Promotora de Informaciones (PRS) Q2 2024 earnings summary

Executive summary

• On track to achieve 2024 guidance, with strong business growth and improved financial position in 1H 2024, despite seasonality and extraordinary items affecting year-on-year comparability.

• Excluding extraordinary items, revenues grew 3% and EBITDA rose 20% year-over-year, driven by learning systems, advertising, and digital subscriptions.

• Free cash flow improved by 35% to -€9M, and net debt reduced by €56M since December 2023, now at €776M.

• Financial structure strengthened by €100M convertible notes issue and €50M junior debt repayment, significantly reducing expensive debt since 2022.

• Credit ratings upgraded by Moody's and S&P, reflecting robust operating and financial performance.

Financial highlights

• H1 2024 revenues reached €426M, up 3% year-over-year excluding extraordinary items; reported revenues down 3%.

• Reported EBITDA was €64M (-6%); excluding extraordinary items, EBITDA improved by 20%.

• Net result improved by 33% to -€24M, mainly due to better financial results and asset sales.

• Free cash flow for H1 2024 was -€9M, an improvement from -€15M in H1 2023.

• Net debt/EBITDA ratio improved to 4.2x as of June 2024.

Outlook and guidance

• Confirms commitment to 2024 guidance: targeting EBITDA margin of 19%-20% and free cash flow over €60M.

• 2025 targets reaffirmed: EBITDA margin 22–25%, free cash flow above €100M.

• Expects continued growth in digital subscriptions and resilience in traditional markets.

• No significant change expected in digital press advertising for the rest of 2024, with a slight decline of -0.4% forecasted.