Good day, thank you for standing by. Welcome to the Mediaset España Q1 2022 results presentation. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to turn the conference over to your speaker today, Mario Sacedo. Please go ahead. Hello, good evening, everybody, and welcome to 2022 Q1 results presentation of Mediaset España Comunicación. This is Mario Sacedo, Head of Investor Relations. Massimo Musolino, General Operation Manager, is going to present the highlights and main topics of the period. After this presentation, it will be a Q&A session where Massimo, Quico Alum, Publiespaña General Manager, and Javier Uría, company's CFO, will answer all your questions. Massimo, please, you have the floor. Hello, everybody. Welcome to Mediaset España's 2022 Q1 result presentation. I will go over the main figures and events of the period first, then you can ask any question in the Q&A section at the end of the presentation. Let's start on slide number two with some of the operational highlights of the January-March period. As you know, we are currently under a tender offer bid launched by MFE-MediaForEurope. Following the guidelines required in this type of corporate operation, we have to maintain a passive position so that we do not affect any shareholder decision. For this reason, I will not be making any reference to the tender offer bid in this presentation, nor will we be able to take questions on the matter, even though obviously it's the most relevant event of the quarter for us. Mediaset España audience share from January - April reached 26.2%. In terms of commercial target, our 29.3% figure, which represented a positive conversion rate of 3.1%, allowed us to maintain our leadership position in terms of TV market share, which according to InfoAdex stood at 41.7%. We achieved this thanks to our longstanding approach of maintaining focus on the most valuable viewer segments. We will elaborate on this later. Following the figures reported by InfoAdex, the total TV advertising market grew by 1.1% in the quarter, which Mediaset España reaching an ad market share of 41.7%, as I mentioned before. Moving on to financial, on the left-hand side of the page, total net revenue in the year grew by 2.2% to EUR 188 million. Operating costs amounted to EUR 153.7 million, in line with our internal forecast, and as we will see later, with the normalized figure for the Q1 of previous years. The exceptions was last year due to the COVID pandemic. EBITDA during the period amounted to EUR 64.3 million, while net profits stood at EUR 23.7 million. The healthy EUR 8 million of free cash flow generated brought a final cash position at the end of March of EUR 312 million. Let's look at the commercial target now. You can see how the company worked very hard to monetize our audience share on line number three. First, let me remind you once more that commercial target includes those individuals from 16 - 59 years old that live in areas with a population of more than 10,000 inhabitants and belong to all but the lowest socioeconomic index. Commercial target is the most valued part of the audience, and therefore, advertisers are willing to pay higher prices for it. The graph on the left-hand side of the slide shows how our commercial target improved on a monthly basis, thanks to the balanced programming grid directed towards the most valuable segments. Although the audience share in terms of total individual was leveling off, we are actively managing our content in order to maximize this conversion as a key element for increasing prices. As a result, the positive conversion maintains its accelerated trend consistently above three points. Being more accurate, the average conversion ratio in the period from January - April was a +3.1 percentage point for Mediaset España, while our competitor had a negative conversion averaging 9.6%. On slide four, there are a couple of graphs that we show the quarterly evolution of both the TV and digital market throughout the beginning of the year. On the left side, there is a visual explanation of the TV advertising market on monthly basis. January was strongly affected by the pandemic with a massive Omicron wave. February posted a healthy 5.3% growth once the healthcare situation improved. Again, in March, volatility returned to the market due to the beginning of the war in Ukraine and the transport strike in Spain. As a result, the Q1 of the year grew by 1.1%. The growth did not include any contribution for the three main sector, automotive, telco and food. The lack of investment from them is a one-off situation, and we expect that, as soon as they begin investing again, the market will improve accordingly. This is why we maintain our positive outlook for 2022 if the market normalize. Regarding the digital advertising market, if we use the business where we have operations as a reference, search engine excluded, the market grew by 11% in three-month period. Moving on slide five. Moving on, slide five details our TV advertising performance in the year. As InfoAdex has reported, Mediaset España TV advertising revenues amounted to EUR 159.9 million, maintaining the leadership position in the TV advertising market. The positive conversion ratio mentioned in a previous slide is allowing us to increase our prices as the only way to offset the reduction in TV consumption that