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PRISA: FY2020 RESULTS (ANÁLISIS BANCO SABADELL)

4Q'20 vs. 4Q'19 Results:
Sales: € 206.0 M (-31.0% vs. -24.5% BS(e) and -24.3% consensus);
EBITDA: € 40.6 M (-47.1% vs. -45.3% BS(e) and -46.3% consensus);
Net Profit: € 299.0 M (€ -71.9 M in FY2019);
FY2020 vs. FY2019 Results:
Sales: € 700.6 M (-36.0% vs. -34.3% BS(e) and -34.2% consensus);
EBITDA: € 63.9 M (-73.6% vs. -72.5% BS(e) and -72.8% consensus);
Net Profit: € 89.7 M (€ -182.3 M in FY2019);

The results were weak, hit by Covid-19 and below expectations in sales (due to Santillana in view of the lack of public projects and the school closures), but in line in EBITDA, with a positive impact on Net Profit thanks to the capital gains from the sale of Santillana Spain (expected, € 377 M). The 4Q’20 sales fell -34.7% (vs. -28.5% BS(e)), with Santillana dropping -48.3% (vs. -37.4% BS(e)), Radio -17.6% (vs. -17.3% BS(e)) and Written Press -11.5% (vs. -17.1% BS(e)). 4Q’20 EBITDA reached € 40.6 M (-56.8%, in line with expectations), leaving EBITDA’20 at € 63.9 M (-66.3%). FCF’20 is a negative € -64.6 M (vs. € -20.2 M in 2019) and NFD’20 stands at € 797 M (10.9x NFD/EBITDA), a sharp reduction vs. the € 1.2 Bn from 2019 thanks to the asset sales (Santillana Spain and MediaCapital). As for the guidance’21, the company expects a year of transition due to the global uncertainty from Covid-19, with operating growth in all the businesses (the year will improve as it progresses) and a plan to reduce fixed costs by € 30 M (€ 15 M permanently and € 15 M temporarily) and improve cash generation substantially (net of restructuring costs). Our estimates (we must still deconsolidate Santillana Spain) reflect +4.5% sales growth and € 22 M of cash generation.
We reiterate caution on the stock: debt remains high, cash generation is weak and not much of the guidance’21 has been specified. The stock has rallied +141% since 2020 lows (September) and +8% in 2021, and although it has still fallen -33% since 2020, we do not see any upside, but we do see risk. SELL. T.P. € 0.70/sh. (potential -27.08%).