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In 2015, the Spanish economy consolidated its recovery with GDP rising by 3.2% despite a slowdown at the end of the year. The improvement in the economy and above all in household consumption led to a 5.8% expansion in the advertising market. The performance was unequal, with Internet advertising revenues rising by 12.3% and press advertising expanding by 0.5%.
For 2016, a slowdown is expected in the pace of economic growth and in advertising spend, with experts forecasting an expansion of the market of around 5%. There are down-side risks to the economic outlook, especially the risk of any extended political uncertainty impacting the confidence of businesses, households and investors.
For Vocento, 2015 was a positive year, a year in which we began to reap the benefits of the strategy we have been implementing in previous years. That strategy has been designed to consolidate our leading brands, confirm our com-mitment to profitability and sharpen our focus on generating cash. Likewise, we have continued to reinforce our leadership of the general press sector in terms of both readership and circulation and in the digital sector we have made significant progress, all while maintaining our position in other business areas such as audiovisual and classifieds.
In 2015, Vocento’s revenues reached 467.6 million euros. Advertising revenues grew by 5.5% to 166.6 million euros, in line with the market despite our higher exposure to the press sector. Advertising spend is rising both online and offline and the profile of our revenues is evolving towards digital (Internet and new digital businesses), which contributed 28.0% of all our advertising and e-commerce revenues.
Furthermore, we improved our EBITDA by a significant amount (up 26.8% to 47.6 million euros) with our compa-rable EBITDA margin expanded by 1.8 p.p. to 10.7%, even with the divestment of Sarenet. In the newspapers business, comparable EBITDA increased by 11.8%, led by an improvement in profitability at the regional press and ABC. In the audiovisual area, a higher margin (a comparable EBITDA margin of 26.7%) was the result from the absence of any DTT provisions in the year and offset the lower level of activity in content production. In our Classifieds business, which is growing rapidly, our advertising revenues and our profitability both increased.
In 2015, Vocento recorded positive EBIT in all areas (up 101.9% to 27 million euros). Net profit reached 4 million euros; the Group’s first full-year net profit since 2009.
We also complied with another strategic target – cash generation. Cash flows from the ordinary business increased by 27 million euros, excluding extraordinary outflows. As a result, we reduced our leverage ratio to 2.2x from 2.9x at the end of 2014.
In 2015, we reinforced our leadership of the general press sector with market share of 24.8%, more than 10 p.p. more than the second player. We were also readership leaders, with more than 2.5 million readers, while on the Internet we have more than 18 million unique monthly users.
Vocento’s regional newspapers continue to be leaders in circulation, with market share in 2015 of 24.7%, above the number two regional press publisher on 15.3%.
Another highlight in the year was the performance of our flagship publication ABC. The daily newspaper increased its market share in the key Madrid market and is winning new readers thanks to the strength of its mobile offering.
Our supplements and magazines are leaders in Spain in terms of readership and increased their share of the advertising market, thanks to continued investment in the product, which is attracting both readers and advertisers.
In 2015 we remained very active on the technological front. We are pioneers in new technologies and in research and development, as well as investing in the internal infrastructure we need for the future.
In the audiovisual sector we maintained our position, with a national DTT licence enabling us to broadcast two channels, alongside regional DTT licences, a network of radio licences, stakes in content producers and a film catalogue.
With every passing year Vocento becomes more of a multimedia company. Our revenues and sales strategies are increasingly diversified, we have launched new online products and content that build on new technologies and strategic partnerships.
In 2016 we will accelerate our digital growth and transformation. We are focusing on three lines of work:
The information industry will be better and more profitable if we continue to invest in high quality content, segmented to meet the needs and tastes of our users. The increased consumption of news on mobile devices, along with new abilities to improve our understanding of our readers, represents an opportunity for the Group. We will be able to improve our delivery of the content they want and to develop digital products, platforms and vehicles that reflect today’s habits, opening up new audiences and new complementary business models for Vocento.
The strategy adopted by Vocento in recent years, supported in 2015 by a solid economic background, has enabled us to strengthen our business. On the foundations of these results we will continue to improve. I am sure that with the support and commitment of our shareholders, advertisers, suppliers and employees we will all share in continued growth at Vocento in the future.
Santiago Bergareche Busquet
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