free-to-air operators are experiencing. In this sense, in the table on the left side of the slide, you can see how the price evolution in the Q1 of the year saw an increase of 4.8% and allowed us to be leaders in terms of price. It's our aim to keep the current strategy as a way of improving the monetization of our audience share and increasing our profitability. We have a clear ambition when the market recuperates that some specific periods of 2022 will see increases higher than those of the Q1 of the year. On the right side of the slide, you can see how we kept the linear TV advertising market share with 41.7%. In conclusion, as we have said in previous call, this is the results of focusing our strategy on the highly valuable audience segments and the consequent price increase. On slide six, we want to explain how Mediaset España is managing the digital opportunity. As you can see, our growth in the period was more than twice that of the market. Mediaset España digital advertising revenues went up by 24%, and the digital market grew by a healthy 11%. Profit from digital business have doubled compared to last year, thanks to the digital market strong performance and our continued strong position in Spain, in the Spanish media market. Our approach to the digital world is not the results of one single tool. We moved from the content produced on our traditional TV channels, and thanks to new technologies, we developed an innovative group of new services and tools for monetizing our reach and extended audiences. We have come a long way in recent years, and the last step is the hybrid model introduced by HBBTV. It gives us the best of both world, the large audiences coming from the TV channels and the segmentation from the digital world, which allow us to feel optimistic about the future. We cannot look at our business today as we did before. Nowadays, content is created and distributed through different windows with the aim of monetizing all opportunities. As well as this, we have taken more steps toward being a leading company in the digital ecosystem. The acquisition of Be a Lion brought a social media reference into our group, and we also maintain a continued strategy of launching innovative solution for our customers. For example, the last one, Drive to Store for connected TV, which is capable of measuring the advertising impact at the point of sale. This product is built from the modeling of Mediaset España big data with the aim of linking different devices in order to generate a 360-degree audience that will unify inventories over connected television, mobile phones, tablets, and PCs through data and technology. Now let's move on to some financial figures for the quarter. Slide number seven, you can see how the company has been managing the cost base over the last few years. As I mentioned in our February full year conference call, the comparison base of last year is not a comparable one. Being more specific for Q1 2020 could be considered as an almost normalized year. COVID crisis started in the second half of March, while Q1 2021 was a, let's say, a pandemic period. The EUR 153.7 million in cost in Q1 2022 is 5.4% lower than the last comparable Q1 in 2020. Last year, our costs were concentrated in June and July because of the Euro Cup. This year, our costs are more linear. We forecasted a gradual return to the normal program grid, which means we will only see slight lower TV costs versus 2021 at the end of the year. Nevertheless, an increasing cost related to cinema activities is expected. Difficult to quantify at the moment because the number of premiere releases expected for the year is now between two to four. We have not made a definitive decision on this yet. Also, we are expecting a reasonable increase in digital costs due to the new projects we have planned. In any case, let me say that the cost increase linked to cinema and digital activities should also be reflected on the revenue side. Looking at the cash generation, if we make the same comparison as we did with OpEx, the EUR 80 million figure achieved in Q1 2022 brought an 8.3% increase over the last comparable Q1, which was again in 2020. Finally, on slide eight, before we move on to the Q&A section, let's quickly review what we have said and what we expect for the rest of the year. Our primary objective is profitability, and we confirm our target. In order to increase profitability, we need to increase TV revenues, and in a world where TV consumption is declining, the only way to do this is by increasing our prices. In order to increase prices, we have to continue concentrating on the quality of our audiences, and in this context, we will focus on commercial target. Our pricing policy will begin to reap its rewards as soon as the three big sector, automotive, telcos and food return to the market. Also considering that automotive and telcos are the sectors which pay the highest prices. In terms of advertising market, after the full year results release, we saw a huge geopolitical shock with Ukrainian war, booming inflation rate, and the pandemic was still relevant. Today, we remain cautious but moderately optimistic about the market performance in the coming months, and we are expecting the advertising market will make a recovery. With regard to the digital business, we will maintain our expansionary strategy, reinforcing