Prisa, the publishing group of EL PAÍS, announced this Tuesday a three-year strategic plan that is committed to the growth of its two businesses, Prisa Media and Santillana.
The objective is to reach between 950 and 1,050 million revenues in 2025, with an accumulated annual growth of 8% to 9%, according to a presentation of the company registered with the National Securities Market Commission (CNMV).
Prisa expects its gross operating profit (ebitda) to multiply by 3.5, going from 63 million euros in 2021 to more than 220 million at the end of the period.
The strategic plan contemplates that EL PAÍS increase its number of subscribers by going from the 177,000 with which it closed 2021 to exceed 400,000 in 2025.
The president of Prisa, Joseph Oughourlian, who presented the plan to the press together with the main executives of PRISA, stated: "After the restructuring measures approved in 2021 and the flexibility provided by the recent refinancing agreement, it is the time to look to the future, rely on the stability achieved both financially and in management, and focus on growing”.
Among the axes of the new strategic plan is the promotion of the digital business, which will account for more than half of the income, and the greater contribution of the markets of Latin America and the United States.
“We have all the strength put into the development of our two businesses, which will continue under the perimeter of Prisa, and in the promotion of our brands, already leaders in most of the markets where we are present.
It is time to look to the future with ambition”, added Oughourlian.
In a press conference, the president of Prisa has indicated that, after the refinancing agreement recently reached with creditors, the group will be able to focus on executing the strategic plan to assert its assets, for which reason it does not plan to undertake operations outside of that plan such as the sale of assets, capital increases or IPOs.
Nor will it undertake a division (
split
) of the Media and Education businesses into two completely different companies, because it would not be easy to execute given the group's level of debt.
Regarding Vivendi's announcement of its interest in increasing its stake in Prisa, the manager has indicated that the French group has not communicated its specific plans, although he specified that in its communication to the CNMV it has only indicated that it had planned to exceed 10%. of the capital and not exceed 30%, a limit from which it would have to launch a takeover bid for the entirety, but which has not revealed the participation it intends to achieve.
With harsh words, the president of Prisa has shown himself to journalists to be very critical of the group's managers for the 15 years prior to his arrival as president.
Oughourlian has reproached them for not having been able to solve the debt problem and also for their remuneration being barely linked to the results or the evolution of the company.
He has said that for 15 years managers have given the "spectacle" of "always failing" and "taking a lot of money."
He has claimed that the situation was "dramatic" when he was appointed president just over a year ago.
"What struck me the most when I joined this company was the abysmal difference between the quality of the brands and the workforce, and the mediocrity, to say the least, of the
management,"
he said.
Forecasts
According to the forecasts of the strategic plan, the contribution of income from Latin America will go from 56% to 59% in 2025, and that of the United States will quadruple, jumping from 1% to 4% in that period.
For its part, digital revenues will go from representing 30% to 52% of that total, which will be between 950 and 1,050 million in 2025, according to the plan, which is committed to organic growth, digital transformation and the generation of innovative new content.
Prisa also foresees a strong increase in profitability that will allow ebitda margins to be between 22% and 25% in 2025, even exceeding pre-pandemic levels.
With this, the published EBITDA will be in those more than 220 million, compared to 63 million in 2021. If the comparison is made with the adjusted EBITDA, it would go from 107 million in 2021 to more than 230 million in 2025. That is to say would more than double.
According to the company, the cost control initiatives will allow Prisa to keep the growth of expenses below inflation.
This cost control, operational improvement and working capital management will make it possible to accelerate the generation of available cash which, according to the plan, will exceed 100 million in 2025, with a total of some 300 million accumulated in the four years of the plan (2022- 2025).
The group expects net debt to be less than three times gross operating profit by 2025, and sets the long-term target at 2.5 times.
The financial director, David Mesonero, explains in the presentation the cost savings implied by the recent refinancing and the absence of maturities until 2026-2027.
digital subscribers
By business, Prisa Media forecasts revenue of between 450 and 500 million euros in 2025, compared to 383 million in 2021, with advertising as the main source of income.
