8th Nov 2013 12:00
Grupo Clarín announces its
Results for the Nine Months (9M13) and Third Quarter of 2013 (3Q13)
Buenos Aires, Argentina, November 8th, 2013 - 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 2013. Figures in this report have been prepared in accordance with International Financial Reporting Standards ("IFRS") as of September 30th, 2013 and are stated in Argentine Pesos, unless otherwise indicated.
Highlights (9M13 vs. 9M12):
§ Net Sales totaled Ps. 10,141.3 million, an increase of 24.6% from 9M12, 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.
§ Adjusted EBITDA (1) reached Ps. 2,303.5 million, an increase of 13.0% from 9M12, mainly driven by higher sales in the Cable and Internet access and Broadcasting and Programming segments.
§ Grupo Clarín's Adjusted EBITDA Margin (2) for 9M13 was 22.7%, compared to 25.0% in 9M12.
§ Net Income totaled Ps. 479.5 million, a decrease of 13.8% from the Ps. 556.5 million reported in 9M12, while the Net Income attributable to Equity Shareholders decreased 15.2% to Ps 267.5 million from Ps. 315.4 million.
FINANCIAL HIGHLIGHTS
(In millions of Ps.) | 9M13 | 9M12 | % Ch. | 3Q13 | 2Q13 | 3Q12 | QoQ | YoY |
Net Sales | 10,141.3 | 8,142.0 | 24.6% | 3,760.1 | 3,338.6 | 2,930.2 | 12.6% | 28.3% |
Adjusted EBITDA (1) | 2,303.5 | 2,039.3 | 13.0% | 890.9 | 718.1 | 711.8 | 24.1% | 25.2% |
Adjusted EBITDA Margin (2) | 22.7% | 25.0% | (9.3%) | 23.7% | 21.5% | 24.3% | 10.2% | (2.5%) |
Net Income(3) | 479.5 | 556.5 | (13.8%) | 280.6 | 103.0 | 156.3 | 172.6% | 79.6% |
Attributable to: | ||||||||
Equity Shareholders | 267.5 | 315.4 | (15.2%) | 183.8 | 48.4 | 89.1 | 280.1% | 106.3% |
Non-Controlling Interests | 212.0 | 241.0 | (12.0%) | 96.8 | 54.6 | 67.2 | 77.4% | 44.2% |
(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.
(3) We define Net Income as Income for the period.
Investor Relations Contacts | ||
In Buenos Aires: | In London: | In New York: |
Alfredo Marín Agustín Medina Manson | Alex Money Clare Gallagher | 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: [email protected] | E-mail: [email protected] | E-mail: [email protected]
|
Net sales reached Ps.10,141.3 million, an increase of 24.6% from Ps. 8,142.0 million in 9M12 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.
Following is a breakdown of Net Sales by business segment:
NET SALES
(In millions of Ps.) | 9M13 | 9M12 | YoY | 3Q13 | 2Q13 | 3Q12 | QoQ | YoY |
Cable TV and Internet Access | 7,018.3 | 5,510.3 | 27.4% | 2,541.1 | 2,296.8 | 1,946.1 | 10.6% | 30.6% |
Printing and Publishing | 1,906.8 | 1,721.8 | 10.7% | 668.5 | 649.1 | 597.4 | 3.0% | 11.9% |
Broadcasting and Programming | 1,280.8 | 981.0 | 30.6% | 580.2 | 409.6 | 417.1 | 41.6% | 39.1% |
Digital Content and Others | 351.2 | 266.0 | 32.0% | 122.9 | 118.4 | 92.0 | 3.8% | 33.6% |
Subtotal | 10,557.2 | 8,479.1 | 24.5% | 3,912.6 | 3,473.9 | 3,052.6 | 12.6% | 28.2% |
Eliminations | (415.9) | (337.2) | 23.3% | (152.5) | (135.3) | (122.4) | 12.7% | 24.6% |
Total | 10,141.3 | 8,142.0 | 24.6% | 3,760.1 | 3,338.6 | 2,930.2 | 12.6% | 28.3% |
Cost of sales (Excluding Depreciation and Amortization) reached Ps. 5,206.6 million, an increase of 26.1% from Ps. 4,130.4 million reported for 9M12 due to higher costs in our business segments, mainly in Cable TV and Internet access and in Printing and Publishing.
Selling and Administrative Expenses(Excluding Depreciation and Amortization) reached Ps. 2,631.2 million, an increase of 33.4% from Ps. 1,972.2 million in 9M12. This increase was mainly due to higher costs in the Cable TV and Internet access and Printing and Publishing segments.
Adjusted EBITDA reached Ps.2,303.5 million, an increase of 13.0% from Ps. 2,039.3 million reported for9M12, driven by higher sales in the Cable TV and Internet access and Broadcasting and Programming segments, and mainly due to margin expansion in Broadcasting and Programming segment; although was partially offset by a lower EBITDA in the Printing and Publishing segment.