our presence, growing organically and keeping an eye on the market for any corporate opportunities that may potentially arise. As we mentioned in a previous results call, we expect this year to see an increase in digital costs due to the new projects we have scheduled for launch, which will improve our services with a more customized proposition and larger reach. With regard to TV costs, we expect a gradual return to the normal programming grid with slightly less cost compared to last year. However, we have a certain amount of flexibility to adjust our costs depending on how the market is doing. As we previously mentioned, we also expect to generate cash and accumulate financial resources in order to benefit from potential opportunities that may arise in our audiovisual world, where there is a lot of movement at the moment. Now let's move on to the Q&A section. Thank you. Thank you, Massimo. Thanks. Oh, sorry sir. For the presentation and remarks. As we announced, now we will move into the Q&A session. Operator, please, let's proceed to open the lines. Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound hash key. Once again, please press star one on your telephone keypad. Your first question comes from the line of Annick Maas from BNP Paribas. Please go ahead. Your line is open. Hi, good evening. My first question is just, I think you just said that your cost, total costs should be slightly below what you had in last year. That is assuming what TV advertising revenue growth on a full year basis? My second question is, I guess, you know, comparatives are getting much tougher, so how do you think about Q2 or more, you know, what do you see so far in terms of TV advertising revenues for Q2? Then, you know, I might have missed it, but can you give us the absolute digital advertising revenue number for Q1, please? We can start from the first question about cost. Finally, there are no changes in our forecast for the year with respect to what I said in the February call. Our estimate is slightly lower TV programming costs than over at, with respect to last year. At the same time, we estimate an increase in costs in the digital business and cinema distribution activity. These two increases are linked to the revenue line. Regarding TV costs, we need to return to the normal programming grid. On top of that, we need to renew some programs that are at the end of their cycle. This is why we will absorb faster the Euro Cup cost of last year. The real difference between this year and last year is the fact that this year we will see a more linear seasonal periodicity with respect to last year. Last year, we concentrated an important amount of cost in June, July. This year, every quarter we will similar to in terms of periodicity, similar to the normalized year. Regarding cinema business cost, last year, we released only two movies. This year, if you remember, I was talking about five movies. Today, we can say that the movie forecast for the year are four, but this is an estimate. The first one was premiered on March. Honestly, with lower box office with respect to our forecast. Now we have three other movies, but we haven't still decide when we will premiere them. This is why at this stage, it's very difficult for me to quantify the impact in the cost line, because I don't know if we will premiere two, three or four movies this year. The same scenario regarding the digital business. We have many projects for growth in this area, all which are new activities, including new channel for Mitele Plus, new digital projects for the web, and something about AdTech and the development, of course, of the HBBTV and the branded content. These new plans and activities will entail some more costs, but also more revenues, of course. It will depends on the timeframe. At this stage, we can quantify them. In summary, try to simplify this, we can say that an increase in the total cost is expected, but in line with increase of the other revenues. This is the forecast we have at the moment. Okay. About the pricing expectation for the second Q, I mean, I don't have any. I can't give you any number of that because we are going almost week by week. We can say that in April, everybody knows, we knew that it was not going to be an easy month, just because of the fact that the Easter week took place just in the middle of the month. This was not good news. The other fact that happened in April is that telecoms and cars have moved forward their campaigns to May and June and the rest of the year. This is what is happening in April. We knew that April was going to be a difficult month, and we are now negotiating May and June. One thing I would like to underline about telecoms and automotive, that we have already negotiated. We have already got agreements with these clients, and we are waiting for the campaigns that it could be next week at the end of May, June, but we are waiting for these campaigns, and they have been postponed. The other thing we are optimistic about is the information we are having from the agencies and clients that due to the current situation, the campaigns have been postponed. That's important, annual budgets remain unchanged and have not been reduced. They are just waiting for the situation to normalize. This is what we can say about the second wind. We got also a good news from the