Good morning, everyone. This is Pilar Gil speaking, Head of IR. Welcome to Prisa full year results conference call. To explain in detail the result release, today's presentation will be led by Joseph Oughourlian, our Chairman, and we will also have with us David Mesonero, Group CFO, Carlos Núñez, Executive Chairman of Prisa Media, Francisco Cuadrado, Executive Chairman of Education, and Julio Alonso, Chief Operating Officer of Education. After the session, we will open the floor for Q&A, and the people on webcast will also have the chance to put their questions. With that, I will now hand it over to our Chairman, Joseph.
Thank you, Pilar. Thank you everyone for your attendance today. Before we go into the details of the 2021 results, let me highlight a few things. The first thing is the strengthening of our corporate governance with renewed and committed management teams. The second thing is deep restructuring of our businesses to accelerate the digital momentum and maximize efficiencies. Finally, we've reached a refinancing agreement, which we're very proud of, and which we'll get into the details. I think the key headline for 2021 is that we beat the guidance that we gave you with the third quarter numbers of EUR 95-EUR 100 million adjusted EBITDA with an adjusted EBITDA of EUR 107 million.
What we saw in Q4 was improvements across the board, across our businesses, with a strong share gains in advertising market, digital momentum, and also a normalizing of the situation of our education business in Latin America. Firstly, the commitment to boost digitization is reflected in this set of results, both in education and on the media side. On the education side, we saw 16% increase in the number of subscriptions in EdTech models. We're now close to 2 million subscribers throughout Latin America, and that despite a very difficult year with our education business, which you may remember, saw most countries with closed schools throughout 2020 and 2021.
On the media side, we saw 61% increase in digital news subscribers at El País, where we've reached 137,000 pure digital subscribers at our leading newspapers. On cash flow, there's now a new financial culture that has been implemented at the company. We're constantly striving to improve cash flow, and I think you can see some of the results of those efforts with the cash generation, excluding one-offs, that was positive throughout the year at EUR 1.6 million. That's an improvement of EUR 58 million compared to 2020. We've implemented a very lean organization. I mentioned the efficiencies. There's a new strong cost control throughout our businesses. Throughout 2021, we've reduced about EUR 30 million of fixed costs.
Those cost-cutting measures took place mostly on the media side, but also in Santillana and at the corporate level. Last but not least, we've reached and I think I guess that would be the big news today, a preliminary debt refinancing agreement. David, our CFO, will discuss further in detail this important milestone for the company. I just wanna highlight that, you know, we've got extended maturity, we've got enhanced flexibility. Above all, we've got new lenders that actually believe in this company for the first time in 15 years. I wanna take this opportunity to thank them both, PIMCO and Angelo Gordon for the confidence that they've shown in the company.
Let's go to the presentation, slide five, where you can see the evolution of the EBITDA, the beating of obviously our target, for the year. Really the turnaround of the situation starting in Q3, with a very strong finish of the year in Q4. Hopefully that's a good base, for 2022. Let's go to slide six, where I wanna go through some of the most relevant business unit highlights for Q4. Prisa Media has been working on laying the foundation of a new cross-functional organization, completing a strong restructuring while maintaining the business momentum.
I want to take this opportunity to thank Carlos Núñez for remarkable work in the space of six months, where he was both changing the organization in a radical fashion, extracting cost efficiencies from the business, but at the same time, our businesses were outperforming and were doing remarkably well in the space of those six months. Santillana has also had an outstanding performance in the fourth quarter with on the private business growth supported by EdTech subscriptions and a very strong public that you know Paco will go through. Again, a remarkable performance from the Santillana team in a very very difficult situation. I mentioned the schools were closed most of 2021.
They only reopened throughout Latin America in the late months of the year. Finally, on the corporate side, kudos to our CFO, David Mesonero, who led both the renegotiation of sales and lease agreement. This was an unfortunate deal that was signed a long time ago, which frankly was not very flexible and very expensive for the company. He'll go through the new deal, but let me say that we're very pleased that we've reduced our leases in a very significant way. Above all, you know, the debt refinancing agreement, which I just mentioned. At this point, I should hand over to David.