Following is a breakdown of adjusted EBITDA by business segment:
ADJUSTED EBITDA
(In millions of Ps.) | 9M13 | 9M12 | YoY | 3Q13 | 2Q13 | 3Q12 | QoQ | YoY |
Cable TV and Internet access | 2,050.4 | 1,833.1 | 11.9% | 712.1 | 649.9 | 621.0 | 9.6% | 14.7% |
Printing and Publishing | 31.7 | 157.5 | (79.8%) | 18.6 | 8.6 | 46.1 | 116.0% | (59.6%) |
Broadcasting and Programming | 212.0 | 41.8 | 406.6% | 159.8 | 57.2 | 45.2 | 179.6% | 253.9% |
Digital Content and Others | 9.4 | 6.9 | 36.8% | 0.4 | 2.4 | (0.5) | (84.5%) | (171.8%) |
Subtotal | 2,303.5 | 2,039.3 | 13.0% | 890.9 | 718.1 | 711.8 | 24.1% | 25.2% |
Eliminations | - | - | NA | - | - | - | NA | NA |
Total | 2,303.5 | 2,039.3 | 13.0% | 890.9 | 718.1 | 711.8 | 24.1% | 25.2% |
Financial results net totaled Ps. (912.3) million compared to Ps. (592.8)million for 9M12. The increase was mainly due to higher interest expenses and peso depreciation during 9M13, which went from Ps 4.92 per dollar at the end of December 2012, to Ps 5.79 per dollar as of September 30th, 2013.
Equity in earnings from unconsolidated affiliates in 9M13 totaled Ps. 92.9 million, compared to Ps. 18.4 million for 9M12.
Other Income (expenses), netreached Ps.16.2 million, compared to Ps. 1.8 million in 9M12.
Income tax as of September 2013 reached Ps. (205.4) million, from Ps. (309.3) million in September 2012.
Income from Discontinued Operations, reached Ps. 50.0 million in 9M12.
Net income totaled Ps. 479.5 million, a decrease of 13.8% from Ps. 556.5 million reported for 9M12. This was mainly a consequence of higher EBITDA in the Cable TV and Internet access and Broadcasting and Programming segments, and was partially offset by a lower EBITDA in the Printing and Publishing segment and by the peso depreciation. The Equity Shareholders Net Income amounted to Ps.267.5million, a decrease of 15.2% compared with September 2012.
Cash used in acquisitions of property, plant and equipment (CAPEX) totaled Ps. 1,326.8 million in 9M13, an increase of 36.6% from Ps. 971.5 million reported for 9M12. Out of the total CAPEX in 9M13, 95.3% was allocated to the Cable TV and Internet access segment, 2.1% to the Digital Content and Others segment remaining 3.6% 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, 2013 was 0.99x and the Net Debt at the end of this period totaled Ps. 2,149.3 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 2013
(In millions of Ps.) | Cable TV & Internet access | Printing & Publishing | Broadcasting & Programming | Digital Content & Others | Eliminations | Total | % |
Advertising | 54.6 | 859.9 | 922.4 | 37.7 | (80.6) | 1,794.0 | 17.7% |
Circulation | - | 810.2 | - | - | - | 810.2 | 8.0% |
Printing | - | 161.7 | - | - | (36.5) | 125.2 | 1.2% |
Video Subscriptions | 5,320.6 | - | - | - | - | 5,320.6 | 52.5% |
Internet Subscriptions | 1,388.4 | - | - | - | (5.8) | 1,382.6 | 13.6% |
Programming | - | - | 237.4 | - | (62.5) | 174.9 | 1.7% |
Other Sales
| 254.8 | 74.9 | 121.0 | 313.5 | (230.4) | 533.8 | 5.3% |
Total Sales | 7,018.3 | 1,906.8 | 1,280.8 | 351.2 | (415.9) | 10,141.3 | 100.0% |
SALES BREAKDOWN BY SOURCE OF REVENUE - SEPTEMBER 2012
(In millions of Ps.) | Cable TV & Internet access | Printing & Publishing | Broadcasting & Programming | Digital Content & Others | Eliminations | Total | % |
Advertising | 37.0 | 886.0 | 713.3 | 33.9 | (80.0) | 1,590.3 | 19.5% |
Circulation | - | 654.8 | - | - | - | 654.8 | 8.0% |
Printing | - | 118.2 | - | - | (31.2) | 87.0 | 1.1% |
Video Subscriptions | 4,143.4 | - | - | - | - | 4,143.4 | 50.9% |
Internet Subscriptions | 1,163.3 | - | - | - | (5.2) | 1,158.1 | 14.2% |
Programming | - | - | 174.1 | - | (51.3) | 122.8 | 1.5% |
Other Sales
| 166.6 | 62.8 | 93.5 | 232.1 | (169.5) | 385.5 | 4.7% |
Total Sales | 5,510.3 | 1,721.8 | 981.0 | 266.0 | (337.2) | 8,142.0 | 100.0% |
CABLE TV AND INTERNET ACCESS
Net Sales
Net sales increased by 27.4%to Ps. 7,018.3 million for 9M13 compared to Ps. 5,510.3 million for 9M12. 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 3,488,668 as of September 2013, compared to the 3,421,851(*) reported for the same date in 2012. Internet subscribers reached 1,680,827 in September 2013, compared to the 1,461,123(*) of September 2012.
Cost of Sales(Excluding Depreciation and Amortization)
Cost of sales (excluding depreciation and amortization) increased by 33.2% to Ps. 3,173.5 million for September 2013, compared to Ps. 2,383.2 million in September 2012. This was mainly due to higher salaries, programming costs and network expenses and fixed assets maintenance costs and taxes, duties and contributions.
