Earnings Release • Mar 17, 2022
Earnings Release
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Head Office: Rua Manuel Pinto de Azevedo, 818 – Porto Fiscal Number 502 293 225 Share Capital: 25,641,459 Euro
Financial Information - 2021 (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.
The year 2021 was marked by the COVID-19 pandemic, with the impacts in social and economic terms resulting from restrictions and confinement, which marked in particular the beginning of the year, when the population was not yet vaccinated and there was a strong wave of the disease.
Despite this framework, Cofina Group witnessed a recovery in activity compared to 2020, with an impact essentially on the evolution of the advertising market, with Cofina managing to capture an important part of this growth, developing new advertising formats and investing in the digital aspect, through of the brands that generally lead in their respective segments.
Internally, the Group maintained its search for efficiency, framed by the prospects for the sector's evolution and the negative effects caused by the pandemic. In this way, the strategies for each brand were dynamically adjusted, considering the most appropriate size and format, cover price, editorial strategy, among others. At the same time, a restructuring plan was implemented with the aim of achieving an even more agile company, prepared to face future challenges.
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).
| 2021 | 2020 | Var (%) 2021/2020 |
|
|---|---|---|---|
| (thousand Euro) | |||
| Operational Revenues (a) | 75,849 | 71,444 | 6.2% |
| Circulation | 32,324 | 33,276 | -2.9% |
| Advertising | 26,812 | 22,208 | 20.7% |
| Alternative marketing products and others | 16,713 | 15,960 | 4.7% |
| Revenues by segment | 75,849 | 71,444 | 6.2% |
| Press | 58,390 | 55,911 | 4.4% |
| TV | 17,459 | 15,533 | 12.4% |
| Operational costs (b) | (61,077) | (59,509) | 2.6% |
| Operational EBITDA (c) | 14,772 | 11,935 | 23.8% |
| EBITDA margin (d) | 19.5% | 16.7% | +2.8 p.p. |
| Press | 9,854 | 7,220 | 36.5% |
| EBITDA margin Press (e) | 16.9% | 12.9% | +4.0 p.p. |
| TV | 4,918 | 4,715 | 4.3% |
| EBITDA margin TV (f) | 28.2% | 30.4% | -2.2 p.p. |
| Goodwill impairment | (914) | (1,894) | -51.7% |
| EBITDA (g) | 13,858 | 10,041 | 38.0% |
| Amortizations and depreciations | (3,488) | (3,414) | 2.2% |
| EBIT (h) | 10,370 | 6,627 | 56.5% |
| EBIT margin (i) | 13.7% | 9.3% | -4.4 p.p. |
| Financial results (j) | (3,194) | (2,944) | 8.5% |
| Profit before income tax | 7,176 | 3,683 | 94.8% |
| Income taxes | (2,951) | (2,094) | 40.9% |
| Consolidated net profit | 4,225 | 1,589 | 165.9% |
(a) Operational Revenues = Sales + Services rendered + Other income 0 0
(b) Operational costs = Cost of sales + External supplies and services + Payroll expenses + Provisions and impairment losses (excluding Goodwill impairment) + Other expenses
(c) Operational EBITDA = Operational Revenues - Operational Costs
(d) EBITDA Margin = Operational EBITDA / Operational Revenues
(e) EBITDA Press Margin = Operational EBITDA Press / Revenues by Segment Press
(f) EBITDA TV Margin = Operational EBITDA TV / Revenues by TV Segment
(g) EBITDA = Operational EBITDA - Goodwill Impairment
(h) EBIT = EBITDA - Amortizations and depreciations
(i) EBIT Margin = EBIT / Operational Revenues
(j) Financial results = Results related to associated companies and joint ventures + Financial income - Financial expenses
Cofina's total revenues amounted to 75.8 million Euros, which corresponds to a 6.2% increase in relation to the previous year. Advertising revenues increased by 20.7% and alternative marketing revenues increased by 4.7%, with circulation revenues decreasing by 2.9%.
As at 31 December 2021, operating costs include non-recurring costs of approximately 1.8 million Euros, resulting from indemnities from the implementation of the Group's restructuring plan.
During the period under review, the Group recorded goodwill impairment in the amount of approximately 0.9 million Euros.
