11 Nov 2015 12:00
Grupo Clarín announces its
Results for the Nine Months (9M15) and Third Quarter of 2015 (3Q15)
Buenos Aires, Argentina, November 11th, 2015 - Grupo Clarín S.A. ("Grupo Clarín" or the "Company" - LSE: GCLA; BCBA: GCLA), the largest media company in Argentina, announced today its nine months and third quarter results for 2015. Figures in this report have been prepared in accordance with International Financial Reporting Standards ("IFRS") as of September 30th, 2015 and are stated in Argentine Pesos, unless otherwise indicated.
Highlights (9M15 vs. 9M14):
§Net Sales totaled Ps. 19,924.0 million, an increase of 43.2% from 9M14, mainly due to ARPU and subscriber growth in the Cable TV and Internet access segment and, to a lesser extent, to higher advertising sales in the Broadcasting and Programming segment and circulation sales in the Printing and Publishing segment.
§Adjusted EBITDA (1) reached Ps. 6,380.3 million, an increase of 79.3% from 9M14, mainly driven by higher sales in the Cable and Internet access segment.
§Grupo Clarín's Adjusted EBITDA Margin (2) for 9M15 was 32.0%, compared to 25.6% in 9M14.
§Income for the period totaled Ps. 2,740.2 million, an increase of 260.3% from the Ps. 760.6 million reported in 9M14, and the Income for the period attributable to Equity Shareholders amount to Ps 1,744.2 million from Ps. 446.9 million, an increase of 290.3%.
FINANCIAL HIGHLIGHTS
(In millions of Ps.) | 9M15 | 9M14 | % Ch. | 3Q15 | 2Q15 | 3Q14 | QoQ | YoY |
Net Sales | 19,924.0 | 13,909.1 | 43.2% | 7,402.2 | 6,557.6 | 5,141.9 | 12.9% | 44.0% |
Adjusted EBITDA (1) | 6,380.3 | 3,559.1 | 79.3% | 2,433.9 | 2,015.4 | 1,335.9 | 20.8% | 82.2% |
Adjusted EBITDA Margin (2) | 32.0% | 25.6% | 25.1% | 32.9% | 30.7% | 26.0% | 7.0% | 26.6% |
Income for the period | 2,740.2 | 760.6 | 260.3% | 1,063.2 | 876.7 | 452.9 | 21.3% | 134.8% |
Attributable to: | ||||||||
Equity Shareholders | 1,744.2 | 446.9 | 290.3% | 709.9 | 565.1 | 260.8 | 25.6% | 172.2% |
Non-Controlling Interests | 996.0 | 313.7 | 217.5% | 353.3 | 311.6 | 192.1 | 13.4% | 83.9% |
(1) We define Adjusted EBITDA as net sales minus cost of sales (excluding depreciation and amortization) and selling and administrative expenses (excluding depreciation and amortization). We believe that Adjusted EBITDA is a meaningful measure of our performance. It is commonly used to analyze and compare media companies on the basis of operating performance, leverage and liquidity. Nonetheless, Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alternative to cash flow from operating activities or a measure of liquidity. Other companies may compute Adjusted EBITDA in a different manner; therefore, Adjusted EBITDA as reported by other companies may not be comparable to Adjusted EBITDA as we report it.
(2) We define Adjusted EBITDA Margin as Adjusted EBITDA over Net Sales.
.
Net sales reached Ps. 19,924.0 million, an increase of 43.2% from Ps. 13,909.1 million in 9M14 mainly due to ARPU and subscriber growth in the Cable TV and Internet access segment and, to a lesser extent, to higher advertising sales in the Broadcasting and Programming segment and circulation sales in the Printing and Publishing segment.
Following is a breakdown of Net Sales by business segment:
NET SALES
(In millions of Ps.) | 9M15 | 9M14 | YoY | 3Q15 | 2Q15 | 3Q14 | QoQ | YoY |
Cable TV and Internet Access | 14,623.6 | 10,182.6 | 43.6% | 5,391.9 | 4,672.6 | 3,791.2 | 15.4% | 42.2% |
Printing and Publishing | 3,102.9 | 2,188.5 | 41.8% | 1,131.0 | 1,073.3 | 760.8 | 5.4% | 48.7% |
Broadcasting and Programming | 2,457.2 | 1,702.6 | 44.3% | 983.6 | 917.1 | 662.6 | 7.3% | 48.4% |
Digital Content and Others | 535.8 | 461.9 | 16.0% | 198.0 | 152.7 | 158.1 | 29.7% | 25.3% |
Subtotal | 20,719.4 | 14,535.6 | 42.5% | 7,704.6 | 6,815.6 | 5,372.7 | 13.0% | 43.4% |
Eliminations(1) | (795.4) | (626.4) | 27.0% | (302.4) | (258.0) | (230.8) | 17.2% | 31.0% |
Total | 19,924.0 | 13,909.1 | 43.2% | 7,402.2 | 6,557.6 | 5,141.9 | 12.9% | 44.0% |
(1) Eliminations include Grupo Clarín's intercompany balances and operations and also adjustments of income/loss from discontinued operations.
Cost of sales (Excluding Depreciation and Amortization) reached Ps. 8,773.7 million, an increase of 27.5% from Ps. 6,882.6 million reported for 9M14 due to higher costs in our business segments, mainly in Cable TV and Internet access, in Printing and Publishing and in Broadcasting and Programming.
Selling and Administrative Expenses (Excluding Depreciation and Amortization) reached Ps. 4,770.1 million, an increase of 37.6% from Ps. 3,467.4 million in 9M14. This increase was mainly due to higher costs in the Cable TV and Internet access and in Printing and Publishing segments.
