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MEDIASET ESPAÑA: 1Q’21 RESULTS (ANÁLISIS BANCO SABADELL)

1Q'21 vs. 1Q'20 Results:
Sales: € 184.0 M (-19.9% vs. -17.7% BS(e) and -17.6% consensus);
EBITDA: € 51.3 M (-23.8% vs. -26.3% BS(e) and -29.0% consensus);
EBIT: € 47.1 M (-23.8% vs. -28.2% BS(e) and -32.0% consensus);
Net Profit: € 36.7 M (-24.9% vs. -21.9% BS(e) and -33.3% consensus);

The results came in below expectations in sales (lower sales in other revenues and third parties) and slightly above in EBITDA (greater cost cutting, with 1Q’21 OPEX down -18.4% vs. -14.2% BS(e)). 1Q’21 sales fell -19.9%, with gross internal advertising revenues sliding -16.5% (vs. -16% BS(e)) and external media increasing +36.5% (vs. +113% BS(e)), and with other revenues dropping -43% (vs. 38% BS(e)). 1Q’21 EBITDA reached € 51.3 M (-23.8% vs. 1Q’20), with the margin standing at 27.9% (vs. 29.3% in 1Q’20), coming in above expectations thanks to the -18.4% reduction to costs (vs. -14.2% BS(e)). We also highlight the strong cash generation, € 84.6 M in 1Q’21 (+10.7% vs. 1Q’20), beating our estimates (€ 50 M, due to working capital), and leaving the net cash position at € 95 M (5.3% market cap).
In these results we highlight the company’s cost control, offsetting the falling advertising market in 1Q’21. The key will lie in the messages to be given on expected performance in 2Q’21, where we expect the strong rally that began in April (market around +150%) to continue. We reiterate our BUY recommendation. T.P. € 7.00/sh. (upside +23.24%).