INFORMATION ABOUT AGENCIA EFE

Agencia EFE is the forth largest news agency in the world and the first in the Spanish speaking world, being present in over 100 countries and having a significant diffusion both in Spain and in Spanish-speaking American countries.

EFE has continued maintaining a leading position in the Spanish market, thanks both to its progress in the text and in the digital content products and in the archive and graphic services.

It is especially relevant the International Graphic Service which, with a 38% growth in its turnover, has succeeded in significantly strengthening the Agency´s global position in Latin America.

Activity of the company year 2009:

AGENCIA EFE has continued during 2009 its transformation process, started with the aim of adapting itself to the requirements of a new competitive environment, which is migrating to the digital technology and to multimedia content. These changes, which are generating significant concentration moves within the media industry, entail a new business model, with multi-format products and a new focus on the ongoing operating processes.

During the financial year, the Company has adapted and improved its network of collaborators and agents, has adopted a new design for its commercial structure, and developed software platforms for product management which will make possible to organize its activity on the basis of its customer requirements, which are more and more segmented and specialized. All these measures have been included in the review of the Strategic Plan which the Agencia has carried out during the year.

The difficult economic and financial situation has significantly affected the Agencia's customers. The decrease in advertisements in the media has had a negative impact on the rates, which have experienced a downward trend, and has provoked the cancellation of contracts, provoking a 8.7% reduction in service sales during 2009, in spite of the actions for commercialization improvement, such as product adaptation and segmentation, content boosting, and digital and television applications, among others.

This situation has forced the Agencia to take measures for fighting the effects of the income crisis, basically oriented to cost reductions. Thus, it started a Running Expenses Reduction Plan, cut payroll expenses, and it reorganized the management of the strategic affiliated companies, such as the European Pressphoto Agency (EPA), which recorded a profit.

Work has continued, at the same time, on the technological investments needed for strengthening its competitive position, and which will be promoted in the future within the framework of the new Strategic Plan, with the goal of maintaining its position as the first news agency in Spanish language in the world and one of the largest by number of customers.

The effort carried out by the Agencia in cost containment and in promoting its presence in international markets (its foreign sales increased 8.5%), has not been enough for setting off the reduction in domestic sales, which were 12% lower than a year before, which together with the need to make provisions for risks, resulted in a net loss for the financial year of 1.6 Million Euros.