Adjusted EBITDA reached Ps. 6,380.3 million, an increase of 79.3% from Ps. 3,559.1 million reported for 9M14, driven by higher sales and margin expansion in the Cable TV and Internet access and Broadcasting and Programming segments and, to a lesser extent, to higher EBITDA in the Printing and Publishing.
Following is a breakdown of adjusted EBITDA by business segment:
ADJUSTED EBITDA
(In millions of Ps.) | 9M15 | 9M14 | YoY | 3Q15 | 2Q15 | 3Q14 | QoQ | YoY |
Cable TV and Internet access | 5,651.4 | 3,382.3 | 67.1% | 2,049.7 | 1,720.3 | 1,276.5 | 19.1% | 60.6% |
Printing and Publishing | 107.5 | (81.4) | 232.1% | 65.2 | 33.2 | (40.2) | 96.2% | 262.2% |
Broadcasting and Programming | 632.8 | 262.4 | 141.1% | 312.1 | 279.5 | 116.1 | 11.7% | 168.9% |
Digital Content and Others | 15.1 | 3.0 | 398.8% | 16.6 | (6.0) | (10.7) | 377.6% | 255.1% |
Subtotal | 6,406.8 | 3,566.4 | 79.6% | 2,443.6 | 2,027.1 | 1,341.7 | 20.5% | 82.1% |
Eliminations(2) | (26.5) | (7.3) | (262.5%) | (9.7) | (11.6) | (5.8) | 16.5% | (68.1%) |
Total | 6,380.3 | 3,559.1 | 79.3% | 2,433.9 | 2,015.4 | 1,335.9 | 20.8% | 82.2% |
(2) Adjustments of income/loss from discontinued operations.
Financial results net totaled Ps. (1,171.0) million compared to Ps. (1,472.1) million for 9M14 The decrease was mainly due to lower peso depreciation during 9M15, which went from Ps 8.55 per dollar at the end of December 9M14, to Ps 9.42 per dollar as of September 30th, 2015; compared with the 9M14 with went from Ps 6.52 per dollar at the end of December 2013 to Ps. 8.43 per dollar as of September 30th, 2014.
Equity in earnings from unconsolidated affiliates in 9M15 totaled Ps. 59.8 million, compared to Ps. 28.3 million for 9M14.
Other Income (expenses), net reached Ps. 3.2 million, compared to Ps. 2.0 million in 9M14.
Income tax as of December 2015 reached Ps. (1,291.4) million, from Ps. (327.3) million in September 2014.
Income from Discontinued Operations, reached Ps. 48.7 million in 9M15, compared to Ps.18.0 million for 9M14.
Income for the period totaled Ps. 2,740.2 million, an increase of 260.3% from Ps. 760.6 million reported for 9M14. This was mainly a consequence of higher EBITDA in the Cable TV and Internet access and Broadcasting and Programming segments and lower peso depreciation. The Equity Shareholders Income for the period amounted to Ps.1,744.2 million, an increase of 290.3% compared with September 2014.
Cash used in acquisitions of property, plant and equipment (CAPEX) totaled Ps. 2,749.7 million in 9M15, an increase of 41.6% from Ps. 1,941.6 million reported for 9M14. Out of the total CAPEX in 9M15, 96.6% was allocated to the Cable TV and Internet access segment, 1.8% to the Broadcasting and Programming segment and the remaining 1.5% to other activities. Capex in the Cable TV and Internet Access segment pertains to subscriber growth, network upgrades and digitalization.
Debt profile (1): Debt coverage ratio for the period ended September 30th, 2015 was 0.57x and the Net Debt at the end of this period totaled Ps. 3,652.5 million.
(1) Debt Coverage Ratio is defined as Total Financial Debt divided by Adjusted EBITDA (Last Quarter Annualized). Total Financial debt is defined as financial loans and debt for acquisitions, including accrued interest.
SALES BREAKDOWN BY SOURCE OF REVENUE - SEPTEMBER 2015
(In millions of Ps.) | Cable TV & Internet access | Printing & Publishing | Broadcasting & Programming | Digital Content & Others | Eliminations(1) | Total | % |
Advertising | 82.7 | 1,233.9 | 1,819.2 | 165.9 | (169.6) | 3,132.1 | 15.7% |
Circulation | - | 1,468.4 | - | - | (0.0) | 1,468.4 | 7.4% |
Printing | - | 243.6 | - | - | (35.4) | 208.2 | 1.0% |
Video Subscriptions | 10,561.6 | - | - | - | - | 10,561.6 | 53.0% |
Internet Subscriptions | 3,436.5 | - | - | - | (11.3) | 3,425.2 | 17.2% |
Programming | - | - | 279.6 | - | (103.7) | 175.9 | 0.9% |
Other Sales
| 542.8 | 157.0 | 358.4 | 370.0 | (475.4) | 952.7 | 4.8% |
Total Sales | 14,623.6 | 3,102.9 | 2,457.2 | 535.8 | (795.4) | 19,924.0 | 100.0% |
(1) Eliminations include Grupo Clarín's intercompany balances and operations and also adjustments of income/loss from discontinued operations.
SALES BREAKDOWN BY SOURCE OF REVENUE - SEPTEMBER 2014
(In millions of Ps.) | Cable TV & Internet access | Printing & Publishing | Broadcasting & Programming | Digital Content & Others | Eliminations(1) | Total | % |
Advertising | 63.9 | 1,009.5 | 1,271.1 | 31.1 | -145.3 | 2,230.3 | 16.0% |
Circulation | - | 933.1 | - | - | -0.0 | 933.1 | 6.7% |
Printing | - | 130.5 | - | - | -40.3 | 90.2 | 0.6% |
Video Subscriptions | 7,772.6 | - | - | - | - | 7,772.6 | 55.9% |
Internet Subscriptions | 1,904.3 | - | - | - | -7.9 | 1,896.4 | 13.6% |
Programming | - | - | 317.9 | - | -107.0 | 210.9 | 1.5% |
Other Sales
| 441.8 | 115.4 | 113.5 | 430.7 | -325.9 | 775.5 | 5.6% |
Total Sales | 10,182.6 | 2,188.5 | 1,702.6 | 461.9 | (626.4) | 13,909.1 | 100.0% |
(1) Eliminations include Grupo Clarín's intercompany balances and operations and also adjustments of income/loss from discontinued operations.