(*) Total Consolidated Cable TV and Internet subscribers do not include those from discontinued operations in Paraguay (122,914 Cable TV subs and 13,654 internet subscribers, registered for the period ended in September 2012).
Selling and Administrative Expenses (Excluding Depreciation and Amortization)
Selling and administrative expenses (excluding depreciation and amortization) increased by 38.7% to Ps. 1,794.5 million for 9M13, compared to Ps. 1,294.1 million reported in 9M12. This increase was driven by higher salaries, fees for services, taxes, duties and contributions and marketing expenses.
Depreciation and Amortization
Depreciation and amortization expenses increased by 29.6% to Ps. 740.9 million for 9M13 from Ps. 571.5 million reported in 9M12.
PRINTING AND PUBLISHING
Net Sales
The 10.7% increase of Net Sales to Ps. 1,906.8 million in 9M13 was the result of higher sales in circulation and printing services revenues, although it was partially offset by lower advertising revenues.
Cost of Sales(Excluding Depreciation and Amortization)
Cost of sales (excluding depreciation and amortization) increased by 18.5% to Ps. 1,204.4 million in 9M13, compared to Ps. 1,016.1 million in 9M12. The increase was mainly the result of higher salaries, printing costs and cost of the goods sold.
Selling and Administrative Expenses (Excluding Depreciation and Amortization)
Selling and administrative expenses (excluding depreciation and amortization) increased by 22.3% to Ps. 670.6 million in 9M13, compared to the Ps. 548.2 million reported for 9M12. This was primarily the result of higher salaries, fees for services, distributing costs and marketing expenses.
Depreciation and Amortization
Depreciation and amortization expenses decreased by 16.8% to Ps. 37.7 million in 9M13 compared to Ps. 45.3 million in 9M12.
BROADCASTING AND PROGRAMMING
Net Sales
Net sales increased by 30.6% to Ps. 1,280.8 million in 9M13, compared to Ps. 981.0 million in 9M12. The increase was primarily the result of higher advertising sales related to Canal Trece and Radio Mitre, programming content and our racing car business.
Cost of Sales(Excluding Depreciation and Amortization)
Cost of sales (excluding depreciation and amortization) increased by 11.2% to Ps. 819.8 million in 9M13, compared to Ps. 737.1 million in 9M12. This is attributable mainly to higher salaries and taxes, duties and contributions; though was partially offset by lower production and programming costs.
Selling and Administrative Expenses (Excluding Depreciation and Amortization)
Selling and administrative expenses (excluding depreciation and amortization) increased by 23.2% to Ps. 249.0 million in 9M13, compared to Ps. 202.1 million in 9M12. The increase was primarily the result of higher salaries and the allowances for contingencies.
Depreciation and Amortization
Depreciation and amortization expenses increased by 4.2% to Ps. 28.0 million in 9M13 compared to Ps. 26.9 million reported in 9M12.
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 32.0% to 351.2, from Ps. 266.0 million reported in 9M12, due to higher sales in digital content, Gestión Compartida and fees at Grupo Clarín. EBITDA resulted in Ps. 9.4 million.
OPERATING STATISTICS BY BUSINESS SEGMENT
CABLE TV AND INTERNET ACCESS
9M13 | 9M12 | YoY | 3Q13 | 2Q13 | 3Q12 | QoQ | YoY | |||||||||
Homes Passed (1) | 7,506.7 | 7,590.8 | (1.1%) | 7,506.7 | 7,455.8 | 7,590.8 | 0.7% | (1.1%) |
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Bidirectional Homes Passed | 65.3% | 63.7% | 2.5% | 65.3% | 64.5% | 63.7% | 1.3% | 2.5% |
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Cable TV |
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Total Consolidated Subscribers (1)(3) | 3,488.7 | 3,544.8 | (1.6%) | 3,488.7 | 3,452.0 | 3,544.8 | 1.1% | (1.6%) |
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Subscribers - Argentina | 3,364.9 | 3,305.6 | 1.8% | 3,364.9 | 3,329.9 | 3,305.6 | 1.1% | 1.8% |
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Subscribers - International | 123.8 | 239.1 | (48.3%) | 123.8 | 122.1 | 239.1 | 1.3% | (48.3%) |
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Uruguay | 123.8 | 116.2 | 6.5% | 123.8 | 122.1 | 116.2 | 1.3% | 6.5% |
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Paraguay | - | 122.9 | (100.0%) | - | - | 122.9 | NA | (100.0%) |
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% over Homes Passed | 46.5% | 46.7% | (0.5%) | 46.5% | 46.3% | 46.7% | 0.4% | (0.5%) |
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Total Equity Subscribers(5) | 3,612.9 | 3,623.7 | (0.3%) | 3,612.9 | 3,574.3 | 3,623.7 | 1.1% | (0.3%) |
