Santillana is a textbook and general-interest publishing group in Spain and Latin America with an international presence in 22 countries. Since March 2000, Santillana has been part of PRISA, which provides education, news and information, and entertainment as the largest media group in the Spanish and Portuguese-speaking markets. Santillana celebrated its 50th anniversary In January 2011, and published 7,741 new titles that year, adding to its catalog of 36,278.
Analysis & Key Developments
Santillana’s publishing revenues were flat at 738 million EUR, compared with 734 million EUR in the previous year. Adjusted EBITDA reached 173 million EUR, a loss of 7.3%. Santillana’s core publishing business, Education, posted 489 million EUR while the general publishing divison generated 135 million EUR.
Spanish revenues fell by 11.8% due to a negative result in education revenues (-12.9%), since fewer new materials were produced for 2013. Trade revenues were also disappointing, with a drop of 5.8% due to falling consumer spending. Still, in light of overall market declines of 14%, Santillana ended the year above the industry average.
Ownership, mergers & acquisition, internal organization
Prisa agreed in March 2013 to sell Alfaguara, publisher of Nobel-prize-winning author Mario Vargas Llosa and several other editorial brands, to Penguin Random House for 72 million EUR. The group said it would sell other Spanish-language publishing brands alongside Alfaguara. Prisa, which publishes Spain's most-read quality newspaper El Pais, has been restructuring its debt burden of over 3 billion EUR and selling off assets.
While Spain posted weak sales results, the Latin American markets performed well with revenues up by 4.1%. Latin American business accounts for 80.5% of group revenues, with Colombia (+21.9%), Mexico (+6.1%), Ecuador (+9.2%) and Argentina (+6.9%) at the top. Business in Brazil accounted for 12.3%, despite a negative impact from FX. At constant currency rates, revenues increase by 31.3% and EBITDA by 25.1%.
The group’s international expansion was propelled by Santillana’s learning products. Santillana Compatir was launched in a number of markets, including Mexico, Argentina and Columbia. Ten other countries will follow in 2014. Learning products were implemented in China and Turkey.
The Group highlights its growth in digital learning systems. Revenues from UNO System, a learning model, grew by +61.3% in 2013. E-books make up 5% of revenues at Santillana. The e-book catalog consists of 3,700 titles available in Spain and Latin America.
Bestselling authors and titles
Santillana’s highlights include Joel Dicker’s The Truth About the Harry Querbert Affair.
Total revenue reached 2.66 billion EUR (-2.2%) and EBIDTA was 427 million EUR (-2.3%). The Group showed a net loss of 255 million EUR after having 305 million EUR for goodwill impairments and intangible assets. Education, the core business of the company, showed a strong growth in Latin America. Revenues (734 million EUR) grew by 1.8% with Latin America up by +5.4%. By country, the North and Latin American market contributes strong growth rates: Mexico (+17.6%), Ecuador (+23.3%), Puerto Rico (+35.4%), Dominican Republic (+43.3%), the U.S. (+41%), Argentina (+20.6%), Central America (+27.3%), Colombia (+3.4%), Peru (+129.4%), Bolivia (+16.1%), Uruguay (+22.2%), Chile (+16.5%), and Brazil (-17.0%).
Spain saw a revenue fall of 8.9% mainly due to General Editions and a lower educational campaign. EBIDTA reached 184 million EUR (+8.2%). This figure included a negative contribution of 12 million EUR as a consequence of launching new educational systems at the operating profit level. The book and educational businesses cover 29% of corporate revenues in 2011.
Ownership, Mergers & Acquisition, Internal Organization
In July 2012, Juan Luis Cebrián was appointed Chairman of the Group following Ignacio Polanco. Since April 2011, Cebrián was executive chairman of the press division and CEO of El País. Ignacio Santillana became the new chairman of Santillana in December 2012.
Accumulated profit in the education segment included capital gains of 168 million EUR generated by the sale of 25% of Grupo Santillana de Ediciones to the private equity fund DLJ South America, completed in April 2010.
Santillana is making a transition from print to digital with services such as Libroweb, Libromedia and Libroclik. In October 2012, Santillana opened an online store to sell digital books, followed by the launch of its first children’s apps. Thus, Santillana reported the launch of Edusfera, an online store for students, teachers and parents offering 2,000 digital educational resources from the publisher’s digital catalog for students aged 3 to 18. Since November 2012, Santillana offers e-books in Spanish to Euorpean readers at the Amazon Kindle Store.
Prisa Ediciones, Santillana’s trade publishing division, announced to expand its digital catalog (both new and backlist) as the only way to cope with the broad phenomenon of piracy in Spain.