RESULTS BY BUSINESS SEGMENT CABLE TV AND INTERNET ACCESS
Net Sales
Net sales increased by 43.6% to Ps. 14,623.6 million for 9M15 compared to Ps. 10,182.6 million for 9M14. The increase is mostly attributable to an increase in subscription charges registered during the last twelve months, and also reflects the growth in Cable, Broadband and Digital subscribers. Total Consolidated Cable TV basic subscribers reached 3,535,047 as of September 2015, compared to the 3,508,782 reported for the same date in 2014. Internet subscribers reached 1,982,007 in September 2015, compared to the 1,816,109 of September 2014.
Cost of Sales (Excluding Depreciation and Amortization)
Cost of sales (excluding depreciation and amortization) increased by 28.7% to Ps. 5,622.4 million for September 2015, compared to Ps. 4,368.8 million in September 2014. This was mainly due to higher programming costs, salaries, taxes, duties and contributions and network expenses and fixed assets maintenance costs.
Selling and Administrative Expenses (Excluding Depreciation and Amortization)
Selling and administrative expenses (excluding depreciation and amortization) increased by 37.8% to Ps. 3,349.8 million for 9M15, compared to Ps. 2,431.5 million reported in 9M14. This increase is driven by higher fees for services, taxes, duties and contributions, salaries and marketing expenses.
Depreciation and Amortization
Depreciation and amortization expenses increased by 24.1% to Ps. 1,198.6 million for 9M15 from Ps. 966.2 million reported in 9M14.
PRINTING AND PUBLISHING
Net Sales
The 41.8% increase of Net Sales to Ps. 3,102.9 million in 9M15, was the result of higher sales in circulation, advertising and printing services.
Cost of Sales (Excluding Depreciation and Amortization)
Cost of sales (excluding depreciation and amortization) increased by 21.9% to Ps. 1,769.8 million in 9M15, compared to Ps. 1,451.4 million in 9M14. The increase was mainly the result of higher printing costs, cost of the goods sold and salaries.
Selling and Administrative Expenses (Excluding Depreciation and Amortization)
Selling and administrative expenses (excluding depreciation and amortization) increased by 49.7% to Ps. 1,225.6 million in 9M15, compared to the Ps. 818.5 million reported for 9M14. This was primarily the result of higher distribution costs, marketing expenses, fees for services and salaries.
Depreciation and Amortization
Depreciation and amortization expenses increased by 8.1% to Ps. 49.5 million in 9M15 compared to Ps. 45.8 million in 9M14.
BROADCASTING AND PROGRAMMING
Net Sales
Net sales increased by 44.3% to Ps. 2,457.2 million in 9M15, compared to Ps. 1,702.6 million in 9M14. The increase was primarily the result of higher advertising sales related to Canal Trece and Radio Mitre.
Cost of Sales (Excluding Depreciation and Amortization)
Cost of sales (excluding depreciation and amortization) increased by 26.8% to Ps. 1,391.8 million in 9M15, compared to Ps. 1,097.6 million in 9M14. This is attributable mainly to higher salaries, production and programming costs.
Selling and Administrative Expenses (Excluding Depreciation and Amortization)
Selling and administrative expenses (excluding depreciation and amortization) increased by 26.3% to Ps. 432.6 million in 9M15, compared to Ps. 342.6 million in 9M14. The increase was primarily the result of higher salaries and, to a lesser extent, taxes, duties and contributions.
Depreciation and Amortization
Depreciation and amortization expenses increased by 13.0% to Ps. 28.3 million in 9M15 compared to Ps. 25.1 million reported in 9M14.
DIGITAL CONTENT AND OTHERS
Net sales in this segment are derived from administrative and corporate services rendered by the Company and by our subsidiary GC Gestión Compartida S.A. to third parties as well as to other subsidiaries of the Company (which are eliminated in the consolidation). Additionally, this segment includes the production of digital content and the organization of trade fairs and exhibitions. Cost of sales (excluding depreciation and amortization) is driven mainly by salaries and professional fees paid to advisers.
In this period, net sales increased 16.0% to Ps. 535.8, from Ps. 461.9 million reported in 9M14, due to due to higher sales at Gestión Compartida, fees at Grupo Clarín and revenues from trade fairs and exhibitions business. EBITDA resulted in Ps. 15.1 million.