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Churn Rate % | 15.1% | 14.6% | 3.3% | 14.1% | 14.1% | 13.4% | (0.1%) | 5.3% |
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Digital Video (1)(3) |
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Digital Ready Pay TV Subs | 2,761.0 | 2,817.3 | (2.0%) | 2,761.0 | 2,727.7 | 2,817.3 | 1.2% | (2.0%) |
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Total Digital Decoders | 1,239.2 | 1,185.6 | 4.5% | 1,239.2 | 1,199.3 | 1,185.6 | 3.3% | 4.5% |
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Argentina | 1,101.3 | 944.4 | 16.6% | 1,101.3 | 1,068.3 | 944.4 | 3.1% | 16.6% |
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International | 137.8 | 241.2 | (42.9%) | 137.8 | 130.9 | 241.2 | 5.3% | (42.9%) |
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Penetration over Digital Ready TV Subs | 44.9% | 42.1% | 6.6% | 44.9% | 44.0% | 42.1% | 2.1% | 6.6% |
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Internet Subscribers(1)(3)(4) |
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Total Internet Subscribers (1)(4) | 1,680.8 | 1,490.9 | 12.7% | 1,680.8 | 1,616.4 | 1,490.9 | 4.0% | 12.7% |
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Cablemodem(1) | 1,668.0 | 1,474.8 | 13.1% | 1,668.0 | 1,603.0 | 1,474.8 | 4.1% | 13.1% |
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ADSL(1) | 6.8 | 9.2 | (26.1%) | 6.8 | 7.3 | 9.2 | (6.8%) | (26.1%) |
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Dial Up (1) | 6.0 | 6.9 | (13.2%) | 6.0 | 6.1 | 6.9 | (2.1%) | (13.2%) |
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% over Bidirectional Homes Passed | 34.3% | 30.8% | 11.2% | 34.3% | 33.6% | 30.8% | 1.9% | 11.2% |
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Total ARPU(2) | 226.3 | 180.2 | 25.6% | 244.1 | 223.2 | 190.4 | 9.3% | 28.2% |
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(1) Figures in thousands
(2) Net Sales/ Average Pay TV Subscribers (does not include subscribers from discontinued operations in Paraguay).
(3) Total subscribers consolidated following the same consolidation methods used in the financial statements as of each year end.
(4) Total Internet Subscribers includes those from discontinued operations in Paraguay (13,654 subs for period 9M12 and 3Q12)
(5) Total subscribers considering the equity share in each subsidiary.
PRINTING AND PUBLISHING
9M13 | 9M12 | YoY | 3Q13 | 2Q13 | 3Q12 | QoQ | YoY | |
Circulation (1) | 300.2 | 314.9 | (4.7%) | 291.0 | 305.3 | 308.4 | (4.7%) | (5.6%) |
Circulation share % (2) | 38.6% | 38.6% | (0.1%) | 38.3% | 38.8% | 38.2% | (1.4%) | 0.1% |
Advertising share %(3) | 52.0% | 50.6% | 2.7% | 52.0% | 51.5% | 49.8% | 1.1% | 4.4% |
(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
9M13 | 9M12 | YoY | 3Q13 | 2Q13 | 3Q12 | QoQ | YoY | |
Advertising Share % (1) | 32.6% | 36.2% | (9.8%) | 33.9% | 31.3% | 37.9% | 8.3% | (10.5%) |
Audience Share % (2) | ||||||||
Prime Time | 35.5% | 36.5% | (2.6%) | 36.6% | 33.9% | 35.4% | 7.8% | 3.2% |
Total Time | 28.2% | 29.6% | (4.8%) | 29.0% | 27.7% | 28.8% | 4.5% | 0.5% |
(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
9M13 | 9M12 | YoY | |
Page Views (1) | 722.1 | 628.3 | 14.9% |
Unique Visitors(1) | 37.3 | 27.8 | 34.3% |
(1)In millions. Average. Source IAB and Company Estimates.
DEBT AND LIQUIDITY
(In millions of Ps.) | September 13 | September 12 | % Change | June 13 | % Change |
Short Term and Long Term Debt | |||||
Current Financial Debt | 1,149.1 | 643.9 | 78.5% | 962.2 | 19.4% |
Financial loans | 30.8 | 200.2 | (84.6%) | 41.7 | (26.1%) |
Negotiable obligations | 888.1 | 282.0 | 214.9% | 652.1 | 36.2% |
Accrued interest | 44.7 | 41.9 | 6.7% | 98.2 | (54.5%) |
Acquisition of equipment | 82.2 | 59.1 | 39.1% | 86.5 | (5.0%) |
Sellers Financing Capital | 3.8 | 1.1 | 254.5% | 1.6 | 130.2% |
Sellers Financing accrued interest | - | - | NA | - | NA |
Related Parties Capital | 7.2 | 3.4 | 111.9% | 6.3 | 14.5% |
Related Parties accrued interest | 0.8 | 0.0 | 3,356.2% | 0.6 | 47.6% |
Bank overdraft | 91.6 | 56.3 | 62.7% | 75.2 | 21.9% |
Non-Current Financial Debt | 2,389.8 | 2,752.2 | (13.2%) | 2,465.9 | (3.1%) |
Financial loans | 41.6 | 36.2 | 14.7% | 30.1 | 38.2% |
Negotiable obligations | 2,248.4 | 2,588.8 | (13.2%) | 2,330.2 | (3.5%) |
Accrued interest | - | - | NA | - | NA |
Acquisition of equipment | 93.6 | 121.2 | (22.8%) | 99.5 | (5.9%) |
Sellers Financing Capital | - | 0.3 | (100.0%) | - | NA |
Sellers Financing accrued interest | - | - | NA | - | NA |
Related Parties Capital | 4.2 | 4.2 | - | 4.2 | - |
Related accrued interest | 2.0 | 1.4 | 45.8% | 1.9 | 8.6% |
Bank overdraft | - | - | NA | - | NA |