Thank you, Joseph. This is David Mesonero, CFO speaking. Let's move to explain group's financial highlights on the slide eight. In 2021, the operating EBITDA excluding severance payments reached EUR 107 million, 46% better than the same period last year. In the standalone quarter, the improvement was of 44%. The new financial quarter focus on cash management has led to a positive cash flow generation before one-offs of EUR 1.6 million, compared to -EUR 56 million in 2020. During the fourth quarter, the cash generation before one-offs has been EUR 36 million, better than Q4 2020. The improvement in the cash flow generation comes supported by a better-than-expected evolution of all business lines, CapEx control, and working capital management.
During 2021, the company has made a strong effort in one-offs, EUR 67 million looking for solving historical roadblocks that will enable to improve efficiencies. Liquidity of the company remains solid, with a total cash position of EUR 169 million and additional undrawn liquidity lines amounting to EUR 102 million. Net debt at the end of the period stood at EUR 756 million versus EUR 679 million as of December 2020, explained by the cash flow consumption in 2021 due to the strong effort in restructuring and one-off costs associated to M&A and refinancing completed in 2020, but with cash impact in 2021. IFRS 16 liabilities stand at EUR 69 million, EUR 49 million lower than 2020 after the renegotiation of the sale and leaseback signed in 2008.
As of December 2021, net financial debt to adjusted EBITDA ratio stands around 8x. Let's move now to slide nine to explain in detail the benefits of the new refinancing agreement reached, a significant milestone for the company. The company has reached an agreement with lenders representing more than 95% of our current syndicate loan to implement a new financing structure that provides significant benefits to the company and its stakeholders. The new agreement provides the company with a stable platform to successfully implement its business plan, thanks to the following benefits. First, increased stability with a refinance structure that sets new covenants. We will provide sufficient headroom going forward. Second, increased flexibility for acquisition, financing, debt repayment, reinvestment of proceeds in the businesses, and M&A transactions.
Third, the improvement in the cost of the company's debt, with the cost of debt decreasing from 7.16% - 5.99%, which effectively implies a two-year payback period for the new financing compared to the current financing. These costs do not include any structuring or underwriting fee that the company may pay in cash or through the issuance of warrants. Fourth, maturity extension, providing the company with five years of stability to implement its business plan. As a conclusion, the new refinancing agreement improves the terms and conditions over the previous agreement, allows Prisa to fully focus on the execution of the business plan, and aligns for the first time the interests of equity and debt holders while increasing the liquidity of our shares in the market. On slide 10, we have a comparison of the current terms with the new financing terms.
The debt structure changed by splitting the syndicate loan into two different tranches, a senior tranche of EUR 569 million and a junior tranche of EUR 181 million. In addition, an agreement has been reached to extend the senior super senior term loan and RCF lines. In terms of cost, we have managed to reduce the blend cost of our debt, as mentioned before, from 7.16% - 5.99%, reducing the burden of our debt over the group in the coming years. In addition, greater flexibility is achieved through the extension of debt maturities, the elimination of September 2023 net debt to EBITDA covenant, and with the inclusion of margin improvements linked to ESG metrics for the first time.
We expect to close the refinancing with full documentation by the end of March. Moving on the recent renegotiation of these agreements for our offices in Madrid and Barcelona, on slide 11, we have some details on the renewed lease terms. The agreement gives the group greater flexibility compared to the previous contracts, which as a result of the renegotiation, will provide the group with exit windows for three of the buildings at Miguel Yuste complex. The former conditions expired in 2033, and did not contemplate the possibility of relocating offices. In addition, a reduction in the minimum duration of existing leases and a reduction in future lease payments have been achieved. The renegotiation of the lease agreement results in the group net debt decreasing by approximately EUR 28 million in 2021, with IFRS 16 debt being reduced by EUR 49 million.