OPERATING STATISTICS BY BUSINESS SEGMENT
CABLE TV AND INTERNET ACCESS
9M15 | 9M14 | YoY | 3Q15 | 2Q15 | 3Q14 | QoQ | YoY | |||||||||
Homes Passed (1) | 7,753.8 | 7,512.3 | 3.2% | 7,753.8 | 7,732.2 | 7,512.3 | 0.3% | 3.2% |
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Bidirectional Homes Passed | 70.2% | 67.9% | 3.3% | 70.2% | 69.0% | 67.9% | 1.7% | 3.3% |
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Cable TV |
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Total Consolidated Subscribers (1)(3) | 3,535.0 | 3,508.8 | 0.7% | 3,535.0 | 3,510.8 | 3,508.8 | 0.7% | 0.7% |
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Subscribers - Argentina | 3,398.5 | 3,377.1 | 0.6% | 3,398.5 | 3,375.5 | 3,377.1 | 0.7% | 0.6% |
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Subscribers - International (Uruguay) | 136.5 | 131.7 | 3.7% | 136.5 | 135.3 | 131.7 | 0.9% | 3.7% |
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% over Homes Passed | 45.6% | 46.7% | (2.4%) | 45.6% | 45.4% | 46.7% | 0.4% | (2.4%) |
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Total Equity Subscribers(4) | 3,666.3 | 3,637.0 | 0.8% | 3,666.3 | 3,641.1 | 3,637.0 | 0.7% | 0.8% |
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Churn Rate % | 12.4% | 13.6% | (8.4%) | 11.5% | 11.9% | 13.9% | (4.1%) | (17.7%) |
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Digital Video |
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Digital Ready Pay TV Subs | 3,118.1 | 2,785.5 | 11.9% | 3,118.1 | 2,787.9 | 2,785.5 | 11.8% | 11.9% |
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Total Digital Decoders | 1,584.4 | 1,385.7 | 14.3% | 1,584.4 | 1,508.2 | 1,385.7 | 5.1% | 14.3% |
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Argentina | 1,391.7 | 1,221.6 | 13.9% | 1,391.7 | 1,322.8 | 1,221.6 | 5.2% | 13.9% |
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International | 192.7 | 164.0 | 17.5% | 192.7 | 185.4 | 164.0 | 3.9% | 17.5% |
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Penetration over Digital Ready TV Subs | 50.8% | 49.7% | 2.1% | 50.8% | 54.1% | 49.7% | (6.1%) | 2.1% |
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Internet Subscribers |
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Total Internet Subscribers (1) | 1,982.0 | 1,816.1 | 9.1% | 1,982.0 | 1,923.8 | 1,816.1 | 3.0% | 9.1% |
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Cablemodem(1) | 1,973.9 | 1,805.8 | 9.3% | 1,973.9 | 1,915.4 | 1,805.8 | 3.1% | 9.3% |
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ADSL(1) | 3.51 | 5.1 | (30.8%) | 3.5 | 3.8 | 5.1 | (7.2%) | (30.8%) |
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Dial Up (1) | 4.6 | 5.2 | (12.7%) | 4.6 | 4.6 | 5.2 | (1.8%) | (12.7%) |
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% over Bidirectional Homes Passed | 39.3% | 35.6% | 10.3% | 39.3% | 38.1% | 35.6% | 3.0% | 10.3% |
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Total ARPU(2) | 462.5 | 323.2 | 43.1% | 510.2 | 445.9 | 359.6 | 14.4% | 41.9% |
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(1) Figures in thousands
(2) Net Sales/ Average Pay TV Subscribers
(3) Total subscribers consolidated following the same consolidation methods used in the financial statements as of each year end.
(4) Total subscribers considering the equity share in each subsidiary.
PRINTING AND PUBLISHING
9M15 | 9M14 | YoY | 3Q15 | 2Q15 | 3Q14 | QoQ | YoY | |
Circulation (1) | 264.1 | 278.9 | (5.3%) | 259.1 | 261.5 | 270.5 | (0.9%) | (4.2%) |
Circulation share % (2) | 39.4% | 38.9% | 1.3% | 39.9% | 39.2% | 39.1% | 1.9% | 2.1% |
Advertising share %(3) | 51.5% | 53.8% | (4.3%) | 51.1% | 51.4% | 53.7% | (0.6%) | (4.9%) |
(1) Average number of copies according to IVC (including Diario Clarín and Olé)
(2) Share in Buenos Aires and Greater Buenos Aires Area (AMBA) Diario Clarín. Source: AGEA and IVC.
(3) Share in Buenos Aires and Greater Buenos Aires Area (AMBA) Diario Clarín. Source: Monitor de Medios Publicitarios S.A.
BROADCASTING AND PROGRAMMING
9M15 | 9M14 | YoY | 3Q15 | 2Q15 | 3Q14 | QoQ | YoY | |
Advertising Share % (1) | 38.8% | 36.8% | 5.3% | 40.2% | 38.6% | 40.2% | 4.1% | 0.0% |
Audience Share % (2) | ||||||||
Prime Time | 37.3% | 33.0% | 13.2% | 39.3% | 37.6% | 35.7% | 4.5% | 10.2% |
Total Time | 30.1% | 26.3% | 14.3% | 31.5% | 30.2% | 28.0% | 4.1% | 12.4% |
(1) Company estimate, over ad spend in Ps. In broadcast TV for AMBA region.
(2) Share of broadcast TV audience according to IBOPE for AMBA. PrimeTime is defined as Monday through Friday from 8pm to 12am. Total Time is defined as Monday through Sunday from 12 pm to 12 am.
DIGITAL CONTENT AND OTHERS
9M15 | 9M14 | YoY | |
Page Views (1) | 778.8 | 769.8 | 1.2% |
Unique Visitors(1) | 64.6 | 43.8 | 47.3% |
(1)In millions. Average. Source IAB and Company Estimates.
