FY 2011 Results February 28th, 2012
Disclaimer In addition to figures prepared in accordance with IFRS, PRISA presents non-gaap financial performance measures, e.g., EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted EBIT, adjusted net profit, free cash flow, gross debt and net debt, among others. These non-gaap measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Non-GAAP financial performance measures are not subject to IFRS or any other generally accepted accounting principles. For further information relevant to the interpretation of these terms, please refer to the Reconciliation Section of the 9M 2011 earnings press release filed with the Securities and Exchange Commission and posted on prisa.com. This document may contain forward-looking statements as defined in Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements about the financial conditions, results of operations, earnings outlook and prospects of the Company. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are based on management s current expectations and are inherently subject to uncertainties and changes in circumstance and their potential effects and each speaks only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements are typically identified by words such as plan, believe, expect, anticipate, intend, outlook, estimate, forecast, project, continue, could, may, might, possible, potential, predict, should, would and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in our filings with the Securities and Exchange Commission under Risk Factors. 1
FY 2011 Highlights 1. Solid underlying performance in a very difficult environment 2. Education and Pay TV remain sources of growth 3. Advertising still under pressure, with little visibility for 2012 4. Increasing international contribution 5. Focus on cost control and efficiency 6. Reported results affected by extra ordinaries: Restructuring charges, Goodwill impairments and provisions on fiscal matters 7. Debt refinancing successfully completed 2
Underlying Group Performance Revenues 1.3% 2.751 2.714 EBITDA Pay TV EBITDA of 172.8M (+12.5%) Total net adds +53,858 in 2011 versus -61,231 in 2010 Education driving growth (Revenues +12.2%) Latin America revenues up 17.6% Strong Educational campaign in Spain up 8,6% 1.7% Digital area continues to grow Advertising revenues growth:(+19.1%) 502 493 Unique browsers to Prisa websites up 25.3% * All Group and business unit figures are Proforma and Adjusted (exclude Cuatro and non-recurring items) SER remains absolute market leader and El País maintains stable circulation numbers, compared to the strong sector fall. 3
The macro environment remains under pressure Diversified portfolio of assets compensates for weak macro environment Jan - Dec 2011 Jan - Dec 2010 33% 32% Subscribers Advertising accounts for 23% of total revenues, of which 20% is LatAm. Advertising Education showing a strong contribution. 23% 24% Books and Rights Audiovisual Production Pay TV improving all key performance indicators. 3% 26% 22% 3% 6% 6% Newspapers and Magazines Others High exposure to growing economies in LatAm. 10% 13% 4
Latin America Revenues Continue Growth Path Latin American Revenues 15.9% Latin America results: 570 661 Revenues by Geography Revenues up 15.9% Education revenues up 17.4% Radio revenues up 4.9% EBITDA up 11,8% Latin America 20% 80% Latin America 24% 76% Latin America share of total revenues up to 24% from 20% in 2010 2010 Spain, Portugal & USA 2011 Spain, Portugal & USA * All Group and business unit figures are Proforma and Adjusted (exclude Cuatro and non-recurring items) Latin America share of total EBITDA up to 39% from 25% in 2010 5
Audiovisual: Strategic Shifts Accelerating Profitability Revenues 4.0% 1281 1229 EBITDA 16.2% 193 224 EBITDA margin up 320BP Canal+ revenues down 4.1%: Net DTH subscribers down by 16,761 Positive impact of wholesale agreements leading to net adds of 24,761 ARPU at 41.1 ( 41.7 in 2010) iplus penetration up to 29% Telefónica & Jazztel agreements signed and starting to have a positive impact Canal+ adjusted expenses down by 7.6% * All Group and business unit figures are Proforma and Adjusted (exclude Cuatro and non-recurring items) 6
Pay TV: Key Performance Indicators Show Good Progress iplus (Millions of Subscribers and Penetration Rates) 29% 24% 26% 21% 17% 14% 9% 5% 6% 100 110 169 246 305 369 416 460 503 2009 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Multiroom (Millions of Subscribers and Penetration Rates) 2% 2% 3% 39 43 56 6% 104 9% 11% 12% 13% 14% 165 201 216 227 239 2009 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Total Subscribers & Net Adds DTH Subscribers evolution (m) Total Subscribers December 2011 DTH 1,756,185 Other Platforms 82,247 TOTAL 1,838,432 YTD Net Add Dec 2010 Dec 2011 DTH -72,949-16,671 Other Platforms +11,718 +70,529 TOTAL -61,231 +53,858-332 ARPU 41,7 41,1 CHURN 15,8% 13,6% * All Group and business unit figures are Proforma and Adjusted (exclude Cuatro and non-recurring items) 259 260 +0.4% 2010-16,6% 2011-277 ARPU & Churn Gross Adds Cancellations 7
