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.
In 2014, the general interest publishing division was sold to Penguin Random House at 72 million EUR, with Santillana focusing on the educational publishing activities alone.
Parent company PRISA is the world’s leading Spanish and Portuguese-language educational, information, and entertainment group. PRISA is present in 22 countries and reaches over 60 million users through EL PAÍS, 40 Principales, and Santillana, with a focus on general interest publishing, commercial television, music and talk radio, as well as educational publishing.
PRISA faced challenges in the fallout from the 2008 financial crisis and accumulated significant debt of over 3 billion EUR. The company is currently restructuring and engaged in repayment. In 2014 PRISA reached a sale purchase agreement with Telefónica de Contenidos, S.A.U for all the shares of DTS held by PRISA (56% of the company) for 750 million EUR.
Analysis & Key Developments
PRISA sold its trade publishing business to Penguin Random House Grupo Editorial, S.A. through its subsidiary Santillana Ediciones Generales, S.L. on July 1, 2014 for 55.43 million EUR. The transaction included the sale of Alfaguara and Santillana’s other literary imprints in the 22 countries where it operates.
Alfaguara Grupo Editorial, S.L.U. was incorporated in May 2014. It was 100% owned by Santillana Ediciones Generales, S.L. before the sale, and went to Penguin Random House Group Editorial, S.A as part of the agreement. Not included in the sale was the fast expanding children’s and young adult business.
Santillana reported a negative impact from currency exchange of its revenue from Latin America, while businesses developed positively in local currencies. Traditional education sales grew by 5% in 2014, and account for 60% of its total publishing revenues. New digital learning systems grew by 45%, accounting for 16% of total sales.
In 2013, the Spanish operations saw revenues fall by 11.8%, mainly due to a 12.9% decline in education revenues because the company released a lower amount of new educational material for the year. Sales from trade were disappointing as well. The company attributed the 5.8% drop to a decline in consumer spending and an overall market decline of 14%. Still, Santillana outperformed the industry average.
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%.
Santillana’s education products propelled the group’s international expansion. Santillana Compatir was introduced in Mexico, Argentina and Columbia. Ten other countries will follow in 2014. Other education products were launched 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.