energy sector, set to make a strong start soon. We know that, but we have to go week by week. Okay. Next question, please. Thank you. Your next question comes from the line of Julien Roch from Barclays. Please go ahead. Your line is open. Yes. Good evening, everybody. First question. I know you said no question on the offer, but my question is only on timing because I think the CNMV approved the prospectus. When do you think the offer will start, and what will be the length of the offer? We have an idea when it closes. I think you should be able to tell us that. That's my first question. The second question is, I understand why autos is not in the market because they don't have any car to sell because there's no parts. Why are telecoms and food not in the market? I think Spain is the only market like that. How much of these sectors are total revenue? What percentage are they of your total revenue? Lastly on Abril for Quico, I think media buyers are putting April down 15%. Do you agree with that? Okay. The first question, it is public that the CNMV have received the prospectus from Mediaset. The time they need to approve this is something that honestly is not in our hands. I don't know. I don't know. I can't answer. No, honestly, I have no element to say one day, one month, one year. I don't know. I don't know. I'm sorry. Yes. I don't have here the exact numbers of the weight of telecoms and automotive, but I think maybe they are together 15%-16% of our total revenues. I mean, they have declined their investment, but they have invest. It's not just zero. Maybe they have declined by this sector by, we think, 30%-35% in April, but they are there. We are waiting for that campaigns. Regarding telecoms, really, I don't know because we have. I cannot disclose, I mean, or reveal the names of the companies. We have one company that are is doing really well, and we have three, or the other two that they are waiting. I don't know waiting for what, but they're waiting. One is really. I think this one is going to push the market, and the other two are. They have to wake up. We think so, but we have to wait. About the 15% of April, I don't have this exact information, but I think April is really difficult to estimate the decline. We think that it's a double decline, but I don't know if 11, 12, 13, 14 because I don't have this number. It's due to the fact that when you have the Easter week in the middle of the month, you have three different periods. You have the first week, the Easter week, and the last part of April with different prices. It's really difficult to estimate. 15, maybe 15 is too much. I will say double digits, but no more than that because I don't have the information, not because I don't want. Coming back, so you tell us, current telecom is 15-16, but I think Massimo also said that food was not in the market. How much is food, and why are they not in the market? Food is not in the market, yes, I would think in April. It's the, I mean, the reason is the inflation. The inflation and the inflation of the, how you say, raw materials. That is the reason of the food sector. One important thing for these sectors is they need to be because they are mainly brands. Nestlé, Danone, Ferrero, Campofrío, ElPozo, they are brands, and they need to make a lot of investment, and they are really TV companies. They are waiting for them. The reason in April is that the increased cost of the raw materials, I think they are going to be back, I don't know when because that's the question. We don't have next week because the agreements are closed. We are waiting for the campaigns. They say that we are going to fulfill the agreements at the end of the year, but we don't know when. Okay. Bye. Gracias. Next question, please. Thank you. Your next question comes from the line of Nizla Naizer from Deutsche Bank. Please go ahead. Your line is open. Great. Thank you. I have a couple of questions. The first is, could you kindly tell us a bit more about the impact of inflation in Spain, and what are your advertisers, are they worried about, consumer wallets being constricted as discretionary spending comes under pressure? Some color there would be great. Secondly, you mentioned, you know, digital is getting more and more important. What are your priorities when it comes to digital, and what spending on? Some color there would be great. Thank you. Okay. On the first point, inflation in Spain. Well, in Spain, this year as everyone else, inflation came as a surprise in the second half of last year. Some people thought at the time that it was gonna be temporary, that once the situation improved or went back to normal in the supply chains and everything else, things were going to go back to normal. Unfortunately, the evolution of things has not taken us in this direction, especially with the war in Ukraine and everything else. Inflation seems that it is here to stay at least for the first half of the year, and then we will see if the situation changes in the second half. Specifically on us, inflation is not. It has some impact, but it's not very relevant because a significant part of our contracts are not linked to inflation. It's something that, you know, probably because of the fact that we are, as we have discussed in the past, we are based in in-house production, and therefore we have agreements with our suppliers