Education: Growth Led by Latin America & Spain Education Revenues 12.2% EBITDA margin at 24.1% 642 720 EBITDA 4.4% 166 174 Strong campaigns practically across the board Brazil +24.1% Colombia +21.0% Argentina +17.3% Mexico +18.1% Chile +13.6% Spain -1.9% General Publishing -30.5% Education campaign +8.6% * All Group and business unit figures are Proforma and Adjusted (exclude Cuatro and non-recurring items) 8
Radio: Continued Outperformance in Latin America Offseting Spanish Weakness Revenues 7.1% 406 377 EBITDA Spain declined, affected by weak advertising Latin America advertising revenues up 5,4%, representing 34% of revenues (32% in 2010) SER maintains absolute leadership Revenues Breakdown 19.7% Latin America Latin America 108 87 32% 68% 31% Spain 34% 66% Spain 2010 * All Group and business unit figures are Proforma and Adjusted (exclude Cuatro and non-recurring items) 2011 9
Press: Focus on cost control and Profitability Revenues 7.2% 420 390 EBITDA 5.4% Weak advertising market in Spain continues: Press continues to be the hardest hit sector. Circulation fell 6.5% El País (-1.3%) & AS (-6%) down Cinco Días stable (-0.1%) Focus on cost control given difficult environment. EBITDA margin up 30bps to 14.1% 58 55 * All Group and business unit figures are Proforma and Adjusted (exclude Cuatro and non-recurring items) 10
TOTAL ELPAIS.com AS.com 5Dias.com Radio Spain Radio Latam Media Capital Digital: Strong Growth Continues Across Platforms Millions of Unique Browsers 50,9 63,7 January December 2010 January December 2011 Advertising revenue grew 19.1%. Only segment to show relevant growth in the Spanish advertising market is online (+7.7%). 17,8 25 15,4 19,1 Average number of unique browsers grew 25.3% El País online #1 in Spanish market 1,42,2 7,17,4 5,66,3 6,55,9 Digital development remains strategic priority Source: Omniture, Netscope, and Certifica.com 11
Efficiency Plan Update Cost by business unit as of Dec 2011 Efficiency plan has been completed in all business areas Since inception in 2010 to December 2011: 94.8 million have been expended 1,975 people made redundant or outsourced Expected annualized savings of 64.5 million 19% 32% 7% 6% 36% Audiovisual Education Radio Press Other We continue to review opportunities to become more efficient 12
Cash-flow Cash Flow Million 12/31/2011 12/31/2010 EBITDA 436,91 596,33 Provisions (45,17) (37,21) Change in working capital (136,45) 9,86 Cash flow from operating activities 255,29 568,98 Capex (217,98) (206,01) Financial investments (11,95) (16,16) Disinvestments 5,71 59,34 Cash flow from investing activities (224,22) (162,83) Interests paid (124,39) (124,79) Dividends paid (83,03) (25,67) Dividends received 26,46 - Financing to associates (46,89) - Warrants exercise 1,99 - Other (24,71) (19,67) Cash flow from financing activities (250,57) (170,12) Taxes paid (52,99) (31,54) Other (37,66) (45,15) Cash flow (310,16) 159,33 Disinvestments 23,74 - Sale of 25% Santillana - 278,619 Sale ofcanal+ and Cuatro net of expenses - 911,168 Capital increase net of expenses - 575,830161 Cash flow from special operations 23,74 1.765,62 Cash flow after special operations (286,42) 1.924,95 Cash Flow for 2011 includes: 1. 92m for personnel restructuring (of which 77m are included in EBITDA) 2. 47m of loans to associates (of which Dédalo is 38m) 3. 218m of Capex 4. 136m of Working Capital investment 2011 Working Capital includes extraordinary elements such as: 1. - 51m to ONO 2. - 9m to Espanyol Football Club 3. + 6m from Barcelona Football Club 4. - 16m of the TVE canon 5. Other delayed payments Net debt at the end of 2011: million 31/12/2010 31/12/2011 Gross Debt 3.342 3.400 Cash (405) (155) Other Financial Debt 276 288 Total net debt 3.213 3.534 150 million from warrants exercise and 100 million repayment to banks as per the refinancing agreement, not included in 2011 13
Debt Refinancing Process Maturity Schedule Amount ( m) Old Maturity New Maturity Syndicated Loan 1,380 2011-2013 Becomes Bullet loan, with maturity on March 2014, or December 2014 if certain conditions are met (i.e. bond issue) Bridge Loan 1,540 2013 January 2015, or September 2015 if certain conditions are met (i.e. bond issue). No partial amortization Bilateral Loans 200 2011-2013 January 2015, or September 2015 if certain conditions are met (i.e. bond issue). No partial amortization Subordinated Loan 134 2011-2013 January 2015, or September 2015 if the same conditions as for the above extensions are met Warrants Conversion The refinancing agreement activated the mechanism to exercise 75m warrants in the hands of the Polanco Family (Prisa s reference shareholder), Mr. Franklin and Mr. Berggruen, who subscribed 75m new Prisa shares for a cash consideration of EUR150m (at EUR2 per share) Most of the cash from the warrants execution used to reduce debt. 14
Conclusions 1. A difficult economic environment, especially in Spain and Portugal and in their advertising markets. 2. A strong underlying performance, on the back of: Resilient education & Pay TV businesses Increasing international contribution Strong focus on efficiency and cost control 3. Prisa has successfully completed its financial debt refinancing which will provide Prisa with time and flexibility for an orderly implementation of the company s operational measures 15