Total Financial Debt (A) | 3,538.9 | 3,396.1 | 4.2% | 3,428.1 | 3.2% |
Measurement at fair Value | (42.2) | (49.6) | 14.8% | (44.3) | 4.6% |
Total Short Term and Long Term Debt | 3,496.7 | 3,346.5 | 4.5% | 3,383.8 | 3.3% |
Cash and Cash Equivalents (B) | 1,389.6 | 1,013.2 | 37.2% | 1,166.9 | 19.1% |
Net Debt (A) - (B) | 2,149.3 | 2,382.9 | (9.8%) | 2,261.2 | (4.9%) |
Net Debt/Adjusted Ebitda (1) | 0.60x | 0.84x | (27.9%) | 0.79x | (23.4%) |
% USD Debt | 96.2% | 95.1% | 1.2% | 96.5% | (0.3%) |
% Ar. Ps Debt | 3.8% | 4.9% | (22.4%) | 3.5% | 8.6% |
Total Financial Debt(1) increased from Ps. 3,396.1 million to Ps. 3,538.9 million and Net Debt decreased from Ps. 2,382.9 million to Ps. 2,149.3 million respectively. This represents an increase of 4.2% in the Total Debt and a decrease of 9.8% in the Net Debt.
Debt coverage ratio (1) as of September 31th, 2013 was 0.6x in the case of Net Debt and of 0.99x 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
NEW MEDIA LAW AND VOLUNTARY CONFORMING PROPOSAL
On 29 October 2013, Grupo Clarín S.A. informed the Argentine Securities Commission, the Buenos Aires Stock Exchange and the London Stock Exchange that the Argentine Supreme Court ruled that the Audiovisual Communication Services Law No. 26,522 is constitutional.
On 4 November 2013, the Company also informed that it had filed in the Audiovisual Communication Services Law Federal Enforcement Authority ("AFSCA") a Voluntary Conforming Proposal pursuant to the implementing regulations of Section 161 of the Audiovisual Communication Services Law, set forth under Decree No. 1225/2010 and Chapter I of Annex I of Resolution No. 297/AFSCA/2010.
The Voluntary Conforming Plan proposal is summarized as follows: Grupo Clarín structure reached by the New Media Law will be divided into six units of audiovisual communication services. Each one of the units of audiovisual communication services will have no corporate relationship with the others. This way, each will conform individually to the provisions of Sections 45 and 46 of the Audiovisual Communication Services Law and its regulations, and will be divided according to the following detail:
Unit I: composed by (a) Arte Radiotelevisivo Argentino S.A., owner of the signal of Canal 13 of Buenos Aires and the news signal TN (Todo Noticias). Arte Radiotelevisivo Argentino S.A. will also maintain its participation in (i) Telecor SACI, holder of the license of Canal 12 of Córdoba, and (ii) Bariloche TV S.A., holder of the license of Canal 6 of Bariloche. (b) Radio Mitre S.A., which will maintain the frequencies AM 790 and FM 100 in Buenos Aires, AM 810 and FM 102.9 in Córdoba, and FM 100.3 in Mendoza; and (c) certain assets, liabilities, rights and obligations to be spun off from Cablevisión, which will include 24 local licenses for physical link subscription television, in cities where there is no incompatibility with broadcast TV.
Unit II: composed by the surviving Cablevisión with all the assets, liabilities, rights and obligations that are not spun off from Cablevisión S.A. This company will comprise 24 licenses for physical link subscription television.
Unit III: composed by spun off Cablevisión 2, which will comprise assets, rights and obligations spun off from Cablevisión S.A., including 18 licenses for physical link subscription television and 1 license for radio-electric link subscription television.
Unit IV: (a) composed by Inversora de Eventos S.A., owner of the signals TyC Sports and TyC Max; (b) the signals El 13 Satelital, Magazine, Volver, Quiero Música en mi Idioma, Canal Rural and Metro-the latter involves only the registration for its commercialisation-
Unit V: integrated by an individual or legal entity that will not maintain a corporate relationship with Radio Mitre S.A., its controlling companies, subsidiaries and/or controlled companies, and which shall hold: (a) one sound frequency modulation broadcasting service for the City of Tucumán-FM 99.5 (b) one sound frequency modulation broadcasting service for the City of San Carlos de Bariloche-FM 92.1 (c) one sound frequency modulation broadcasting service for the City of Santa Fe-FM 99.3-and (d) sound frequency modulation broadcasting service for the City of Bahía Blanca FM 96.5
Unit VI: integrated by an individual or legal entity that will not maintain a corporate relationship with Arte Radiotelevisivo Argentino S.A. its controlling companies, subsidiaries and/or controlled companies, and which shall hold one broadcast television license for the City of Bahía Blanca, Province of Buenos Aires-LU81 TV Canal 7-and a minority interest in Cuyo Televisión S.A. owner of a broadcast television license in Mendoza-LV83 TV Canal 9 Mendoza-.