and things like that, which are not necessarily the ones that you have with a third party that come to you and forces you to accept, you know, a new price. That's not part of our business model. Inflation will affect some contracts, partly on our labor agreements, but by and large, it will not really hit us as hard as you could expect or as we know it's gonna be the case in other businesses. Yes. About digital, we can, summarizing, say that we have three main objective. First of all, our main objective is to increase the coverage of our campaign. It means that digital enable us to compensate the part of coverage that we are losing in the linear television. In this sense, all our website and the sites and the OTT platform, Mitele, help us to increase the coverage of our contents. The second main objective regard the HBBTV, which is something which will be really important in our future because as I stated in my presentation, it enable us to join to two worlds. From one side, the television, from the other side, wide coverage, and from other side, the world of internet. Just to give you an example, HBBTV enable us to segment our advertising also geographically, something that our television cannot do by law. So, in this area, we are studying different developments because we think that this is an area that can enable us to create real value for our company. Finally, the third area in which we are, which is really important for us is the SVOD, Mitele Plus, which is something different than our main, our core business. You know, we always say that we do television to sell advertising. In this case, there is no advertising. There are subscribers. In Mitele Plus, we have a unique approach with respect to the market because at the end of the day, our objective at the moment is not maximize the number of subscribers, but is to have profitable subscribers. Mitele Plus is a profitable business for us from year two. During the first year, we invested in the football rights to launch the product. Then, into 2021, we had a profit. In the Q1 of this year, we had doubled the profit over the same period of last year. We don't need to have a huge amount of subscribers to make profitable the business because this is a low cash-intensive business for us. At the end of the day, we use most our TV programs or production produced internally for our company in Megamedia, so at a reasonable cost. This is something, another area in which we can have good results in the future. Thank you. Very helpful. Thank you, Nizla Naizer. Next question, please. Thank you. Your next question comes from the line of Sarah Simon from Berenberg. Please go ahead. Your line is open. Yes, hi. I just have one question. If we look at MFE-MediaForEurope's rationale for bidding for the company, they talk about revenue synergies due to enhanced tech on targeting and things. Now, I know you can't comment on the bid, but I'm just wondering, on a scale of, say, one to 10, how well-positioned do you think your existing technology setup is to go after things like HBBTV and digital targeting? Thanks. Talking about the synergy in some way, talking about the tender offer. Honestly, this is not my intention. I don't think that this is the right place and the right moment, especially to talk about it. No, but I'm not talking about the bid. I'm saying I'm asking you whether you think your existing investment in technology is sufficient to make you able to fully capitalize on the digital and targeting opportunities that you see as a standalone company. Do you think you're investing enough, and is your existing technology sufficient? Well, I think, yes, as you say, without getting into the specifics, but really in the last years, we have made movements in terms of investing in technology. Honestly, we think that with all the difficulties of the new technologies and the adaptation and everything else, but we honestly think that the money that we have spent, the moves that we have made, and the investment that we have made in general is really what we needed at, you know, this particular time. I don't think that this is hindering our, you know, ability to succeed here. I think that we are, you know, we are allocating the right amount of resources here. I don't know, in a scale of one to ten, whether maybe we cannot say that it's nine or ten, but certainly I think that we'll be in the high part of the scale in terms of the investments and the efforts that we have made in this respect. Okay, thanks. Thank you. Thank you. Thank you. Next question, please. Thank you. Your next question comes from the line of Fernando Abril from Alantra. Please go ahead. Your line is open. Hello, good evening. Thank you for taking my questions. I have only two. First is, with regards to the in-house production. It has fallen by 1 percentage point only, but I don't know what is the driver behind this and what should we expect with your content mix going forward. Second question is with regards to ProSieben. I don't know what are the next steps on this front now that you have supported the supervisory board election. Okay. Regarding the content mix, our channels, we are there are no news in the sense that, Telecinco is practically 100% in-house program. What we have done during the last couple of years has been to increase the in-house program in the channel