Letter from the CEO

Against a positive economic backdrop for the media sector, although with some residual concerns about the sustainability of the recovery, Vocento has continued to progress in its strategy and in its transformation. We remain committed to the digital business, which we plan to accelerate, while also consolidating the leadership of our brands, the profitability of our business areas and the financial strength of our group, which differentiates us in the sector.

Our advertising revenues increased by a mid-single digital rate. Our comparable EBITDA margin expanded by 1.8 p.p. to 10.7%. All business areas reported positive EBIT. Finally, for the first time since 2009, the Group recorded a full-year net profit. In 2015, our activities were cash generating and our leverage ratio decreased to 2.2 times.

In 2015, Vocento’s newspaper area, covering both digital and print versions, remained the undisputed leader of the general information sector in both readership and circulation. In this segment we are leading the way in adopting new technologies and we are working on various fronts to accelerate our digital growth:

• Understanding user behaviour and managing the user experience, using Big Data technologies and data analytics;
• The development of digital vehicles and platforms for new consumer trends, especially in mobile. In 2015, the new mobile version of ABC was nominated at the Global Mobile Awards (GLOMO) 2016, in the category of Best Mobile App Media;
• The development of products and services which adapt to the new reality, generating new transactional/e-commerce business lines, optimizing our presence on social media and winning new audiences;
• Research and development supported by a new initiative, Vocento Media Lab. The aim here is to research, experiment and enable innovative trends such as data journalism and new digital narratives. The focus is also on the internal training of journalists and the creation of new dynamics for sharing knowledge between different technical, editorial and business teams in the company.

This strategy is having a very positive impact on two key groups in the digital space – our readers and our advertisers. In 2015, the advertising spend in the online press increased by 17%. The press has a major part to play in online advertising, although we should continue to combine offline and online campaigns. In 2015, of the 453 million euros of advertising for the sector, 41.6% went to the online press, up from 39.9% in 2014.

In 2016, we will continue to focus on strengthening our digital business and protecting our profitability. These are our two key priorities.

In the regional press, the power and leadership of our regional brands continue to support their business models. In 2015, we were again the number one regional press group in Spain. We have invested in maintaining the leadership and profitability off these assets, regardless of the device used to access them. In 2016, we will strengthen the digital performance of all our regional titles. We will also continue to invest in e-commerce initiatives, consolidate the “on+” pay platform at El Correo and develop new value-added services in advertising, aimed at local clients.

We developed similar initiatives at ABC in 2015. ABC has continued to increase its market share and its share of readership thanks to its strength in mobile. We redesigned ABC.es in 2015, launched a new mobile version and increased profitability by going all digital in the Balearic and Canary Islands and by optimising our print plants.

In our supplements and magazines area, we will continue to develop our area of events and special actions, as well as new digital initiatives, all while maintaining our leadership, investing in quality content and controlling our cost base. We recently came to an agreement with Grupo Zeta to distribute Mujer Hoy with El Periódico, creating synergies and making Spain’s most popular women’s magazine available in Catalonia.

In 2015, Vocento retained its presence in the niche television market with international partners who are world leaders in entertainment. This guarantees the future of NET TV in the medium and long term. During the year, the two channels maintained their performance at a time when new multiplex licences were awarded. Combined, our channels ended the year with audience share of 3.3%. Our thematic positioning on television contributes to the group’s overall profitability.

The year was also one of consolidation for our radio business. Our alliance with COPE continued to create value. According to the 3rd EGM survey, the station increased the number of listeners by around one million to 2,671,000. In 2016 we expect a similar strong performance.

We continued to be present in the audiovisual production sector via our subsidiary Veralia Corporación. In 2016, we will focus on increasing our levels of production and on recurrent programming in order to maintain our profitability, while also making the most of the arrival of new players on the scene as potential clients. Meanwhile, we will maximise the revenues of our film catalogue.

These are times of change for Vocento, times of transforming our businesses and of finding new ways to respond to today’s challenges. They are also times of opportunity. Never before have we had such a capability of tracking user trends and behaviour. Of course, new technologies can also create uncertainty about the road ahead. At Vocento, we believe that we have marked out a clear way to follow. The results so far confirm that we have the right strategy in place. We will continue to make progress in our sales strategies, to increase our market share, develop our circulation and accelerate our digital business, ensuring that we will remain strong leaders in the future.

Luis Enríquez