The Company will continue to own, directly or indirectly, only one of the audiovisual communication service Units of the six that were described above.
A Spanish version of the Proposal is available in IR Grupo Clarín website (www.grupoclarin.com/ir).
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)
| 18.45 |
GCLA (LSE) Price per GDS (USD) | 4.10 |
Total Shares | 287,418,584 |
Total GDSs | 143,709,292 |
Market Value (USD MM) | 589.2 |
Closing Price | November 7th, 2013 |
CONFERENCE CALL AND WEBCAST INFORMATION
Grupo Clarín will host a conference call and webcast to discuss its Third Quarter Results for 2013, on Friday, November 8th, 2013.
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 (0) 800-092-3582 toll free from the U.K., 1 (800) 311-9404 toll free from the U.S., (0800) 333-0050 from Argentina, or 1 (334) 323-7224 from all other countries, 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.
A replay of the conference call will be available one hour after its conclusion, and will remain available for two weeks. To access the replay, please dial from the within the U.S. +1-877-919-4059, or from anywhere outside the U.S. +1-334-323-7226. The passcode is: 72116165.
The PDF version of the webcast presentation will be available at http://www.grupoclarin.com.ar/ir prior to the call, on November 8th, and archived in our Website after its conclusion.
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, 2013 AND 2012,AND FOR THE THREE-MONTH PERIODS BEGINNING ON JULY 1 AND ENDED ON SEPTEMBER 30, 2013 AND 2012
In Argentine Pesos (Ps.)
September 30, 2013 | September 30, 2012 | July 1, 2013 through September 30, 2013 | July 1, 2012 through September 30, 2012 | |||||
Continuing Operations | ||||||||
Revenues | 10,141,275,207 | 8,141,957,229 | 3,760,146,147 | 2,930,159,950 | ||||
Cost of Sales (1) | (5,955,586,135) | (4,722,747,143) | (2,186,661,782) | (1,701,805,109) | ||||
Subtotal - Gross Profit | 4,185,689,072 | 3,419,210,086 | 1,573,484,365 | 1,228,354,841 | ||||
Selling Expenses (1) | (1,320,765,303) | (965,698,471) | (469,770,206) | (361,340,521) | ||||
Administrative Expenses (1) | (1,376,915,110) | (1,065,194,534) | (495,256,628) | (379,622,927) | ||||
Other Income and Expense, net | 16,184,422 | 1,784,467 | 13,194,242 | (1,973,791) | ||||
Financial Costs | (840,236,135) | (517,495,682) | (347,127,571) | (194,878,444) | ||||
Other Financial Results, net | (72,059,586) | (75,266,410) | 900,928 | (50,499,427) | ||||
Financial Results | (912,295,721) | (592,762,092) | (346,226,643) | (245,377,871) | ||||
Equity in Earnings from Affiliates and Subsidiaries | 92,926,975 | 18,423,945 | 85,506,631 | 2,615,502 | ||||
Income before Income Tax and Tax on Assets | 684,824,335 | 815,763,401 | 360,931,761 | 242,655,233 | ||||
Income Tax and Tax on Assets | (205,359,154) | (309,263,415) | (80,310,110) | (100,055,201) | ||||
Income for the period from continuing operations | 479,465,181 | 506,499,986 | 280,621,651 | 142,600,032 | ||||
Discontinued Operations | ||||||||
Income/Loss from Discontinued Operations | - | 49,966,211 | - | 13,676,969 | ||||
Income for the period | 479,465,181 | 556,466,197 | 280,621,651 | 156,277,001 | ||||
Other Comprehensive Income | ||||||||
Items which may be reclassified to net income | ||||||||
Variation in Translation Differences of Foreign Operations from Continuing Operations | 173,564,013 | 73,725,293 | 115,513,498 | 41,969,970 | ||||
Variation in Translation Differences of Foreign Operations from Discontinued Operations | - | 1,473,771 | - | 827,760 | ||||
Other Comprehensive Income for the period | 173,564,013 | 75,199,064 | 115,513,498 | 42,797,730 | ||||
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 653,029,194 | 631,665,261 | 396,135,149 | 199,074,731 | ||||
Profit Attributable to: | ||||||||
Shareholders of the Parent Company | 267,471,133 | 315,448,727 | 183,774,698 | 89,095,825 | ||||
Non-Controlling Interests | 211,994,048 | 241,017,470 | 96,846,953 | 67,181,176 | ||||
Total Comprehensive Income Attributable to: | ||||||||
Shareholders of the Parent Company | 357,566,875 | 351,123,695 | 243,271,422 | 108,924,624 | ||||
Non-Controlling Interests | 295,462,319 | 280,541,566 | 152,863,727 | 90,150,107 | ||||
Basic and Diluted Earnings per Share from Continuing Operations | 0.93 | 1.02 | 0.64 | 0.29 | ||||
Basic and Diluted Earnings per Share from Discontinued Operations | - | 0.08 | - | 0.02 | ||||
Basic and Diluted Earnings per Share - Total | 0.93 | 1.10 | 0.64 | 0.31 | ||||
The Consolidated Statements of Operations for each business segment are included in the Financial Statements as of September 30th, 2013, available at http://www.grupoclarin.com/ir.
