Press Release: IMPRESA Accounts of 2006 1. Main Facts of 2006
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Lisbon, March 8, 2007 Press Release: IMPRESA Accounts of 2006 1. Main facts of 2006 • Publiregiões and the printing company Imprejornal, which were sold in April and September, respectively, were not included in the 4th quarter and in the 2006 consolidated financial statements, so the comparisons have been made on the basis of the pro-forma accounts of 2005. • Total revenues came to 255.2 M€, which corresponds to a 0.7% decline in 2006, after having posted a 5.5% increase in the 4th quarter. • In 2006, publication and advertising sales revenues declined. In contrast, multimedia, merchandising and technical services revenues increased sharply. • EBITDA fell 16.8%, to 40.4 M€, which includes 2.3 M€ in restructuring costs. Consolidated EBITDA margin came to 15.8%. • Net Profit came to 16.4 M€ at year-end 2006, a 26% decline in relation to 2005. On the 4th quarter net profits rose 11.7%. Table 1 - IMPRESA Main Indicators Dec-06 4th Qt 05 (Values in 000 €) Dec-06 ch (%) 4th Qt 06 ch (%) (pro-forma) (pf) Total Turnover 255.238 256.969 -0,7% 72.051 68.285 5,5% Advertising 168.064 170.624 -1,5% 48.628 48.779 -0,3% Publications 31.543 35.236 -10,5% 7.342 7.600 -3,4% Thematic Channels 31.189 31.145 0,1% 8.686 7.844 10,7% Associated Products 9.302 10.094 -7,8% 2.385 2.355 1,3% Multimedia 8.400 6.806 23,4% 3.066 1.451 111,2% GMTS 3.784 1.795 110,8% 1.366 408 234,8% Others 4.780 3.943 21,2% 1.056 1.006 5,0% Revenues Television 164.002 162.027 1,2% 47.785 43.541 9,7% Revenues Newspaper 54.963 56.708 -3,1% 15.003 15.867 -5,4% Revenues Magazines 38.097 40.908 -6,9% 9.741 10.036 -2,9% EBITDA 40.416 48.582 -16,8% 16.428 15.971 2,9% EBITDA margin 15,8% 18,9% 22,8% 23,4% EBITDA Television 31.794 34.484 -7,8% 15.126 10.868 39,2% EBITDA Newspapers 8.649 12.365 -30,1% 1.607 4.096 -60,8% EBITDA Magazines 2.075 4.148 -50,0% 278 1.455 -80,9% Net Profits 16.464 22.233 -26,0% 9.430 8.444 11,7% Net Debt (M€) (1) 208,9 214,3 -2,5% 208,9 214,3 -2,5% 1 2. Main Events of 2006 • At end of March, SIC launched the soap opera Floribella, which turned out to be decisive in the recovery of SIC audiences throughout the year. • Also in March 2006, IMPRESA launched a new magazine called Stuff, through its associated company Edimpresa. • In April 2006, IMPRESA disinvested in her associated company Publiregiões, editor of the free newspaper Jornal da Região. • In June 2006, the weekly newspaper Blitz was transformed into a monthly magazine. • In June 2006, IMPRESA, through SIC, acquired a 36.7% share in Ad-Tech. • The transmission of the World Football Cup 2006 between June and July drew the highest audience numbers for SIC in 2006. • In June, was started IMPRESA Classificados, to develop the classifieds on- line business. • In September 2006, the Expresso newspaper was relaunched in a new format: adoption of the berliner format, editorial and graphic reformulation of the main Suplement and Business suplement, along with colour printing of all pages. • In September 2006, IMPRESA sold the entire share capital of Imprejornal, the company that owned its printing machine. • In October 2006, the Expresso newspaper achieved a new sales record of more than 200 thousand copies. • In November 2006, IMPRESA acquired a 50.1% share in the portal AEIOU. • In December 2006, the acquisition process of Som Livre entire share capital was concluded. • In December 2006, IMPRESA began negotiations to acquire a 67% share in New Media, which were concluded in January 2007. 2 3. Television Table 2 - Television Indicators Dec-06 Dec-05 ch % 4th Qt 06 4th Qt 05 ch % Total Revenues 164.002.008 162.026.594 1,2% 47.784.780 43.540.507 9,7% Advertising 115.849.085 118.337.107 -2,1% 33.611.676 32.831.151 2,4% SIC channels 31.189.330 31.145.296 0,1% 8.685.520 7.844.203 10,7% Multimedia 8.400.090 6.806.348 23,4% 3.065.844 1.451.416 111,2% GMTS 3.783.577 1.794.639 110,8% 1.365.756 407.989 234,8% Merchandising 2.727.909 1.903.647 43,3% 878.819 370.203 137,4% Others 2.052.018 2.039.558 0,6% 177.166 635.545 -72,1% Total Operating Costs 132.208.050 127.543.061 3,7% 32.658.513 32.672.727 0,0% EBITDA 31.793.958 34.483.533 -7,8% 15.126.267 10.867.781 39,2% EBITDA (%) 19,4% 21,3% 31,7% 25,0% Profits before