The Group's EBITDA, excluding goodwill impairment, was approximately 14.8 million Euros (+23.8%). Considering the impairment of Goodwill, EBITDA amounts to 13.9 million Euros (+38.0%).
Consolidated net profit reached 4.2 million Euro, a 165.9% increase over the previous year.
On 31 December 2021, Cofina's nominal net debt1 was 33.9 million Euro, which corresponds to approximately a 6.2 million Euro decrease, comparatively to the nominal net debt recorded in 31 December 2020, which was 40.1 million Euro.
Free Cash Flow (FCF) (considering the reduction of net debt) yield of 2021 (FCF/market capitalization), based on the stock price as of 31 December 2021, amounted to 25.8%.
The arbitration request brought by Promotora de Informaciones, S.A. ("Prisa") on 15 April 2020, has been running terms since then. Importantly, in the 2021 financial year, Cofina presented the impugnment to the initial petition presented by Prisa.
Regarding the Tender Offer, as announced by Cofina to the market on 20 July 2021, it was revoked on that date, with immediate effect, following the launch of a competing Tender Offer by Pluris Investments, S.A.. Hence, Media Capital Tender Offer chapter is definitively closed.
1 Nominal net debt: Other loans (nominal values) + Bank loans (nominal values) – Cash and cash equivalents
Cofina's TV segment consists of CMTV channel, the only generalist channel operating exclusively in the cable network.
| (thousand Euro) | 2021 | 2020 | Var (%) 2021/2020 |
|---|---|---|---|
| Operational Revenues (a) | 17,459 | 15,533 | 12.4% |
| Operational Costs (b) | (12,541) | (10,818) | 15.9% |
| Operational EBITDA TV (c) | 4,918 | 4,715 | 4.3% |
| EBITDA Margin (d) | 28.2% | 30.4% | -2.2 p.p. |
(a) Operational Revenues = Sales + Services rendered + Other income
(b) Operational costs = Cost of sales + External supplies and services + Payroll expenses
(c) Operational EBITDA TV = Operational Revenues - Operational Costs
(d) EBITDA Margin = Operational EBITDA TV / TV Operational Revenues
CMTV total revenues reached to approximately 17.5 million Euro, which represents a 12.4% increase.
EBITDA TV recorded was around 4.9 million Euro, which represents a 4.3% increase when compared to the previous year.
In 2021, CMTV recorded a share of 4.35%, being the fourth channel, most seen in Portugal.
Cofina's press segment includes daily newspapers Correio da Manhã, Record and Jornal de Negócios, the magazines Sábado and TV Guia and the respective websites, as well as the area BOOST (Events, Activation and Publishing).
| (thousand Euro) | 2021 | 2020 | Var (%) 2021/2020 |
|---|---|---|---|
| Operational revenues (a) | 58,390 | 55,911 | 4.4% |
| Circulation | 32,324 | 33,276 | -2.9% |
| Advertising | 17,534 | 15,172 | 15.6% |
| Alternative marketing products and others | 8,532 | 7,463 | 14.3% |
| Operational costs (b) | (48,536) | (48,691) | -0.3% |
| Operational EBITDA Press (c) | 9,854 | 7,220 | 36.5% |
| EBITDA margin (d) | 16.9% | 12.9% | +4.0 p.p. |
(a) Operational Revenues = Sales + Services rendered + Other income
(b) Operational costs = Cost of sales + External supplies and services + Payroll expenses
(c) Operational EBITDA Press = Operational Revenues - Operational Costs
(d) EBITDA Margin = Operational EBITDA Press / Press Revenues
During 2021, total revenues of Press segment were 58.4 million Euro, representing a 4.4% increase over the same period of the previous year. Circulation revenues recorded a 2.9% decrease and advertising revenues increased 15.6%. Revenues from alternative marketing products and others recorded a 14.3% increase.
Operational costs were 48.5 million Euro, recording a slight decrease 0.3% over the previous year, which allowed EBITDA of this segment to record a 36.5% increase, amounting to 9.8 million Euro.
Following the excellent results achieved in 2021 in the advertising market, Cofina will continue to focus on the development of new advertising formats, maximizing the combined potential of the various brands and segments.
On the other hand, Cofina's management team will continue to answer quickly and efficiently to the challenges of innovation and the dynamics of the sector.
At the same time, Cofina Group intends to actively analyze new growth opportunities.
Oporto, March 17, 2022
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