DEBT AND LIQUIDITY
(In millions of Ps.) | September 2015 | September 2014 | % Change | June 2015 | % Change |
Short Term and Long Term Debt | |||||
Current Financial Debt | 2,736.1 | 1,397.9 | 95.7% | 1,573.3 | 73.9% |
Financial loans | 769.5 | 346.3 | 122.2% | 762.3 | 0.9% |
Negotiable obligations | 1,200.5 | 741.8 | 61.8% | 56.1 | 2,038.3% |
Accrued interest | 76.7 | 57.5 | 33.4% | 140.6 | (45.4%) |
Acquisition of equipment | 239.7 | 148.4 | 61.5% | 222.1 | 7.9% |
Sellers Financing Capital | 177.8 | 2.9 | 6,072.2% | 1.3 | 13,514.5% |
Sellers Financing accrued interest | - | - | NA | - | NA |
Related Parties Capital | 15.3 | 9.7 | 57.3% | 8.4 | 82.1% |
Related Parties accrued interest | 3.9 | 1.9 | 106.2% | 2.2 | 79.6% |
Bank overdraft | 252.9 | 89.3 | 183.0% | 380.3 | (33.5%) |
Non-Current Financial Debt | 2,816.3 | 3,026.5 | (6.9%) | 3,959.9 | (28.9%) |
Financial loans | 22.8 | 179.9 | (87.3%) | 166.3 | (86.3%) |
Negotiable obligations | 2,400.1 | 2,531.7 | (5.2%) | 3,444.9 | (30.3%) |
Accrued interest | - | - | NA | - | NA |
Acquisition of equipment | 393.5 | 311.4 | 26.3% | 348.7 | 12.8% |
Sellers Financing Capital | - | - | NA | - | NA |
Sellers Financing accrued interest | - | - | NA | - | NA |
Related Parties Capital | - | 2.9 | (100.0%) | - | NA |
Related accrued interest | - | 0.5 | (100.0%) | - | NA |
Bank overdraft | - | - | NA | - | NA |
Total Financial Debt (A) | 5,552.5 | 4,424.3 | 25.5% | 5,533.2 | 0.3% |
Measurement at fair Value | (28.2) | (39.2) | 28.1% | (30.9) | 8.8% |
Total Short Term and Long Term Debt | 5,524.3 | 4,385.1 | 26.0% | 5,502.2 | 0.4% |
Cash and Cash Equivalents (B) | 1,900.0 | 1,662.3 | 14.3% | 3,052.5 | (37.8%) |
Net Debt (A) - (B) | 3,652.5 | 2,762.1 | 32.2% | 2,480.7 | 47.2% |
Net Debt/Adjusted EBITDA (1) | 0.38x | 0.52x | (27.4%) | 0.31x | 21.9% |
% USD Debt | 80.6% | 85.5% | (5.7%) | 75.5% | 6.9% |
% Ar. Ps Debt | 19.4% | 14.5% | 33.7% | 24.5% | (21.1%) |
Total Financial Debt(1) and Net Debt, increased from Ps. 4,424.3 million to Ps. 5,552.5 million and from Ps. 2,762.1 million to Ps. 3,652.5 million respectively. This represents an increase of 25.5% in the Total Debt and an increase of 32.2% in the Net Debt.
Debt coverage ratio (1) as of September 30th, 2015 was 0.38x in the case of Net Debt and of 0.57x in terms of Total Financial Debt.
(1) Debt Coverage Ratio is defined as Total Financial Debt divided by Adjusted EBITDA (Last Quarter Annualized). Total Financial debt is defined as financial loans and debt for acquisitions, including accrued interest.
RELEVANT MATTERS
NEXTEL ARGENTINA ACQUISITION
On 14 September 2015, Grupo Clarín S.A. (the "Company") informed the Argentine Securities Commission and the Buenos Aires Stock Exchange that the Company had made an offer to NII Mercosur Telecom, S.L.U. and NII Mercosur Móviles, S.L.U. (as "Sellers"), subject to the fulfillment of certain conditions, to acquire from Sellers 49% of the capital stock of Nextel Communications Argentina S.R.L. ("Nextel Argentina") and an option to acquire, together with its subsidiary Televisión Dirigida S.A., the remaining 51% (the "Offer").
The Company offered to assign the rights and obligations arising from the Offer to its subsidiary Cablevisión S.A., which accepted the assignment.
The aggregate price of the transaction is of USD165 million (the "Price") plus the right to additional consideration of up to USD13 million, subject to certain conditions.
The transaction was completed on 14 September with the acceptance of the Offer by Sellers and the payment by Cablevisión S.A. of USD159 million. The balance of USD6 million was placed in escrow to cover eventual liabilities of the target company.
The transaction is carried out in full compliance with applicable law.
Nextel Argentina is the fourth mobile telecommunications operator in the country with a market share of approximately 3%, and operates in Argentina since 1998.
STOCK AND MARKET INFORMATION
Grupo Clarín trades its stock in the Buenos Aires Stock Exchange (BCBA) and in the London Stock Exchange (LSE), in the form of shares and GDS's, respectively.
GCLA (BCBA) Price per Share (ARS)
| 117.0 |
GCLA (LSE) Price per GDS (USD) | 16.0 |
Total Shares | 287,418,584 |
Total GDSs | 143,709,292 |
Market Value (USD MM) | 2,299.3 |
Closing Price | November 10th, 2015 |
CONFERENCE CALL AND WEBCAST INFORMATION
Grupo Clarín will host a conference call and webcast to discuss its Third Quarter Results for 2015, on Wednesday, November 11th, 2015.
Time: 12:00pm Buenos Aires Time/3:00pm London Time/10:00am New York Time.
Those interested in connecting via conference call are invited to please dial 1-800-311-9404 toll free from the U.S., 0-800-444-7657 from Argentina, or 1 (334) 323-7224 from elsewhere 5-10 minutes prior to the start time. The Conference ID is 9011.
To access the simultaneous webcast presentation, please direct your browser to:
http://www.grupoclarin.com/ir.
There will be a two weeks replay available starting one hour after the conclusion of the conference call. To access the replay, please dial 1-877-919-4059 toll free from the U.S., or 1-334-323-0140 from anywhere outside the U.S. The replay passcode is: 20310414.
The PDF version of the webcast presentation will be available at http://www.grupoclarin.com.ar/ir prior to the call, on November 11th, and archived in our Website after its conclusion.
