Vocento S A : Results 2021

Vocento, S.A. y Sociedades Dependientes

RESULTADOS ENERO-JUNIO 2019

26 de julio de 2019

Results for January-December 2021

28 FEBRUARY 2022

Vocento, S.A. and Subsidiaries

Results Report January - December 2021

INTRODUCTION: VOCENTO, THE ECONOMY AND THE ADVERTISING MARKET

In 2021 the smaller impact on the Spanish economy of Covid-19 was reflected in a partial recovery of activity from 2020 levels. According to the INE, GDP and household consumption increased by 7% in 2021 in nominal terms, after declines of 10.0% and 12% respectively in 2020. In an environment of partial economic recovery, the advertising market (excluding social media and search engines) expanded by 10% in 2021 after a contraction of 22.5% in 2020.

Performance of the Spanish economy and advertising market

Data in %

6%					5.8%							10%
4%				5.0%
												5%
							2.9%	2.0%
2%
							0.5%
0%													0%
										-3.0%		-5%
-2%
-4%				-10.1%
												-10%
-6%		-18.0%										-15%
-8%
-10%													-20%
-12%												-22.5%	-25%
2012	2013	2014	2015	2016	2017	2018	2019	2020
			Advertising market (Rh axis)			Nominal GDP (LH axis)		Household consumption (LH axis)

Source: i2p and INE. Note 1: advertising market ex social media and search engines.

The outlook for 2022 is for a recovery in activity to pre-pandemic levels. According to the Funcas panel, GDP will increase by 5.6% in 2022 (source: INE, including the price deflator), with an improving performance over the course of the year and a significant rise in prices (CPI 2022E 3.5%). Household consumption is forecast to grow by +5.3%. For advertising, the latest forecast from i2p is for an increase of +7% (excluding social media and search engines).

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Vocento, S.A. and Subsidiaries

Results Report January - December 2021

PERFORMANCE OF VOCENTO BUSINESSES

VOCENTO is a multimedia group, whose parent company is VOCENTO, S.A. It is dedicated to the various areas that comprise the media sector. For the organisation of management information, a number of business lines have been defined.

Reports to the market are based on this organization of information, which covers all the businesses in which VOCENTO is present, assigned to their respective business segments. From the start of 2022, the divested businesses of National DTT and Content no longer form part of the scope.

NEWSPAPERS (offline and online)

	REGIONALS	ABC	SUPPLEMENTS
 El Correo	 El Comercio	 ABC	 XL Semanal
 La Verdad	 Hoy	National printing	 Mujer Hoy
 El Diario Vasco	 La Rioja	plant	 Mujerhoy.com
 El Norte de Castilla	 Regional printing plants		 Women Now
 El Diario Montañés	Regional distribution		 Turium
 Ideal	(Beralán)		 Welife
 Sur	News agency (Colpisa)
 Las Provincias	Regional sales companies
	 Other regional companies

	AUDIOVISUAL			CLASSIFIEDS	GASTRONOMY &
DTT	RADIO	CONTENT		AGENCIES
 National DTT1	 Analog radio	 Veralia distribution1		 Pisos.com	 Madrid Fusión
- Net TV	licenses			 Sumauto	 Gastronomika
	 Digital radio			 Premium Leads	Mateo & Co
	licenses				 Tango
					 Pro Agency

Note 1: businesses divested during 1Q22.

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Vocento, S.A. and Subsidiaries

Results Report January - December 2021

IMPORTANT NOTE

To facilitate the analysis of financial information and understand the organic performance of the Company, it is always indicated in this report when operating expenses, EBITDA, the net result or financial debt are affected by non-recurring or extraordinary items, including adjustments to the workforce. Further details about these adjustments can be found in Appendix I at the end of this document: Alternative Performance Measures.

Furthermore, while as usual this report compares the information from 2021 with that of the prior year, in this report we have also included for comparative purposes data for 2019. We believe it more useful to compare the performance of 2021 with that of 2020.

In January 2022 the sale of 55% of NET TV and 100% of Veralia Distribución, agreed on 29 November 2021, was completed.

• Given the relevance of these assets in Vocento's scope, they have been categorised as
  Discontinued Operations in these consolidated financial statements in accordance with IFRS 5. Their contribution is contained exclusively in the Result after tax of discontinued operations, before the Net Result.
• To facilitate comparison with all the accounting data of previous years (income and expenses) and to provide an adequate explanation of the historic performance, the Results Report and Presentation contain consolidated pro forma 2021 accounts which include these figures for the discontinued businesses.
• Both documents also contain an accounting reconciliation between the consolidated 2021 accounts and the pro forma financial statements.

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Vocento, S.A. and Subsidiaries

Results Report January - December 2021

Main highlights of the financial performance of the businesses in 2021Target of return to 2019 EBITDA exceeded, double-digit net profit

Growth of revenues from digital and diversification

Perimeter optimized with the divestment of non-strategic assets High levels of cash generation and a differentiated debt position

• Recovery to profitability levels of 2019
• 1. The margin on readers (i.e. the margin on circulation revenues and digital subscriptions) increased by +4,673 thousand euros in 2021 vs. 2020 and by +3,907 thousand euros vs. 2019, despite a decrease in circulation.
  2. EBITDA in 2021 was 45,036 thousand euros, including the discontinued operations of national DTT and Content and exceeding the target of returning to the EBITDA level of 2019.
  3. The group reported positive net income of 13,620 thousand euros, an increase of +35,373 thousand euros from 2020. Adjusted for extraordinaries, net income was 9,909 thousand euros.
• Increased revenues from digital and diversification
• 1. The target of 100k digital subscribers was achieved in 2021, with total subscribers of 103k. The number of paying digital subscribers increased by +43% to 89k in December 2021, contributing to the digital margin.
  2. Digital revenues increased by +18.1% vs 2020 (+10.1% vs 2019) and revenues from diversification were up +85.4% vs 2020.
  3. In 2021 VOCENTO advertising increased by +4.8% vs 2020. The decrease was -12.4% vs. 2019, with an improving trend over the course of the year.
• Reduction of NFD, cash generation
• 1. Generation of ordinary cash flow of 32,479 thousand euros in 2021 vs. 12,893 thousand euros in 2020, with 72% of EBITDA converted to cash.
  2. NFD ex IFRS 16 falls to -1,721 thousand euros from -46,590 thousand euros in 2020. The divestments of the Diario Vasco headquarter and 45% of Izen cut net debt by 24,615 thousand euros.
  3. The low level of leverage offers significant capacity for new organic and non-organic investments: NFD/LTM EBITDA ex IFRS16 2021 0.04x, vs. 1.5x in December 2020.
• Targets set by the company for 2022-2026
• 1. Maintain the margin on readers at 2019 levels in the medium term.
  2. In 2026, more than 250k paying digital subscribers.
  3. The weight of digital and diversified revenues will be more than 60% in 2026.
  4. Annual free cash flow generation of 20 million euros or more on average.
  5. Shareholder remuneration returns with a pay-out of 40%.

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