In terms of savings, we will achieve an annual blended cash savings of EUR 4.4 million, which will entail an average increase in annual blended EBITDA of approximately EUR 1 million. Savings net present value amounts to EUR 14 million, and the internal rate of return of the agreement is 20%. To initiate the renegotiation, we had to make a one-off payment of EUR 20 million, which is substantially less than the penalty required to get the contract canceled, with a payback estimated of 4.5 years. This payment has an impact on the 2021 P&L account of EUR 12.7 million.
Finally, with the renegotiation of the contract, we have managed to give it an ESG orientation by optimizing the space adapted to the reality that encourage teleworking and work-life balance, reduce the consumption of resources, and allows for more intelligent offices. In conclusion, this transaction reflects the group effort to focus on maximizing cash generation and leverage reduction, solving legacy issues. Let's review with more detail on slide 12 the key figures of the group. Total revenues in 2021 amounted to EUR 741 million, compared to EUR 701 million in 2020. These represent a 9.3% increase in local currency or 5.8% in euros. These figures include a positive Q4 with a revenue growth of 24%, supported by a positive evolution both in media and education.
On the expenses side, they have grown slightly compared to last year, which is mainly explained by an increase in one-offs. As Joseph said earlier, the EUR 30 million fixed cost reduction has been achieved, and we will continue to pursue efficiency improvements going forward. Operating EBITDA is in line with 2020, despite higher severance payments in 2021. It is worth to highlight that adjusted EBITDA, which excludes redundancies, grows by 46% in euros or 56% in local currency, and surpasses guidance. On slide 13, we have the evolution from EBIT to net profit, where the comparison with previous year is affected by 2020 impairments carried out. On like-for-like basis, the relevant lines to highlight in the period are the reduction of EUR 21 million of debt interest because of the reduction of bank debt.
Let's move to slide 14 to review in detail the cash flow generation. Cash flow before one-offs in 2021 improved by EUR 58 million the previous year, driven by operational improvement seen in the businesses. The significant improvement, despite the higher number of one-offs, were driven by operating growth, CapEx control, and working capital management. Finally, on slide 15, we see the net debt evolution. Net financial debt stood at EUR 756 million compared to EUR 679 million as of December 2020. On the right-hand side of the slide, we have the maturity of the profile of the debt with the current refinancing terms. With the new refinancing, the maturity is extended to 2026 and 2027.
It is important to reinforce that liquidity is maintained with a cash position at the end of the period at EUR 169 million, with additional undrawn liquidity lines amounting to EUR 102 million. Let's now move to Prisa's media overview. Please, Carlos, continue.
Thank you, David, and good morning to everyone. This is Carlos Núñez. During the fourth quarter of the year, we continued with the organizational restructuring of the media division, which integrates the radio and news businesses in Spain and Latin America. I already announced the launch of this new organization in first half results with active execution in third quarter, and we are currently rolling it out. As we have explained in past months, the organizational changes follow the guidelines of a unified direction for all media assets around a common purpose and a strategy, focusing efforts on acceleration of digitalization, leveraging subscription models, and enhancing the global reach of our products. To achieve this strategy and to be able to create a business platform ready for growth, we have relied on two pillars, the first being digitalization and the second restructuring.
In the digitalization part, we have disposed of the last paper-related assets of the company, our printing plant in Sevilla. In addition to the commitment to subscription models, where we have had a growth of 61%, and we have experienced the reversal of the subscriber growth curve. On the other hand, in the commitment to new products, we have reinforced the audio part, strengthening podcast and streaming, becoming the leading company in Spanish in audio with more than 400 million downloads and more than 800 million hours listened to in a stream. The latest lever in digitalization is to give our brands a new approach to technology development to continue growing, distributing, and innovating in all our digital products. The second lever of action has been restructuring.
21 staff departures have been implemented to eliminate duplication of functions to build a lean organization. In addition to investing in internal talent, we have strengthened our recruitment of outside talent. As well, we have given a new configuration to our newsroom, especially at El País, coupled with closing of non-profitable editions in Brazil. Finally, and business as usual, we have reinforced cost control that will help us to bring new efficiencies to the surface. The combination of digitalization and restructuring will result in the creation of a new platform that will allow us to grow and further consolidate our leading positions. The business platform is based on four simple pillars. The first is a lean, cross-functional organization business platform where all products are interrelated.