The strategic plan contemplates three levers of growth: the commitment to digital business, geographic expansion and increased profitability.
As for the digital business, the plan contemplates that its contribution to Prisa Media's billing goes from 24% to 41%, which implies more than doubling the income through this channel.
In the case of EL PAÍS, the strategic plan foresees that it will go from the 177,000 subscribers with which it closed 2021 to between 400,000 and 450,000 in 2025, which means multiplying the number by more than 2.5 times in four years.
The president of Prisa Media, Carlos Núñez, highlighted in the presentation to analysts the 25% share that EL PAÍS has among digital subscribers to newspapers.
Oughourlian has admitted that exceeding 400,000 digital subscribers for the newspaper EL PAÍS, as foreseen in the plan in 2025, is "an ambitious goal".
“But we are convinced that people are going to return to journalism because with issues like covid or Ukraine, people want to find out the truth, and there are few newspapers that have the quality of EL PAÍS with its 400 journalists,” he added.
The plan includes a firm commitment to business expansion in Latin America and the United States, with a renewed drive to consolidate EL PAÍS as the leading global newspaper in the Spanish-speaking world.
That, together with the strength of the group's media in the region, will allow America to go from contributing the current 19% to 25% of Media revenues.
Colombia will go from 11% to 12%;
Chile will maintain its 5%, and the United States and the rest will go from 3% to 8% of total income.
The weight of Spain will thus remain at 75%.
The EBITDA of Prisa Media as a whole will go from the current 42 million to more than 90 million in 2025. Not only will the increase in income contribute to this, but also the improvement in profitability thanks to cost efficiency, which will practically double the ebitda margin, from 11% to more than 20%.
The reorganization carried out, the strict cost control policy, the digital transformation and the creation of cross-cutting platforms that provide greater efficiency, flexibility and agility will contribute to PRISA Media's overhead costs over total revenues falling from 22 % to 17% and that the costs of personnel and collaborators drop from 51% to 41%.
The group highlights the firm commitment to audio and video, with the creation of two directions and innovation in formats.
Prisa will also continue to diversify its business with the generation of innovative, high-quality content both for the group's media and for third parties.
Prisa Video has integrated Lacoproducer to strengthen this area and Prisa Audio has become in less than a year the world's leading producer of audio in Spanish.
the business of education
As for the education business, Santillana, the leading platform in Latin America, forecasts estimated revenues between 450 and 550 million in 2025, compared to 350 million last year, with an EBITDA margin of over 26% and more than 130 million EBITDA, as explained in the presentation by its first executive, Francisco Cuadrado.
The growth will be driven especially by the private education business, which already represents 70% of total income and will account for between 340 and 400 million in turnover in 2025, for 110-150 million from the public business.
The group expects a strong expansion of subscription models in the coming years.
Santillana is already a leader in the region in this segment thanks to its teaching systems and new platforms, as well as advisory services for schools and families.
The strategic plan contemplates going from the nearly two million students in digital subscription models that it now has to 3.4 million in 2025.
Sustainability and governance
The strategic plan presented by Prisa redoubles its commitment to corporate governance and sustainability, according to the group, which has recently announced the creation of a Sustainability Commission within the board of directors.
The company has set 11 ESG criteria (environmental, social and governance, according to its acronym in English) as priorities that promote the development of the five sustainable development goals (SDG) in which Prisa considers that it has a greater impact through your activity.
These are the goals of high-quality education, gender equality, decent work and economic growth, climate action and peace, justice and strong institutions, that is, SDGs numbers 4, 5, 8, 13 and 16, according to included in the presentation to analysts.
PRISA joined the UN Global Compact initiative, the largest global network on sustainability, more than 10 years ago.
Since 2013 it is also a member of the Spanish network of the Global Compact, the largest voluntary social responsibility initiative in the world.