GRUPO CLARÍN S.A.
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2013 AND DECEMBER 31, 2012
In Argentine Pesos (Ps.)
September 30, 2013 | December 31, 2012 | |||
ASSETS | ||||
NON-CURRENT ASSETS | ||||
Property, Plant and Equipment | 4,812,166,038 | 4,137,741,603 | ||
Intangible Assets | 478,103,316 | 554,781,161 | ||
Goodwill | 2,843,439,872 | 2,797,020,692 | ||
Deferred Tax Assets | 104,570,889 | 55,403,579 | ||
Investment in Affiliates and Subsidiaries | 368,120,939 | 389,212,589 | ||
Other Investments | 124,662,824 | 99,597,125 | ||
Inventories | 17,812,167 | 13,929,652 | ||
Other Assets | 1,671,066 | 1,896,642 | ||
Other Receivables | 123,364,394 | 128,770,432 | ||
Trade Receivables | 133,887,937 | 125,285,473 | ||
Total Non-Current Assets | 9,007,799,442 | 8,303,638,948 | ||
CURRENT ASSETS | ||||
Inventories | 269,118,305 | 342,773,949 | ||
Other Assets | 8,225,309 | 7,362,757 | ||
Other Receivables | 550,001,311 | 402,265,693 | ||
Trade Receivables | 1,829,140,236 | 1,638,550,031 | ||
Other Investments | 517,424,377 | 685,632,591 | ||
Cash and Banks | 872,220,894 | 623,395,314 | ||
Total Current Assets | 4,046,130,432 | 3,699,980,335 | ||
Total Assets | 13,053,929,874 | 12,003,619,283 | ||
EQUITY (as per the corresponding statement) | ||||
Attributable to Shareholders of the Parent Company | 4,447,596,987 | 4,090,030,112 | ||
Attributable to Non-Controlling Interests | 1,571,319,987 | 1,374,568,933 | ||
Total Shareholders' Equity | 6,018,916,974 | 5,464,599,045 | ||
LIABILITIES | ||||
NON-CURRENT LIABILITIES | ||||
Accruals and Other | 256,354,841 | 251,107,396 | ||
Long-Term Debt | 2,346,737,634 | 2,683,294,222 | ||
Sellers Financing | - | 325,330 | ||
Deferred Tax Liabilities | 223,950,680 | 261,847,892 | ||
Taxes Payable | 110,959,495 | 74,910,041 | ||
Other Liabilities | 133,991,856 | 101,320,147 | ||
Trade Payables and Other | 5,692,062 | 5,888,626 | ||
Total Non-Current Liabilities | 3,077,686,568 | 3,378,693,654 | ||
CURRENT LIABILITIES | ||||
Long-Term Debt | 1,146,212,783 | 504,084,669 | ||
Sellers Financing | 3,756,143 | 1,103,888 | ||
Taxes Payable | 292,114,520 | 411,769,236 | ||
Other Liabilities | 226,146,565 | 214,245,125 | ||
Trade Payables and Other | 2,289,096,321 | 2,029,123,666 | ||
Total Current Liabilities | 3,957,326,332 | 3,160,326,584 | ||
Total Liabilities | 7,035,012,900 | 6,539,020,238 | ||
Total Equity and Liabilities | 13,053,929,874 | 12,003,619,283 |
GRUPO CLARÍN S.A.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2013 AND 2012
In Argentine Pesos (Ps.)
Equity attributable to Shareholders of the Parent Company | 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 1, 2013 | 287,418,584 | 309,885,253 | 1,413,334,666 | 2,010,638,503 | 122,978,415 | 5,207,274 | 88,652,667 | 1,381,400,655 | 481,152,598 | 4,090,030,112 | 1,374,568,933 | 5,464,599,045 | ||||
Set-up of reserves (Note 10.a.) | - | - | - | - | - | - | 24,057,630 | 457,094,968 | (481,152,598) | - | - | - | ||||
Dividends and Other Movements of Non-Controlling Interest | - | - | - | - | - | - | - | - | - | - | (98,711,265) | (98,711,265) | ||||
Income for the period | - | - | - | - | - | - | - | - | 267,471,133 | 267,471,133 | 211,994,048 | 479,465,181 | ||||
Other Comprehensive Income: | ||||||||||||||||
Variation in Translation Differences of Foreign Operations | - | - | - | - | 90,095,742 | - | - | - | - | 90,095,742 | 83,468,271 | 173,564,013 | ||||
Balances as of September 30, 2013 | 287,418,584 | 309,885,253 | 1,413,334,666 | 2,010,638,503 | 213,074,157 | 5,207,274 | 112,710,297 | 1,838,495,623 | 267,471,133 | 4,447,596,987 | 1,571,319,987 | 6,018,916,974 | ||||
Balances as of January 1, 2012 | 287,418,584 | 309,885,253 | 1,413,334,666 | 2,010,638,503 | 37,992,937 | (18,384,533) | 64,740,233 | - | 1,539,154,967 | 3,634,142,107 | 1,063,645,779 | 4,697,787,886 | ||||
Set-up of reserves | - | - | - | - | - | - | 23,912,434 | 1,381,400,655 | (1,405,313,089) | - | - | - | ||||
Dividend Distribution | - | - | - | - | - | - | - | - | (135,000,000) | (135,000,000) | - | (135,000,000) | ||||
Dividends and Other Movements of Non-Controlling Interest | - | - | - | - | - | - | - | - | - | - | (92,880,389) | (92,880,389) | ||||
Income for the period | - | - | - | - | - | - | - | - | 315,448,727 | 315,448,727 | 241,017,470 | 556,466,197 | ||||
Other Comprehensive Income: | ||||||||||||||||
Variation in Translation Differences of Foreign Operations | - | - | - | - | 35,674,968 | - | - | - | - | 35,674,968 | 39,524,096 | 75,199,064 | ||||
Balances as of September 30, 2012 | 287,418,584 | 309,885,253 | 1,413,334,666 | 2,010,638,503 | 73,667,905 | (18,384,533) | 88,652,667 | 1,381,400,655 | 314,290,605 | 3,850,265,802 | 1,251,306,956 | 5,101,572,758 | ||||
(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. 457,094,968.
