EUR 100.00 For Business Accounts Only

MEDIASET ESPAÑA: FY2020 RESULTS (ANÁLISIS BANCO SABADELL)

4Q'20 vs. 4Q'19 Results:
Sales: € 290.0 M (+1.6% vs. -0.8% BS(e) and -1.7% consensus);
EBITDA: € 102.6 M (+28.1% vs. +4.0% BS(e) and -3.5% consensus);
EBIT: € 97.6 M (+30.7% vs. +3.5% BS(e) and -2.3% consensus);
Net Profit: € 75.5 M (+38.0% vs. +7.3% BS(e) and -2.9% consensus);
FY2020 vs. FY2019 Results:
Sales: € 836.6 M (-11.6% vs. -12.3% BS(e) and -12.6% consensus);
EBITDA: € 252.7 M (-11.0% vs. -17.8% BS(e) and -19.9% consensus);
EBIT: € 230.5 M (-13.0%);
Net Profit: € 178.7 M (-15.6% vs. -23.5% BS(e) and -26.2% consensus);
The results were very good, beating expectations on all business lines: sales, EBITDA and cash. 4Q’20 sales grew +1.6% (vs. -0.8% BS(e) and -1.7% consensus), with in-house media sales falling -2% (with a target market audience level of 29.6% and a market share of 43.2%), third-party media sales +93.2% (thanks to the contribution from “Be a Lion”) and other revenues +21%. Costs in 4Q’20 totalled € 187.4 M (-8.8% vs. -2% BS(e)), bringing 4Q’20 EBITDA to € 102.6 M (+28.1% vs. +4% BS(e)), with the margin coming in at 35.4% (vs. 28% in 4Q’20). EBITDA’20 reached € 252.7 M (-11%), with a margin of 30.2% (vs. 30% in 2019). Operating CF’20 came in at € 200.9 M (+14.2%), with CAPEX hitting € 98.6 M (vs. 184.1 M in 2019), leaving a net cash position of € 123.2 M (8.4% market cap). No specific guidance was given for 2021 (TL5 suggests the market will see mid/high-single-digit growth vs. +3% BS(e)), and the company announced it will cancel Treasury stock (4.3%), but has not announced dividend payments for the time being (we believe there will be none in 2021-22) in order to maintain flexibility with the excess cash.
Despite the stock’s good recent performance (+9% in absolute terms in 2021 and +61% since October’20 lows and +42% vs. IBEX), we expect a positive market reaction thanks to the excellent flexibility shown in costs, as well as the cash generation. We will raise our estimates to include the improvement we expect to see in the advertising market in 2021 (despite a weak start to the year). BUY. T.P. € 4.70/sh. (upside +0.2%).