Atresmedia Corporación de Medios de Comunicación, S.A. (A3M) Earnings Call Transcript & Summary

Hi, good afternoon. Welcome to this conference call in which we have presented the first 6 months remarks for year 2022. As usual, we -- the conference call will be hosted by Silvio González, Executive Vice President of the company; and Fernando Costi, CFO. As usual, Silvio will go into the highlights of the period, and then we'll answer all your questions you may have. Without further delay, I hand over to Silvio.

Good morning. Let's begin with the highlights of this period, this first half of the year. Despite the difficult economical framework. I think that Atresmedia has booked to be quite resilient. And I think that the figures we are presenting are, let's say, satisfactory Talking about the market, the advertising market, the performance has been different when you split between radio and digital and television. In the radio and digital market, I think the performance has been quite good because, I mean, the growth has been 9% for digital -- for radio and 3% for digital. So let's say, these 2 markets has performed quite good. Television market has not done that well. TV has been -- the market decreased by 5% in this first half of the year. So a difficult performance in the different markets. Talking about the product, the audience, I think this has been a very good year for -- a very good period for the group. The audience for the group, total audience for the group has been 27.9% audience share which means an increase of 0.3 percentage points versus first half of '21. And we have lead prime time slot in total individuals with 28%. We have been best-in-class with both metrics. Talking about the channel Antena 3, the audience share has been 14% in total individuals, which is the best rating for semesters since 2009. And we have also led the prime time with 14.9%. It also remains the most new challenge in Spain for the last 3 quarters. So Antena 3 is having a very good year in terms of audience in clearly in this year. Now talking about laSexta, the share for the channel has been 6.5% in total individual and 7.8% in commercial target. In both cases, laSexta is well ahead of its main competitors with the channel quarter. And the accumulated audience for the rest of the channels has been 7.4%, which means an increase also comparing with the same period of 2021. But I mean this has been accompanied by the price antena -- Atresmedia TV's price has been up 3% compared with last year. So it means that the audience and the excellent position in terms of the commercial audience has allowed us to increase our price by 3%. In the digital world, we consolidate our leadership among all the other others players because we have had unique users at an average of 26.5 million in the second quarter -- and talking about our SVOD offer, ATRESplayer Premium, we have reached more than 412,000 subscribers by the end of June. So I think that -- as I said in the very beginning, despite the economical environment, I think we are doing quite, quite well. Let's go to the figures. The total revenue for the group has been EUR 460 million, which means a slight decrease on a year-on-year basis. And regarding audiovisual, the total revenues has been EUR 429 million, which means a decrease of 1.7% on a year-on-year basis also. The Atresmedia Television market share has been nearly roughly 43% according to our estimations, which means an improvement for nearly 1 point compared with the first quarter of 2021, which has drove our TV net arbitration revenue to EUR 346 million, which means a decrease of 3%. That -- this also means that we have outperformed the market by 2 points. On digital world, the net advertisement revenue for our digital activities has been EUR 35 million, which means an increase of 10.7%, which means that we have also outperformed the market by more than 7 points driven by the AVOD and especially by the connected TV business. The content production and distribution division has reached EUR 28 million, with a slight decrease of 13.5%, which is due to the lowering content sales compared with the same period last year. And this is because you know that we have launched our ATRESplayer premium on a strong way, we are balancing which part of the content we sell and which part of the content we exploit in the SVOD platforms. In the other division, the revenues grew by 27%, up to an amount of EUR 20 million, which means that we are returning back to normal activities that we had before the pandemic, and we are talking especially in all these outdoor events, which is the raises and all this thing that needs to are linked to theaters and cinemas and all that. So we are going back to the old times. Talking about the radio activities, the total net advertising revenues has been EUR 35 million, which is an increase of 6.3%. OpEx has been EUR 372 million, which means that it's flat, nearly flat compared with the same period last year, and then this is mainly driven by savings in overheads. The EBITDA for the period has been EUR 88 million, which means that a slight decrease of 3.1% compared with first quarter -- first half 2021 which implies that the EBITDA margin has been 19%. The net profit has been EUR 57 million with a decrease of 8.5%. In terms of net debt, I mean in a like-to-like basis now is EUR 41 million, which is mainly -- due mainly explained by the impact of the complementary dividend that we paid in June in a total amount of EUR 54 million. Well, we will also try to give you some light of what's going to happen in the second half of the year. And I must realize and say that it's more and more difficult to give any light of us going on in the future. It's clear that if you remember, we thought that the market -- the advertising market will grow to 4% to 5% for the whole 2022 years -- year. I think we are far away for -- from that. But I'm not brave enough to give you a figure for the full year. Why that? Because I mean, it is true that the market in television has been below what we expected because it's even being more negative than 5% negative compared with 2021. And so the second part of the year, we have mixed feelings. On one side, we do think that why the market should be better than it has been in the first half of the year. But on the other hand, we think that, well, there are sectors that we think that will recover, finance, telcos, in part due to the world -- to the football world, football champion that it should push the market a little bit further. So I think that there are hints in both ways, negative ways because I mean the first part of the year has been a bad year for us. But there are some signs that we do think that the second half of the year should be better than the 1 we have [indiscernible] I'd say I'm not I cannot give you any other hint because I mean, everything is a lot of uncertainty, a lot of different news in different sites, so difficult to say. That's what we think that the second half of the year should be better than when we have suffered in the first half of the year. We do think that radio and digital would perform as it has been in this first 6 months. So we expect them to perform in a strong way. There is no problem over there. On the OpEx side, we will adjust cost as much as possible in order to maintain the margins we obtained in 2021. We have proved that we are able to do that, and we will be able to do that in the future. And on the debt side, I think that we will end the year with a debt of roughly EUR 50 million to EUR 60 million , assuming the dividend payment as we already do. So a lot of clouds in the future, but I think there are also some rates that we do think it's happened. And well, let's see. But I think that we have proved to be able to sell any C that we face, and that's what we will do in the in the future. So let's say, we are not pessimistic, not optimistic, we are neutral. And -- but I think that we will -- we could maintain the margins and all in all, I think it will be a good year for Atresmedia. And that's all my part. Thank you.