The second would be the scope of the platform, focusing on a global reach to be able to distribute our content around the world. The third would be digitalization. In an increasingly digital world, it is important to adapt all products to the needs of our society and to focus on the evolution of current products as well as innovation with the creation of new digital products. Finally, the most important thing is to continue to consolidate the leading position of the business platform with financial delivery. Regarding our economics in slide 19, I would like to highlight the operational improvement of Prisa Media compared to 2020. Revenues have increased by 14% compared to 2020, with digital revenues increasing by 26%. This moves our digital revenue mix to 24%, bearing in mind the high weight of the radio advertising in our mix.
This is more than 200 basis points versus last year. We have improved our behavior in the advertising market where we operate. In radio in Spain, we have closed the year with a 40% share versus 39% in 2020, and an improvement in the power ratio to 92%, not including associates. Radio in Colombia, we have closed the year with a historical record in advertising revenues in local currency and a 40% share. Radio in Chile, market performed better than expected in the face of political uncertainty, growing 1% versus 2019 volumes. In the press, we have maintained our share levels in Spain to a total share of 10% in 2021.
Thanks to the strong efforts made in cost control and the continued search for efficiency, partially helped by the initial running of the new organization, in the period from January to December, expenses only increased by 1%, excluding severance payments, despite the increase in revenues, so consolidating efficiencies introduced last year. In terms of EBITDA, excluding severance, the improvement was of EUR 43 million, out of which EUR 27 million came from the fourth quarter. One-shot severance expenses amount to almost EUR 32 million in 2021 and are related to the new organization we are rolling out, leaner, more efficient, and more agile. With this, we have broken even on our full EBITDA with EUR 9.9 million. About our digital growth, you can see the continuous improvement in our digital KPIs. As mentioned before, while we are surfing the paper decline, gaining market share.
In radio, streaming hours have reached an average of 67 million per month, 20% more than in 2020, and we have had 33 million podcast downloads monthly, 42% more. The growth responds to Prisa Media's commitment to the creation of new digital audio content, multichannel distribution, and product innovation, with lots of initiatives already launched. We have an outstanding performance in capturing subscribers, with a total of 177,000 subscribers, out of which 137,000 are only digital as of December 2021. El País leads the market for the subscription model in Spain, with a rate of growth in the number of subscribers higher than that of most of the major world titles in the first two years.
The average among the large European titles at the end of its first two years is 70,000 subscribers, a figure that rises to around 150,000 in the case of Latin American ones. The subscription model is evolving to offer its subscribers more exclusive, rigorous, and quality content adapted to multiple formats. All in all, very good quarter for our business in all dimensions, where we are laying the foundations of the company for the coming future. Let's hear now about our educational business, Santillana.
Thanks, Carlos. Julio Alonso speaking. First, I would like to confirm that Santillana Planet has successfully completed the operational separation of its public and private business without suffering significant synergies in the process. In the private business, Santillana obtains 62% of its revenues from the subscription systems in 2021, where it has managed to increase the number of subscribers who trust them by 16%, and even more so the number of schools that do so. EdTech subscription model has met guidance for number of subscribers and revenue in local currency. In the main countries, subscription revenues already represent 87% in Brazil, 75% in Colombia, and 57% in Mexico, that total private revenues. Throughout the year, there has been a significant improvement in business supported by the reopening of schools, now standardized, which has made it possible to develop the satisfactory marketing campaigns.
After the first quarter of 2021, where those countries whose business were not significantly affected the year before, since they had already started classes with the outbreak of the pandemic, March 2020, suffered its consequences, especially Brazil and Colombia, with those reductions in sales of the didactic product, a recovery has been verified through the year, with a special emphasis on the second semester. We have seen the resiliency and relevance of EdTech subscription models despite the challenging environment with distance and hybrid learning in schools. The last quarter of the year has shown solid growth that, together with the normalized environment for the opening of the schools, points to a positive outlook with the start of the 2022 circuit campaigns. In the public sector business, sales have been better than expected.
