Cofina SGPS S A : 2020 year end results

COFINA, SGPS, S.A.

Public Company

Head Office: Rua Manuel Pinto de Azevedo, 818 - Porto

Fiscal Number 502 293 225

Share Capital: 25,641,459 Euro

Financial Information - FY2020

(unaudited)

This document is a translation of a document originally issued in Portuguese, prepared using accounting policies consistent with the International Financial Reporting Standards adopted in European Union (IFRS-EU), some of which may not conform or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.

2020 Financial Information

COVID-19

The year 2020 was marked by the emergence of a global epidemic called COVID-19, and on March 11, 2020 the World Health Organization declared it a pandemic. In Portugal, a state of emergency was declared, which was in force from the 19th of March until the 2nd of May 2020 and from the 6th of November until the end of the year.

Since the beginning of the pandemic, Cofina has been assessing and monitoring the pandemic's developments, in terms of the risk factors that, in its understanding, are relevant and which may affect the business areas, whether in operational, investment or financial terms. Cofina, from an early stage, implemented a set of measures for the prevention, control and surveillance, with prevention / contingency plans being developed that cover the entire organisation.

Ensuring the permanent well-being of all Employees, their families and the community, has always been and will continue to be a priority for Cofina. The Group, together with the human resources department, implemented a series of increased preventive actions to protect the health and safety of its Employees, based on the recommendations of the Portuguese Health Authority to face the pandemic. This plan has been continuously adjusted considering the evolution of the pandemic, being essential for the purpose of containing the impacts of the pandemic between our employees and the local community.

As a result of the various measures implemented, during the 2020 financial year, there was a negative impact on the income statement in the amount of approximately 130 thousand Euro (including protective equipment expenses, among others).

Cofina has been implementing, during the last years, a plan which aims to prepare the Group for the future reality, ensuring its sustainability and adequate profitability levels. In order to manage the impacts of the pandemic, the Group implemented cost containment measures, of which stand out, the review of the product printing (i.e. number of printed copies), the reduction of the number of pages, the reduction of editorial costs, the reduction of marketing actions, the temporary distribution stoppage of Destak (free newspaper) and the implementation of measures to contain other costs (not related to the protection of our Employees). We understand that these actions will be reflected in cost reduction and contribute to mitigate the impacts on the activity from the pandemic.

With regard to liquidity risk management, it is Cofina's understanding that the financing contracts established, as well as the relevant historical activity with the financial institutions with which it has a long-lasting relationship with no history of default, allow the Group to manage any additional needs for funds to maintain the activity in this period of uncertainty. As of December 31, 2020, the amount of consolidated credit lines available (namely pledged current accounts, bank overdrafts and cash

poolings) in the amount of approximately 15.1 million Euro. Additionally, the Group presents Cash and cash equivalents amounting to, approximately, 15.3 million Euro.

Consolidated net profit of 2020

The financial information was prepared in accordance with the recognition and measurement principles of the International Financial Reporting Standards, as adopted by the European Union (IFRS-EU).

(thousand Euro)	Recurring costs	Non-recurring costs	Goodwill impairment	Total
2020	2019	Var (%) 2020/2019	2020	2020	2020	2019	Var (%) 2020/2019
Operational revenues (a) Circulation Advertising Alternative marketing products and others Revenues by segment Press TV	71,444	88,024	-19%	71,444	88,024	-19%
33,276	41,969	-21%	33,276	41,969	-21%
22,208	27,563	-19%	22,208	27,563	-19%
15,960 71,444 55,911 15,533	18,492 88,024 73,195 14,829	-14%	15,960 71,444 55,911 15,533	18,492 88,024 73,195 14,829	-14%
-19%	-19%
-24%	-24%
5%	5%
Operational costs (b)	(57,548)	(71,252)	-19%	(1,961)	(1,894)	(61,403)	(71,252)	-14%
EBITDA (c)	13,896	16,772	-17%	(1,961)	(1,894)	10,041	16,772	-40%
EBITDA margin (d) Press EBITDA margin Press (e) TV EBITDA margin TV (f)	19.5% 9,181 16.4% 4,715 30.4%	19.1% 12,789 17.5% 3,983 26.9%	+0.4 p.p.	14.1% 9,181 16.4% 4,715 30.4%	19.1% 12,789 17.5% 3,983 26.9%	-5.0 p.p.
-28%	-28%
-1.1 p.p.	-1.1 p.p.
18%	18%
+3.5 p.p.	+3.5 p.p.
Amortizations and depreciations	(3,414)	(3,594)	-5%	-	-	(3,414)	(3,594)	-5%
EBIT (g) EBIT margin (h)	10,482 14.7%	13,178 15.0%	-20% -0.3 p.p.	(1,961)	(1,894)	6,627 9.3%	13,178 15.0%	-50% -5.7 p.p.
Financial results (i)	(2,366)	(2,722)	-13%	(578)	-	(2,944)	(2,722)	8%
Profit / (Loss) before income tax	8,116	10,456	-22%	(2,539)	(1,894)	3,683	10,456	-65%
Income taxes	(2,627)	(3,306)	-21%	533	-	(2,094)	(3,306)	-37%
Consolidated net profit	5,489	7,150	-23%	(2,006)	(1,894)	1,589	7,150	-78%

• (a) Operational Revenues = Sales + Services rendered + Other income

• (b) Operational costs = Cost of sales + External supplies and services + Payroll expenses + Provisions and impairment losses + Other expenses

• (c) EBITDA = Operational revenues - Operational costs

• (d) EBITDA margin = EBITDA / Operational revenues

• (e) EBITDA Press margin = EBITDA Press / Revenues by Segment Press

• (f) EBITDA TV margin = EBITDA TV / Revenues by Segment TV

• (g) EBIT = EBITDA - Amortizations and depreciations

• (h) EBIT margin = EBIT / Operational revenues

• (i) Financial results = Results related to associated companies and joint ventures + Financial income - Financial expenses

In annual terms, Cofina's total revenues amounted to 71.4 million Euro, which corresponds to a decrease of 18.8% when compared to the same period of 2019. Circulation revenues and Advertising revenues recorded a 20.7% and 19.4% decrease, respectively. Revenues from Alternative marketing products and others recorded a 13.7% decrease.

During the period under analysis, a number of non-recurring costs were recorded, mostly associated with transaction costs of the acquisition of the share capital of Grupo Média Capital, SGPS, S.A. by Cofina, SGPS, S.A., which amounted to 2 million Euro. The Group recorded a Goodwill impairment of approximately 1.9 million Euro.

The Group's EBITDA excluding non-recurring costs and Goodwill impairment was approximately 13.9 Million Euro (-17%). EBITDA recorded in 2020, including non-recurring costs and Goodwill impairment was 10.0 Million Euro (-40%).