taxes 25.673.975 26.445.306 -2,9% 13.871.862 9.203.201 50,7% Note: The SIC channels heading comprises SIC Noticias, SIC Radical, SIC Mulher, SIC Comédia, SIC Internacional and the international subscribers of SIC Notícias. The recovery since the start of the summer month’s enabled SIC’s total revenues to increase by 1.2% at year-end 2006. In the 4th quarter, SIC’s total revenues rose 9.7% year-on-year, its biggest annual increase. This recovery was due, above all, to an improvement in advertising revenues (2.4%) and the overall growth in non-advertising revenues (32.3%). Average Daily Audiences - Quartely SIC ended the year in second place in 27,8% terms of audience numbers, with an 27,0% average of 26.2%. Along the year, SIC 25,2% managed to reduce its audience 24,9% 24,6% difference to the 1st station, considerably. From 8.1 percentage points in January to 0.5 percentage points in December. 4ºQt 05 1ºQt 06 2ºQt 06 3ºQt 06 4ºQt 06 Prime-Time Audiences - Quartely The recovery in prime-time audiences, by 29,2% the Brazilian soap operas, and by the 26,7% 25,9% success of Portuguese soap Floribella, 25,4% 25,0% was significant. The transmission of the World Cup Football Germany 2006 between June and July, the strong popularity of the 4ºQt 05 1ºQt 06 2ºQt 06 3ºQt 06 4ºQt 06 prime-time soap opera Floribella, the maintenance of its leadership position with talk-show “Fátima”, and the afternoon programme “Contacto” that assumed the leadership once again, were the main reasons for the increase in audience numbers throughout the year. Foreign series shown, such as “CSI”, “CSI-Miami” and “Entre Vidas”, which registered audience levels higher than the station's average are also worthy of mention. 3 In 2006, SIC started to change its programming profile, focusing on the production of national fiction, but at the same time maintaining a strong Brazilian soap opera component. The soap operas Floribella and Jura and the weekly series “7 Vidas” and “Aqui Não Há Quem Viva” were produced and put on the air. In spite of the positive evolution of advertising revenues in the 2nd half of the year, the fall in revenues in the 1st semester was not offset completely. SIC thus posted advertising revenues of 115.8 M€ at year-end 2006, a fall of 2.1% in relation to the previous year. SIC's net advertising revenues represented a 37.1% market share in total advertising spending on open television, against 47.6% held by TVI and 15.3% by RTP. The non-advertising revenues at year-end 2006, now account for 29.5% of SIC's total revenues and continued to register high growth rates. The thematic channels closed the year under review with a slight increase (+0.1%), following a good performance in the 4th quarter, with an increase of 10.7% y-o-y. The distribution of SIC Notícias in the US, the increase in subscribers from other pay-tv operators in Portugal, as well as from TV Cabo, contributed towards the good performance in the last quarter of 2006. For its sixth consecutive year, SIC Notícias maintained its position as the most-watched channel on Cable TV, with an average audience of 12% in 2006. This leadership was, once again, achieved in a scenario of strong TV programming in the areas of entertainment, sport, for children and news. SIC’s thematic channels obtained an average audience share of 22.5%. The SIC Comédia channel suspended its activity on 31th December 2006, following the renegotiation of the contract with TV Cabo. An effort was made to place the channel on other platforms, but an agreement that would guarantee the project’s viability was unable to be found. On the other hand, the SIC Mulher channel, from 1 January 2007, began substituting the SIC Comédia channel in the other pay-tv distributors. Other areas showed a significant increase in revenues in 2006, namely GMTS, Merchandising and Multimedia, with increases of 110%, 43.3% and 23%, respectively. Multimedia revenues already account for 5.1% of SIC’s total revenues. In connection with the merchandising related with the soap opera “Floribella”, it is important to highlight the success of the “Floribella” CD, which was, for 14 weeks, the best selling album in Portugal, having gone 10x platinum, of the Floribella Karoeke DVD that went 5x platinum, as well as of a range of more than one hundred licensed products.