Thanks to the outstanding market share of 32% achieved in Brazil in the national textbook program, being leaders, as well as the good behavior of sales in other markets. We can confirm that the public sector has not suffered a decrease in incomes during the pandemic, being a solid business and generating cash for the group. If we go to the next slide, it's worth noting that the almost 2 million students who closed the 2021 annual cycle in our subscription systems maintain price as a general characteristic within each product. In the context of several economic crises, the most significant growth has been in festival systems and in English systems with a lower unit price, and therefore, the mix of products generates an ACP growth of 6% in local currency. These figures confirm the guidance provided at the beginning of the year.
Subscription models already account for 62% of our didactic market revenue. The transformation of the didactic market based on the textbook to subscription models with significant gains in income per student is one of the best pillars of our strategy. The start of the 2022 sales campaigns anticipates very satisfactory results of this. Additionally, the company manages a strong structural cost reduction program while maintaining the necessary commercial investment for the current campaigns once it has developed normally. Comparable revenues in local currency increased by 12% and EBITDA was 21% higher, recovering the drop in the first quarter of the year where COVID has not impacted yet the year before. In the fourth quarter, revenues in local currency increased by 45% and EBITDA by 58%.
The chain rate has had a negative impact of EUR 23 million in revenues and EUR 7 million in EBITDA. Current prospects point to a significant recovery by 2022. I will now hand it over to Joseph.
Thank you, Julio. Just to conclude this call, I would say that 2021 was a very strong year for Prisa. Not only did we deliver on guidance, but we beat this guidance by 10% with a very strong Q4. That's despite currencies going against us. That's despite schools being closed for most of the year, hitting, impacting, you know, our biggest business. That's despite the media business being in the middle of a major restructuring and still outperforming peers. There's a focus now in this company on cost control, on efficiency across the board, and you see signs of this in all our divisions. There's a focus on cash generation. If I look at our various businesses, we're very pleased with our media assets.
They've really outperformed the advertising market by gaining share pretty much in all the regions and in all the divisions. We're very pleased that the reopening of schools has had a very strong impact on Santillana and should allow for a strong development, particularly on our EdTech model. Of course, we're delighted with the refinancing agreement, which I won't dwell on. I think David has explained to you. That really allows us to focus on the execution of our business plan and the development of our equity story. This guidance has been outperformed by a fully committed and renewed team. There's a new culture in this company, and that has already translated into strong results.
If you turn to page 25 of the presentation, I'm happy to share with you some of the guidance that we're looking at for 2022. Revenues in a range between EUR 770 million-EUR 800 million, still a healthy growth, an improved EBITDA margin of 15%-17%. We're looking to improve further the cash flow generation of the company. To conclude, I'm happy to announce that we'll be hosting our first CMD on March 22, and we'll be focusing on essentially explaining all our businesses and the growth opportunities. Now that the company is refinanced, we can look forward, and we can look out at the next three years. For the first time in its history, this company will provide guidance and will provide targets three years out.
Before we move to Q&A, I'd like to take a few words on ESG. Prisa has enlarged its commitment to sustainability and has created a specific board committee with the aim of organizing and promoting the group's sustainability strategy, strengthening the corporate governance policies, and aligning the entire management of the organization with the United Nations Sustainable Development Goals. With this decision, Prisa aims to take a step forward in its commitment to sustainable growth, both through its media and its presence in the field of education, as well as through initiatives that allow us to make decisive progress in the field of good corporate governance, also incorporating ESG criteria into its financial strategy. Now, I'm open to questions.
Thank you. To ask a question, you will need to press star one on your telephone. To withdraw your questions, please press the pound or hash key. To ask a question on the web, please type it in the Q&A tab on the top right corner of the screen and click submit. We have one question on the phones. Would you like to start with that one?
Sure.