Investor Relations Contacts | ||
In Buenos Aires: | In London: | In New York: |
Alfredo Marín Agustín Medina Manson | Alex Money
| Melanie Carpenter
|
Grupo Clarín S.A. | Jasford IR | I-advize Corporate Communications |
Tel: +54 11 4309 7215 | Tel: +44 20 3289 5300 | Tel: +1 212 406 3692 |
Email: investors@grupoclarin.com | E-mail: alexm@jasford.com | E-mail: clarin@i-advize.com
|
ABOUT THE COMPANY
Grupo Clarín is the largest media company in Argentina and a leading company in the cable television and Internet access, printing and publishing, and broadcasting and programming markets. Its cable television network is one of the largest in Latin America in term of subscribers, and is a leading broadband provider in Argentina. Its flagship newspaper -Diario Clarín- is one of the highest circulation newspapers in Latin America. Grupo Clarín is the largest producer of media content in Argentina, including news, sports and entertainment and reaches substantially all segments of the Argentine population in terms of wealth, geography and age.
Disclaimer
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Grupo Clarín. You can identify forward-looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could", "may" or "might" the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. Grupo Clarín does not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in Grupo Clarín's projections or forward-looking statements, including, among others, general economic conditions, Grupo Clarín's competitive environment, risks associated with operating in Argentina a, rapid technological and market change, and other factors specifically related to Grupo Clarín and its operations.
GRUPO CLARÍN S.A.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2015 AND 2014,
AND FOR THE THREE-MONTH PERIODS BEGINNING JULY 1 AND ENDED SEPTEMBER 30, 2015 AND 2014
In Argentine Pesos (Ps.)
September 30, 2015 | September 30, 2014 | July 1, 2015 through September 30, 2015 | July 1, 2014 through September 30, 2014 | |||||
Continuing Operations | ||||||||
Revenues | 19,924,038,692 | 13,909,132,795 | 7,402,162,129 | 5,141,944,493 | ||||
Cost of Sales (1) | (9,963,942,054) | (7,846,502,383) | (3,658,354,100) | (2,875,459,438) | ||||
Subtotal - Gross Profit | 9,960,096,638 | 6,062,630,412 | 3,743,808,029 | 2,266,485,055 | ||||
Selling Expenses (1) | (2,525,812,615) | (1,738,322,799) | (960,654,017) | (628,013,417) | ||||
Administrative Expenses (1) | (2,343,305,991) | (1,812,586,480) | (811,142,999) | (681,674,115) | ||||
Other Income and Expense, net | 3,159,029 | 2,049,600 | (4,929,317) | (1,381,837) | ||||
Financial Costs | (994,115,232) | (1,522,266,799) | (371,579,736) | (281,712,653) | ||||
Other Financial Results, net | (176,895,706) | 50,127,279 | (88,306,264) | (26,553,378) | ||||
Financial Results | (1,171,010,938) | (1,472,139,520) | (459,886,000) | (308,266,031) | ||||
Equity in Earnings from Affiliates and Subsidiaries | 59,766,841 | 28,298,132 | 26,681,145 | 10,061,064 | ||||
Income before Income Tax and Tax on Assets | 3,982,892,964 | 1,069,929,345 | 1,533,876,841 | 657,210,719 | ||||
Income Tax and Tax on Assets | (1,291,391,232) | (327,298,392) | (492,027,103) | (215,765,240) | ||||
Income for the period from continuing operations | 2,691,501,732 | 742,630,953 | 1,041,849,738 | 441,445,479 | ||||
Discontinued Operations | ||||||||
Net Income from Discontinued Operations | 48,721,236 | 17,972,538 | 21,311,328 | 11,437,187 | ||||
Income for the period | 2,740,222,968 | 760,603,491 | 1,063,161,066 | 452,882,666 | ||||
Other Comprehensive Income | ||||||||
Items which may be reclassified to net income | ||||||||
Variation in Translation Differences of Foreign Operations from Continuing Operations | (127,217,059) | 480,999,756 | 92,681,862 | 221,168,159 | ||||
Other Comprehensive Income for the period | (127,217,059) | 480,999,756 | 92,681,862 | 221,168,159 | ||||
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 2,613,005,909 | 1,241,603,247 | 1,155,842,928 | 674,050,825 | ||||
Profit Attributable to: | ||||||||
Shareholders of the Parent Company | 1,744,216,422 | 446,935,880 | 709,873,133 | 260,806,230 | ||||
Non-Controlling Interests | 996,006,546 | 313,667,611 | 353,287,933 | 192,076,436 | ||||
Total Comprehensive Income Attributable to: | ||||||||
Shareholders of the Parent Company | 1,673,868,745 | 699,692,548 | 745,889,716 | 363,517,774 | ||||
Non-Controlling Interests | 939,137,164 | 541,910,699 | 409,953,212 | 310,533,051 | ||||
Basic and Diluted Net Income (Loss ) per Share from Continuing Operations | 5.90 | 1.49 | 2.40 | 0.87 | ||||
Basic and Diluted Net Income (Loss) per Share from Discontinued Operations | 0.17 | 0.06 | 0.07 | 0.04 | ||||
Basic and Diluted Net Income (Loss) per Share - Total | 6.07 | 1.55 | 2.47 | 0.91 | ||||
(1) Includes amortization of intangible assets and film library, and depreciation of property, plant and equipment in the amount of Ps. 1,289,304,444 and Ps. 1,047,355,631 for the nine-month periods ended September 30, 2015 and 2014, respectively.
The Consolidated Statements of Operations for each business segment are included in the Financial Statements as of September 30th, 2015, available at http://www.grupoclarin.com/ir.
GRUPO CLARÍN S.A.
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
In Argentine Pesos (Ps.)