Thank you, Silvio. We will move into the Q&A portion, please.

[Operator Instructions]. The first question comes from Fernando Cordero from Banco Santander.

Just on the outlook that you have already described that I shared the uncertainty. In that sense, I only want to discuss which extent do you foresee flexibility on your cost base in order to manage the different scenarios that can be seen in the second half.

Well, I think there are still some room we can use in order to adjust to the -- to whatever revenue -- whatever market we can face. So I am not -- I mean, we can handle that. I think that there is some flexibility in the cost side in order to adjust. So I'm not -- we are not concerned about that. I mean our concern is what's going on with the market in the future, more than how can we adjust in the cost because, I mean, we could handle that.

Next question comes from Germán García from JB Capital.

Regarding the overall market, could you please elaborate what was the performance of the TV ad market during the month of June and with -- together with what's happened in the month of July? What's been the register of the market so far?

Yes. I mean June, the market has been negative by 9%. And July, we are foreseeing a market negative by something like 10%. It's also true that both in June and July, you have reduced -- I mean you have to take in considers that there was the euro cap. So in a like-to-like basis, let's say July will be down by 5%, something like that. If you take out all the advertising driven by the Eurocup Championship and in June, there was something the market would have been down in a like-for-like basis, something like 4%. And we have outperformed the market. because, I mean, with the market which has been in July, it looks to be something like 10 -- minus 10% will be something like minus 6%, minus 5%. So we are outperforming the market even in this circumstances.

We move to the next question, please.

[Operator Instructions]. Your next question comes from Sarah Simon from Berenberg.

Yes. Sorry. This is a rather annoying question to answer. Someone just called me I missed what you said the second half improving. Can you just run us through briefly why you think it gets better?

Well, yes, I do think that -- I mean I began saying that there's a lot of uncertainty, and it's difficult to say anything about the future. But what we do think is that -- the second half of the year, there will be some effects coming from the World -- Football World Championship, and there will be some sectors that now they are performing quite bad like automobiles, finance and telcos. And that's why we do think that mainly the last quarter of the year will be better than expected. So that's why we say the second half of the year will look better than the first half has done. But I mean, it's just because we think that the football championship will push a little bit the market in that way. That's it.

And do you have any indication from those 3 sectors in names that they are going to start spending more aggressively?

No. But we don't have any indication on the other side. It's a long time ago.

Thank you, Sarah. We move to the next question, please.

[Operator Instructions]. There are no further questions. I now give back the floor to the speakers.

Well, thank you very much all if you have any other questions, contact the Investor Relations department. I wish all you a very good summer rate we talk next time to full year results. Thank you very much. Bye.