Thank you. It comes from the line of Manuel Lorente from Mirabaud. Please go ahead.
Hi. Good morning. My first question probably from the guidance for this year whether you can give us a little bit more details of this let's say 6% revenue growth is going to be led by Santillana or the media assets or a combination of both, and also more or less also a little bit of granularity of the margin expansion throughout the different business.
This is David speaking, CFO. Thank you, Manuel for your question. Regarding the guidance, it is a combination of growth in both business units. Both business units are growing next year. In that sense also, please do consider that we have done a fantastic exercise in terms of making the company much more lean. All this increase in growth that we will see will be transformed into a margin expansion, thanks to this operational leverage.
I see. One on referencing, then, just to clarify some of the issues of the announcement. This 6% blended cost of debt is more or less stable throughout the next five years or is decreasing or increasing? Also whether you can detail the exact amount of debt repayments that the company will face in 2026 and 2027.
Regarding the first part of your question, it's David Mesonero also speaking. The 5.99 is a blended cost of the three lines that we have. Super senior at the price of 5%, the senior at the price of 5.25%, and the junior at the price of 8%. The junior is a mix between a 5% PIK and a 3% cash. Regarding the repayment, this, we are just taking the current financing, and we are doing an amend and extend. In terms of the small increase in the size that you are seeing, it's just a matter of the interest accrued on the PIK interest that we have been not paying during the last few months.
Okay. Just my final question then on the Capital Markets Day. Obviously, it's a huge milestone for the company. Can you share with us some of the main topics that you expect to cover on this Capital Markets Day?
Well, I think the idea of the Capital Markets Date is to give you sort of our objectives three years out and where we see those business lines and how we see them develop in the future, to give you a bit of perspective and to give you a sense of, you know, where we think we're going with those businesses.
I believe that Joseph that you were mentioned and they will also include some three-year forecast for the company. It's not going to be just educative or qualitative.
No, that's correct. I think that, you know, we wanna flesh out sort of some objectives that we have, and we know how difficult it is to put out some forecasts. At the same time, I think it's a very useful exercise, both for the company and its divisions, but also, you know, a forecast exercise that we do with our investors to sort of show them the potential that we see with all our businesses, and we see a lot of potential.
Sorry, just my final question. That's probably for Carlos. In this digitalization process of the media assets of the group, I see on your presentations that digital mix already represents roughly 24% of the revenues of the segment. Can you give us some
Some idea of the margin between the two revenue types. Digital margins are still well below physical margins, so to speak, because of the different scales of the different business. We are in a more balanced level or even the other way around. Thank you.
You're talking about margins, of the margins?
Yeah.
I mean, I don't have here the current figures or the right figures for the margins of each advertising type. Especially because depends on the relationship with our agencies. Okay? You know, the primes and the extra primes we pay for the different types of advertising is different in this type. Okay? In this sense, in terms of margin, obviously, the more margin in terms of contribution margin we have is in digital and in radio much than in the press, which at the end is linked to our paper product. Okay?
Mm-hmm.
Any other answer?
Okay. Thank you.
All right. Operator, any other questions?
There is no more questions on the phones at this time.
Okay. Maybe we'll take some questions from the internet. There's a number of questions from Fernando Cordero Barreira. I'm gonna take them one by one. The first one is, what are the levers included in the new credit, in the new debt facility to reduce the financial costs? That would be for you, David. We'll start with that one.
Sure. Yes. I think that as I explained, the blended cost is 5.99%. If you compare with the current blended cost of 7.16%, I consider an outstanding reduction of more than 100 basis points. I assume, Fernando, you are questioning about what else we can do. In that regard, I think that our new culture of focus on cash flow plus significantly less one-offs that we expect in the next few years, as we have done all the cleaning last year. Plus the EBITDA improvement that we expect in both businesses will significantly reduce the leveraging of the company. In that regard, we expect to reduce significantly that 8x EBITDA net debt during the course of the next few years.
Once we achieve a normalized leverage, I think it's the right time to start discussing about potential alternatives for the refinancing.