September 30, 2015 | December 31, 2014 | |||
ASSETS | ||||
NON-CURRENT ASSETS | ||||
Property, Plant and Equipment | 7,940,325,018 | 6,370,192,626 | ||
Intangible Assets | 249,436,731 | 330,614,131 | ||
Goodwill | 2,913,281,980 | 2,932,411,625 | ||
Deferred Tax Assets | 365,800,883 | 298,134,997 | ||
Investments in unconsolidated affiliates | 1,244,452,599 | 345,510,998 | ||
Other Investments | 325,545,651 | 275,625,916 | ||
Inventories | 17,863,419 | 20,952,973 | ||
Other Assets | 2,003,705 | 1,249,770 | ||
Other Receivables | 1,053,070,003 | 134,959,494 | ||
Trade Receivables | 98,551,480 | 91,505,064 | ||
Total Non-Current Assets | 14,210,331,469 | 10,801,157,594 | ||
CURRENT ASSETS | ||||
Inventories | 427,652,240 | 272,051,027 | ||
Other Assets | 4,435,133 | 7,063,276 | ||
Other Receivables | 956,396,549 | 624,552,014 | ||
Trade Receivables | 3,483,907,055 | 2,885,040,086 | ||
Other Investments | 1,640,950,677 | 1,416,105,212 | ||
Cash and Banks | 1,163,993,057 | 1,161,628,319 | ||
Total Current Assets | 7,677,334,711 | 6,366,439,934 | ||
Assets held for sale | 165,868,950 | 163,897,072 | ||
Total Assets | 22,053,535,130 | 17,331,494,600 | ||
EQUITY (as per the corresponding statement) | ||||
Attributable to Shareholders of the Parent Company | ||||
Shareholders' Contributions | 2,010,638,503 | 2,010,638,503 | ||
Other items | 406,897,031 | 477,244,708 | ||
Retained Earnings | 4,489,355,585 | 2,995,139,163 | ||
Total Attributable to Shareholders of the Parent Company | 6,906,891,119 | 5,483,022,374 | ||
Attributable to Non-Controlling Interests | 3,033,384,313 | 2,282,464,286 | ||
Total Shareholders' Equity | 9,940,275,432 | 7,765,486,660 | ||
LIABILITIES | ||||
NON-CURRENT LIABILITIES | ||||
Provisions and Other | 362,221,282 | 336,650,704 | ||
Debt | 2,766,717,968 | 2,870,498,547 | ||
Deferred Tax Liabilities | - | 55,140,623 | ||
Taxes Payable | 88,606,517 | 98,018,442 | ||
Other Liabilities | 141,243,958 | 151,758,062 | ||
Trade Payables and Other | 10,100,341 | 8,059,507 | ||
Total Non-Current Liabilities | 3,368,890,066 | 3,520,125,885 | ||
CURRENT LIABILITIES | ||||
Debt | 2,579,739,305 | 1,718,898,323 | ||
Seller Financings | 177,831,161 | 3,791,426 | ||
Taxes Payable | 1,338,173,886 | 858,170,919 | ||
Other Liabilities | 622,732,381 | 309,348,644 | ||
Trade Payables and Other | 4,025,892,899 | 3,155,672,743 | ||
Total Current Liabilities | 8,744,369,632 | 6,045,882,055 | ||
Total Liabilities | 12,113,259,698 | 9,566,007,940 | ||
Total Equity and Liabilities | 22,053,535,130 | 17,331,494,600 |
GRUPO CLARÍN S.A.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2015 AND 2014
In Argentine Pesos (Ps.)
Equity attributable to Shareholders of the Parent Company | Equity Attributable to Non-Controlling Interests | |||||||||||||||
Shareholders' Contributions | Other items | Retained Earnings | Total Equity of Controlling Interests | |||||||||||||
Capital Stock | Inflation Adjustment on Capital Stock | Additional Paid-in Capital | Subtotal | Translation of Foreign Operations | Other Reserves | Legal Reserve | Optional reserves (1) | Accumulated Results | Total Equity | |||||||
Balances as of January 1st, 2015 | 287,418,584 | 309,885,253 | 1,413,334,666 | 2,010,638,503 | 477,454,394 | (209,686) | 119,460,767 | 2,071,576,709 | 804,101,687 | 5,483,022,374 | 2,282,464,286 | 7,765,486,660 | ||||
Set-up of reserves (Note 10.a.) | - | - | - | - | - | - | - | 554,101,687 | (554,101,687) | - | - | - | ||||
Dividend Distribution (Note 10.a.) | - | - | - | - | - | - | - | - | (250,000,000) | (250,000,000) | - | (250,000,000) | ||||
Dividends and Other Movements of Non-Controlling Interest | - | - | - | - | - | - | - | - | - | - | (188,217,137) | (188,217,137) | ||||
Income for the period | - | - | - | - | - | - | - | - | 1,744,216,422 | 1,744,216,422 | 996,006,546 | 2,740,222,968 | ||||
Other Comprehensive Income: | ||||||||||||||||
Variation in Translation Differences of Foreign Operations | - | - | - | - | (70,347,677) | - | - | - | - | (70,347,677) | (56,869,382) | (127,217,059) | ||||
Balances as of September 30, 2015 | 287,418,584 | 309,885,253 | 1,413,334,666 | 2,010,638,503 | 407,106,717 | (209,686) | 119,460,767 | 2,625,678,396 | 1,744,216,422 | 6,906,891,119 | 3,033,384,313 | 9,940,275,432 | ||||
Balances as of January 1st, 2014 | 287,418,584 | 309,885,253 | 1,413,334,666 | 2,010,638,503 | 283,025,052 | 5,207,274 | 112,710,297 | 1,838,495,623 | 479,831,556 | 4,729,908,305 | 1,748,885,854 | 6,478,794,159 | ||||
Set-up of reserves | - | - | - | - | - | - | 6,750,470 | 233,081,086 | (239,831,556) | - | - | - | ||||
Dividend Distribution | - | - | - | - | - | - | - | - | (240,000,000) | (240,000,000) | - | (240,000,000) | ||||
Changes in Reserves for Acquisition of Investments | - | - | - | - | - | (5,416,960) | - | - | - | (5,416,960) | - | (5,416,960) | ||||
Dividends and Other Movements of Non-Controlling Interest | - | - | - | - | - | - | - | - | - | - | (173,428,392) | (173,428,392) | ||||
Income for the period | - | - | - | - | - | - | - | - | 446,935,880 | 446,935,880 | 313,667,611 | 760,603,491 | ||||
Other Comprehensive Income: | ||||||||||||||||
Variation in Translation Differences of Foreign Operations | - | - | - | - | 252,756,668 | - | - | - | - | 252,756,668 | 228,243,088 | 480,999,756 | ||||
Balances as of September 30, 2014 | 287,418,584 | 309,885,253 | 1,413,334,666 | 2,010,638,503 | 535,781,720 | (209,686) | 119,460,767 | 2,071,576,709 | 446,935,880 | 5,184,183,893 | 2,117,368,161 | 7,301,552,054 | ||||
(1) Broken down as follows: (i) Optional reserve for future dividends of Ps. 300,000,000; (ii) Judicial reserve for future dividend distribution of Ps. 387,028,756, (iii) Optional reserve for illiquidity of results of Ps. 694,371,899 and (iv) Optional reserve to provide financial aid to subsidiaries and in connection with the Audiovisual Communication Services Law of Ps. 1,244,277,741.
