in 2019. Financial debt excluding that originated by rentals remained stable in 2020, -46.6 vs -45.7 million euros in 2019. A milestone to note is the renewal of the syndicated loan in the latter part of last year. For its part, the Net / comparable EBITDA ratio stands at 2.0x.

Vocento has generated positive ordinary cash in all quarters of the year, reaching a total of 13 million euros during the 2020 financial year.

Results by business areas

In Newspapers, the operating income stood at 276.4 million euros, 14.9% less than in 2019, while the Comparable EBITDA amounted to 27.4 million euros, a decrease of – 34.9% compared to 2019.

The evolution of the Regionals profitability is strongly affected by advertising (-14.5 million euros, due to print, given that digital grew slightly), and to a lesser extent by the margin of printing and distribution, which falls by -1.3 million euros. In this context, it is worth highlighting the improvement in the overall margin of print diffusion and that of digital subscriptions for 674 thousand euros, and the savings in personnel and commercial costs, among others, which had a positive impact of 5.9 million euros .

For its part, the comparable EBITDA of ABC is impacted by the drop in advertising (-3.5 million euros, with almost all of the drop being concentrated on print) and to a lesser extent by the drop in both the spread (-1.4 million euros) and of the printing activity (-1.17 million euros).

It is worth highlighting the number of digital subscribers of the ON + payment models, which increased by 47% over 2019, reaching 58,000 subscribers with the incorporation of Today and El Comercio to the payment model. In the last part of the year, ABC has also launched its payment model, reaching 10,000 subscribers. EBITDA for digital subscriptions (On +, ABC Premium and KyM) amounts to 2.7 million euros in 2020.

In Audiovisual, the operating income reached 31.2 million euros, which is 5.3% less than the previous year, with falls of -5.7% in DTT, -4.8% in Radio and -1.3% in Content, a direct consequence of the low activity caused by the Covid crisis. The Comparable EBITDA stands at 9.3 million euros, compared to the 10.4 obtained in 2019.

In Classifieds, the operating income amounted to 22.8 million euros, 18% less than in 2019. The income of the area is impacted by the deconsolidation of the Infoempleo portal in 2019. Likewise, the environment has been especially adverse for motor and real estate classifieds, due to to the fall in prices derived from the effects of the restrictions. However, the evolution in online audiences and in the number of clients of both portals has been positive, which reinforces the growth potential of the business. Regarding comparable EBITDA, the decrease in 2020 of -23.4% is largely concentrated in 2Q20 (decrease of -83.6% in 2Q20, vs. -19.5% in 3Q20 and -16.0% in 4T20).

In Gastronomy and Agencies, the operating income reach 15.4 million euros, 12.5% ​​more than in 2019. Despite being a year marked by the Covid pandemic, the Group has seen an opportunity in 2020, with mixed formats and taking advantage of its audiences digital. Proof of this is the success of Gastronomika San Sebastián in audience (more than 20,000 registered attendees) and in international repercussion (attendees from 103 countries).

The Group’s objective is to improve its position as the main actor in gastronomy, reinforcing the areas in which it is present (congresses, events and publications). Hence the acquisition of Mateo & Co, a leading strategic consultancy in branding, marketing and communication, specialized in gastronomy and food in Spain. As part of the same strategy, VOCENTO has reached an agreement with the Universidad Pontificia de Comillas for a unique academic project for Training in Gastronomy, the objective of which is a training of the highest national and international level, and which would unite university degrees in agricultural engineering and agro-environmental, with that of business administration and gastronomy.

The Comparable EBITDA In 2020 it was 1.9 million euros, 2.7% less than in 2019, affected by the holding of fewer events compared to the same period of the previous year.

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