Okay. There's a second question on El País paywall, which has been changed to a freemium model. Fernando would like to understand the reasons for the change and the first indications that we have on the outcome of that change. Carlos, do you want to take that one?
Yeah. Yeah. Regarding our change of the paywall model, four main reasons to this change. First is, freemium model has a better effectiveness in capturing less loyal subscribers once we have the cream of our loyal subscribers in the metered model. Second, this freemium model is not vulnerable to incognito navigation or deletion of cookies. Third, this model protects our level of audience while keeping the subscriber acquisition rate. Fourth, it is more appropriate as we consider to a newspaper with better and deeper content as we have in El País. Regarding the results after almost a little bit more than one month of changing our model, we are really satisfied with the change.
I think this will we will keep our growth rate in a very healthy way in the coming months.
Okay. Thanks, Carlos. There's now a number of questions from Juan Peña. He's asking about the advertising market for 2022, and whether we've got any visibility there. That should be an easy one for you, Carlos.
Yeah. Regarding advertising, okay, and you consider in the current situation, very low visibility, obviously. Though, we are performing really well in Latin America in the first part of this year, in Colombia and Chile and the Latin American markets. We are performing in Spain better in radio than in digital. But as I said, as of today, we have very low visibility about the evolution of advertising market in the coming months, considering the macro context we have.
All right. He's got another question on the education business. He's looking at EBITDA margins in Q4, and he's wondering whether there are any extraordinary effects in those margins that would have pushed them higher.
Well, the Q4 of the year has always an important part of the sales of public market business of Brazil, and the first part of the sub campaigns is the better Q in margins of the Santillana outputs. It's true, we expect for this year an increase of margins because the reopening of the schools and the march of the campaigns is very-
Okay. Then he's asked the question about what business areas do you think could be targets for M&A activity? I think that the one thing I would say is that at Prisa, we keep an open mind on M&A, on every one of our businesses. However, I think this is something that we will want to emphasize during our CMD. Clearly the refinancing agreement allows us, you know, gives us five years, gives us visibility. We're no longer forced sellers of businesses, which is great news given how much value has been destroyed in the past in M&A transactions, mostly on the selling side.
The other thing I would highlight is that, you know, and again, we'll emphasize that in our CMD, this company is gonna be one. You know, we're no longer looking to split the businesses. We're no longer, you know, looking to sort of focus on M&A. We really wanna give you a sense of the potential that there is for our businesses, and we hope that you'll be pleased with what you see on the 22nd of March. There's also Fernando Abril-Martorell, who's asking us about 2022 guidance. What are we assuming on the advertising market and on the real euro exchange rate? Do we expect further severance expenses going forward?
Okay. Regarding the exchange rate of the currency, I will answer myself. Probably, Carlos, you can answer the advertising market first.
Yeah. I mean, as I said before, it's very, very low visibility as of today.
I think it's for the year.
No, for the year, regarding our guidance, this is not changing in current situation. We are working in a guidance made in end of 2021, okay? We are not changing our guidance regarding the market, which is based on independent sources.
Regarding the currency, obviously, we are seeing a strong reposition of euro against the real. Of course, we need to consider all the macroeconomic headwinds that we could face. In that regard, we feel very comfortable with the current guidance we have provided. In that regard, we do not expect at this stage to improve the guidance because of this probably temporary effect of the real/euro. Regarding further severance expenses going forward, obviously, as I have said we have done EUR 67 million of one-offs this year. I think that is a massive cleaning of the house, and in that regard, we expect that these severance expenses, as I have explained, will reduce dramatically.
In a worst scenario, we will be slightly below EUR 10 million during 2022.
Is there any further questions from the phone?
There's no more questions from the phones at this time.
Okay. Thank you very much for joining us today. We will be pleased to meet you all in our capital markets day, the next 22nd of March. We will be sending further details in the following days. If in the meantime you have any further questions on Prisa, just feel free to contact us back. Okay, thank you.
That does conclude our conference for today. Thank you for participating. You may all disconnect.