Cuatro. This is something that we continue to do. In my mind, I made that, Cuatro will reach the same level of in-house program than Telecinco in some years, in few years. About the ProSieben, it is something about our work, no? I think. Yeah, yeah. Next steps. Next steps. Next steps. Now, we are. One second. We are a long-term investor in ProSieben. We share and honestly we are also satisfied with the objective, the business terms that the executive committee set for themselves in increasing revenues, in free cash flow. I imagine dividend that also we expect that this plan will reflect the. We expect that the share value will reflect the results of this plan. This is, let's say, short mid midterm project. On top of that, there is the interest of a long-term shareholder that have other interest, not only to maximize the short and midterm, but also to look ahead at the business model. We expect that the change of the president, the fact that the time will help us to know better them and them to know better us can help both to generate a good climate and a good results. In this moment, we don't want to say anything that can create polemic with them. We are happy to see the management focused on this short midterm objective that we share. We have received. Today they paid a good dividend. As a shareholder, it's not a bad news to receive an important dividend. This is the situation at the moment. Okay. Thank you very much. Thank you, Fernando. Let's go with the next question, please. Thank you. Your next question comes from the line of Stefano Gamberini from Equita. Please go ahead. Your line is open. Good afternoon, and thanks for taking my question. Just two quick questions. The first regarding the advertising market. You expect a recovery and the campaigns are still there. In the Q1, you were able to increase prices by 5%. Do you expect to be able to have the same trend also in the forthcoming quarters? Due to the decline in viewers that probably will go ahead in the rest of the year. The second question regarding the guidance on costs, you said that you will come back to a normalized level of costs. Could we refer to the level of 2019 costs around EUR 660 million as a reference in the long term? Considering the level of EUR 630 million you recorded in 2021, could the 2022 level be something in the middle between these two figures. Many thanks. About cost, I can say that clearly the increase of the Q1 is not something that we continue during the year. If you look at our estimate for the first half of the year, our cost base will be absolutely in line with last year. The TV cost will remain stable if the market remain normal, of course. As I said in my presentation, we have some margin to manage our cost depending on the advertising market. There are some parts of our business which generate revenues and costs. If we premiere four, five, six movies in a year, of course, you will have revenues of these movies, but also the cost. This is the same for some digital activity. I at the end of the day, the let's say, the forecast for the year is pretty clear. TV costs in line with last year, something less, and the other variable costs depending on the new project. All this under the umbrella of the advertising market, of course. If we see that the advertising market go down significantly, of course, we will try to reduce at maximum our costs. On the other hand, if we see that there is a market, advertising market, and we need to produce more audiences and more GRPs, we would invest something more. Just to close, the line of cost is not something static. Something that we cannot separate from the revenue line. I suggest to see the cost base together with the revenues base. Regarding to our pricing policy, yes, our goal is to increase prices by 4%-5%. I think we can make a high price increase if the main sectors, telecoms and automotive, as we expect, come back. Then I think we will be able to increase the price more than 5%. Thanks. Just a quick follow-up on the OpEx. You said the TV cost will be flat. Could you give us an idea of the breakdown between TV cost and the other cost or usually do not supply this information? Thanks. No, when I talk about TV costs, I'm talking about all the costs with the section of movies and digital. I include not only program grid costs, but also overheads. Our estimate is that this year, this TV and overheads will be slightly lower than last year, than 2021. This is, with the same number or with the same business, we will spend less. The difference with last year is that this year we will have more movies and, probably some new project on digital. These two different things. I'm not talking over EUR 100 million cost increase. Movies, if we broadcast for. If we premiere four movies, we are talking about EUR 15 million-EUR 20 million cost, more or less. EUR 3 million- EUR 5 million for movie and we ought to recover them with the revenues. Digital cost increase is lower this, of course. Very clear. Many thanks. Thank you. I will now hand the call back to Mario for closing remarks. Thank you. It's now time to close this conference call. Thank you very much to everybody for attending at our presentation. Usually, if you have any further question, please, contact with Investor Relations department. Goodbye. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.