GRUPO CLARÍN S.A.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2015 AND 2014
In Argentine Pesos (Ps.)
September 30, 2015 | September 30, 2014 | |||
CASH PROVIDED BY OPERATING ACTIVITIES | ||||
Income for the period | 2,740,222,968 | 760,603,491 | ||
Income Tax and Tax on Assets | 1,291,391,232 | 327,298,392 | ||
Accrued Interest, net | 337,393,079 | 353,715,827 | ||
Adjustments to reconcile net income for the period to cash provided by operating activities: | ||||
Depreciation of Property, Plant and Equipment | 1,159,181,054 | 918,855,680 | ||
Amortization of Intangible Assets and Film Library | 130,123,390 | 128,499,951 | ||
Net of allowances | 252,042,433 | 209,363,413 | ||
Financial Results | 53,139,479 | 917,534,556 | ||
Equity in Earnings from Affiliates and Subsidiaries | (59,766,841) | (28,298,132) | ||
Other Income and Expense | (13,453,051) | (2,368,242) | ||
Net Income from Discontinued Operations | (48,721,236) | (17,972,538) | ||
Changes in Assets and Liabilities: | ||||
Trade Receivables | (777,275,520) | (492,028,261) | ||
Other Receivables | (525,005,148) | 262,573,719 | ||
Inventories | (155,387,098) | (32,226,429) | ||
Other Assets | 1,874,208 | (1,392,643) | ||
Trade Payables and Other | 853,391,406 | 401,945,381 | ||
Taxes Payable | (151,456,551) | (66,564,610) | ||
Other Liabilities | 211,436,681 | 81,842,872 | ||
Provisions | (43,922,862) | (29,116,264) | ||
| Income Tax and Tax on Assets Payments | (797,845,124) | (217,137,140) | |
| ||||
| Net Cash Flows Provided by Operating Activities | 4,457,362,499 | 3,475,129,023 | |
| ||||
| CASH PROVIDED BY INVESTMENT ACTIVITIES | |||
| Acquisition of Property, Plant and Equipment, net | (2,749,697,669) | (1,941,618,055) | |
| Acquisition of Intangible Assets | (45,663,449) | (35,377,464) | |
| Payments for the Acquisition of Subsidiaries, Net of Cash Acquired and Contributions in Associates | (695,837,033) | (7,245,505) | |
| Call Option - Nextel | (789,102,688) | - | |
| Collection of Interest | 1,351,834 | 1,966,530 | |
| Proceeds from Sale of Property, Plant and Equipment | 14,741,050 | 6,402,291 | |
| Dividends Collected | 40,094,116 | 27,002,767 | |
| Transactions with Securities, Bonds and Other Financial Instruments, Net | (171,925,771) | (583,203,816) | |
| Collections of Certificates of Deposit | 211,196,549 | 385,728,693 | |
| ||||
| Net Cash Flows used in Investment Activities | (4,184,843,061) | (2,146,344,559) | |
| ||||
| CASH PROVIDED BY FINANCING ACTIVITIES | |||
| Loans | 1,215,962,573 | 834,739,108 | |
| Repayment of Loans and Issue Expenses | (827,713,530) | (1,596,131,678) | |
| Payment of Interest | (566,527,580) | (458,309,001) | |
| (Payments) / Collections on Financial Instruments, Net | (7,683,300) | 4,242,112 | |
| Payment of Dividends | (125,000,000) | (70,421,279) | |
| Reserve set-up and other | - | (11,428,240) | |
| Payments to Non-Controlling Interests, net | (186,657,634) | (126,702,437) | |
| ||||
| Net Cash Flows used in Financing Activities | (497,619,471) | (1,424,011,415) | |
| ||||
| FINANCING RESULTS GENERATED BY CASH AND CASH EQUIVALENTS | 407,742,762 | 112,033,549 | |
| ||||
| Net Increase in Cash Flow | 182,642,729 |
| 16,806,598 |
| Cash and Cash Equivalents at the Beginning of the Year | 1,717,383,640 |
| 1,650,463,169 |
| Effect in Cash from Disposal of Businesses for Sale | - |
| (21,666,553) |
| Cash and Cash Equivalents at the End of the Period | 1,900,026,369 |
| 1,645,603,214 |
| ||||