Telecinco: the most profitable media in Spain

It closes the first semester with a net profit of 62.2 million euros. The chain, which has strongly reduced its costs (-17.7%) compared to the first half of 2008, has achieved an adjusted EBITDA of 98.10 million euros (30.5% margin on net income) and an EBIT of 93.89 million (29.3% on net income).

In the current economic context, Telecinco has closed the semester with 62.2 million euros of net profit, positioning itself as the most profitable media outlet in Spain. The management policy outlined by Telecinco has allowed the chain to close the first part of 2009 positively, marked by the economic crisis and the collapse of advertising investment.

Between January and June 2009, Telecinco has reduced its total operating costs by 17.7%, a strong contraction mainly due to the adjustment made by the chain in this matter since the beginning of the crisis, and has obtained a reversal of provisions. The cost strategy, together with the work of Grupo Publiespaña in charge of the channel's advertising space, has allowed Telecinco to achieve an adjusted EBITDA operating margin of 98.10 million euros (30.5% margin on net income) and an EBIT of 93.89 million (29.3% on net income).

Despite the sharp drop in net income in this semester, which stands at 320.76 million euros, Telecinco has been able to maintain operating margins in percentage terms at around 30%, demonstrating the effectiveness of its business model in clearly deteriorating market circumstances.

In this sense, Paolo Vasile, CEO of Telecinco, has explained that "despite the very difficult circumstance in which the Spanish television sector finds itself, with advertising investment in decline and the multiplication of channels, Telecinco has shown once again that it is capable of controlling the situation. The second half will still be tough, but with high quality programming for Telecinco, the beginning of a new and aggressive stage in digital channels and the Internet and the austerity even greater than "We will confer on our investment plan we will once again be in a position to brilliantly overcome this stage, waiting for the general circumstances of the Spanish economy to improve and for the effects of the elimination of advertising on public television to be seen."

Publiepaña

Publiespaña Group maintains leadership in the television market with 304.14 million euros of gross television revenues. Telecinco has invoiced 309.48 million euros of total gross advertising revenue during the first half of 2009, of which 304.14 million euros correspond to television advertising revenue (including DTT channels), a figure that maintains the network as the leading television in the advertising market in Spain. With these figures, Grupo Publiespaña has also been able to maintain its power ratio (margin that measures the relationship between the market share and the audience share of Telecinco and its digital channels) at 1.62, a figure that equals that of the same period in 2008 and which represents, by far, the highest margin in the market. Net advertising income stood at 294.87 million euros, while total net income - which includes television advertising billing, in addition to advertising income from other media marketed by Publimedia Gestión (Internet, teletext, thematic and digital channels) and those obtained by the commercial area (merchandising, sale of rights, SMS, etc.) - amounted to 320.76 million euros.

Bet on DTT

Telecinco will allocate a significant budget item to its DTT channels in the last quarter of 2009
With the aim of strengthening the strategy of Telecinco's channels on DTT, the network will allocate a significant amount in the last quarter of the year to reinforcing the contents of La Siete and Factoría de Ficción. For the first of them, Informativos Telecinco is currently working on the creation of “La Siete Noticias”, the first daily news program created specifically by an audiovisual operator for its digital channels. Likewise, the chain has begun the purchase of quality international series based on a series of agreements with large international distributors to incorporate exclusive content to the Factoría de Ficción lineup.

This new commitment to Telecinco's multichannel strategy starting in September represents an alternative path of growth for Publiespaña, for which the company's commercial team is already prepared, according to Giuseppe Tringali, CEO: "Publiespaña has designed a new multichannel commercial policy that it launches in August. As leaders in the advertising market, we have the enormous responsibility to continue innovating in the new audiovisual scenario to optimize the investments of our advertisers to the maximum. The current coverage of the TDT tells us that the time has come to offer our customers on our digital channels products tailored to their needs, related to their target and at the times most appropriate to their profile. Offering the best advertising offer in this new digital era is a huge challenge for us that we face with the passion that always accompanies us.