Vocento obtains a consolidated net profit of 10.9 million euros in 2018

Vocento obtains a consolidated net profit of 10.9 million euros in 2018

The Group's advertising revenues have registered a progressive improvement throughout the year after closing the fourth quarter with an increase of + 0.4%

    Vocento closed 2018 with a net profit of 10.9 million euros, compared to losses of 4.8 million registered in 2017. The final figure represents an annual increase of +15.7 million.

The group recorded total operating income of 386 million euros, 2.3% less than the previous year, but with a clear improvement in the last quarter compared to the previous three (-2.4% 1Q18, - 4% in 1S18 and -3.6% in 9M18).

   The slight decline in Revenues is mainly due to the drop in sales of copies (-4.6%). Advertising revenues fall by -1.9% in 2018, in a year that has evolved from less to more (4Q18: + 0.4%). Local advertising gains weight (56.3% of the total) and shows better behavior than the national one.

Likewise, digital advertising continues to gain weight in advertising revenues, especially in those of national origin. Including the income derived from digital e-commerce business models and accounted for within other revenues, the digital weight is 35.8%, with an increase of 3.8 percentage points at the end of 2017.

In response to the growing competition from large global online operators and with the aim of improving the profitability of the advertiser's investment, an agreement has been reached with Grupo PRISA and the Godó Group to create a programmatic advertising platform and jointly market part of the digital inventory In addition, in the Classifieds area, Autocasión (Vocento motor portal) has reached an agreement with Autoscout24 (European segment leader) to merge its businesses in Spain and develop a joint commercial policy that allows the generation of income synergies. Both measures, subject to the necessary administrative authorizations, are consistent with Vocento's strategic objective of increasing the weight of digital revenues.

Vocento has maintained its strict expense control policy during 2018. Comparable costs improve by 1.7%, excluding personnel adjustment measures and «one offs». By areas, the cut of the -23.3% in Audiovisual stands out, due to the exit of the perimeter of Veralia Content, and in Periodic, of -2.9%, by lower expenses of personnel and external services.

The comparable EBITDA totaled 46.4 million euros, 6.6% lower than last year, impacted by falling revenues newspaper to not make savings in fixed costs falling advertising revenues. However, EBITDA improved by 4.0% and reached 41.2 million.

The operating profit (EBIT) increased by 51% and stood at +26.9 million euros compared with 17.8 million in 2017, in addition to the factors already reflected impacted by the lower level of depreciation ( -6.9%) and the positive result for the disposal of fixed assets.

The financial differential improved by + 23.1% from -4.8 million euros in 2017 to -3.7 million in 2018. Its positive evolution is mainly explained by the reduction in average financial debt.

After the close of the year and with this positive net benefit, the Board of Directors has approved a dividend of 0.032 euros per share foreseen for this 2019.

The financial position of net debt as of December 31, 2018 stood at -43 million, which represents an improvement of + 23.4% compared to the end of 2017. The ratio Net Financial Debt / comparable EBITDA decreases from 1.1 times in 2017 to 0.9 times in 2018. The company during this time has generated +27.2 million euros of positive cash in its ordinary operations.

Results by business areas
In Periódicos , operating income stood at 326.6 million euros, 2.9% less than in 2017 as a result of lower revenues from sales of regional press copies. In the evolution of the diffusion in the regional press, there has been a slowdown in the annual fall in 2018 (-7.5%) compared to that of 2017 (-8.6%). The billing for advertising fell -3.2% compared to last year, with a different evolution between online advertising, which grows + 12.9%, and offline, which drops by -7.9%. The fact that ABC advertising sales grow + 2.3% in 2018 thanks to the digital boost (+ 22.2%) stands out. The weight of Newspapers in the group's EBITDA is lower every year in favor of other areas of growth and / or diversification, such as Classifieds or Gastronomy

Comparable EBITDA amounts to 43.2 million, with a decrease of -2.6% over 2017. The profitability of the area is maintained during 2018, with a comparable EBITDA margin of 13.2%. The measures in costs (-2.9% in 2018) compensate in part the decrease in revenues.

In Audiovisual , operating income reached 36.1 million, which is 19% less than last year. The fall is explained by the perimeter exit at the end of 2017 of the content producers and the lower activity in distribution. Comparable EBITDA stood at 12.3 million, with a 9% cut, while the comparable EBITDA margin improved to 34.1% compared to 30.3% in 2017.

In Classifieds , operating income amounted to 19.9 million euros (+ 7.6%) thanks to the good performance of advertising revenues in the area, which rose + 7.7%. Comparable EBITDA increased by + 36.9%, reaching 3.2 million euros, due to the growth of the real estate market of pisos.com and an improvement in the profitability of Autocasion.com in the motor sector.

In Gastronomy and others , operating revenues reached 6.4 million (compared to 74 thousand euros in 2017), after the Madrid Fusion Congress, Gastronomika San Sebastián and the incorporation of GSR. The comparable EBITDA is 838 thousand euros.