GRUPO CLARÍN S.A.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2013 AND 2012
In Argentine Pesos (Ps.)
September 30, 2013 | September 30, 2012 | |||
CASH PROVIDED BY OPERATING ACTIVITIES | ||||
Income for the period | 479,465,181 | 556,466,197 | ||
Income Tax and Tax on Assets | 205,359,154 | 309,263,415 | ||
Accrued Interest, net | 214,939,107 | 199,644,279 | ||
Adjustments to reconcile net income for the period to cash provided by operating activities: | ||||
Depreciation of Property, Plant and Equipment | 690,694,090 | 545,074,773 | ||
Amortization of Intangible Assets and Film Library | 124,792,173 | 105,944,397 | ||
Net of allowances | 163,118,901 | 87,677,549 | ||
Financial Results | 490,873,114 | 322,294,384 | ||
Equity in Earnings from Affiliates and Subsidiaries | (92,926,975) | (18,423,945) | ||
Other Income and Expense | (48,816) | (3,110,925) | ||
Income/Loss from Discontinued Operations | - | 32,461,124 | ||
Changes in Assets and Liabilities: | ||||
Trade Receivables | (281,333,418) | (264,201,238) | ||
Other Receivables | (10,493,411) | 35,460,810 | ||
Inventories | 67,919,483 | (41,593,770) | ||
Other Assets | (849,977) | 5,558,202 | ||
Trade Payables and Other | 240,240,529 | 156,700,688 | ||
Taxes Payable | (81,570,938) | (93,220,435) | ||
Other Liabilities | 30,921,499 | 46,250,701 | ||
| Provisions | (63,750,673) | (26,060,473) | |
| Income Tax and Tax on Assets Payments | (312,374,596) | (272,251,991) | |
| ||||
| Net Cash Flows Provided by Operating Activities | 1,864,974,427 | 1,683,933,742 | |
| ||||
| CASH PROVIDED BY INVESTMENT ACTIVITIES | |||
| Acquisition of Property, Plant and Equipment, net | (1,326,757,336) | (971,481,955) | |
| Acquisition of Intangible Assets | (44,663,297) | (31,773,693) | |
| Acquisition of Subsidiaries, Net of Cash Acquired | (2,113,981) | (11,506,938) | |
| Collection of Interest | 10,084,652 | - | |
| Proceeds from Sale of Property, Plant and Equipment | 1,024,476 | 3,121,715 | |
| Dividends collected | 28,448,387 | 624,990 | |
| Loans granted | (7,416,658) | (1,586,753) | |
| Certificates of Deposit | (56,398,605) | (4,848,000) | |
| Collections of Certificates of Deposit | 3,475,540 | 15,363,727 | |
| ||||
| Net Cash Flows used in Investment Activities | (1,394,316,822) | (1,002,086,907) | |
| ||||
| CASH PROVIDED BY FINANCING ACTIVITIES | |||
| Loans | 117,791,421 | 117,913,446 | |
| Repayment of Loans and Holding Expenses | (335,876,830) | (184,090,190) | |
| Payment of Interest | (295,065,967) | (270,300,709) | |
| Payments on Derivatives, Net | (4,680,000) | (6,177,500) | |
| Payment of Sellers Financing | (839,560) | (6,666,392) | |
| Dividends Paid | - | (118,854,787) | |
| Partial prepayment of investments for the purchase of Notes from Subsidiaries | 67,182,254 | - | |
| Reserve set-up | (7,390,200) | (6,520,985) | |
| Payments to Non-Controlling Interests, net | (104,352,106) | (92,004,628) | |
| ||||
| Net Cash Flows used in Financing Activities | (563,230,988) | (566,701,745) | |
| ||||
| FINANCING RESULTS GENERATED BY CASH AND CASH EQUIVALENTS | 116,245,498 | 41,482,873 | |
| ||||
| Net Increase in Cash Flow | 23,672,115 |
| 156,627,963 |
| Cash and Cash Equivalents at the Beginning of the Year | 1,304,735,665 |
| 865,580,054 |
| Effect of Decrease in Cash from Disposal of Businesses for Sale | - |
| (12,960,031) |
| Cash and Cash Equivalents at the End of the Period | 1,328,407,780 |
| 1,009,247,986 |
| ||||
Related Shares:
GCLA.L