Tallinn, Estonia, 2012-02-29 14:59 CET (GLOBE NEWSWIRE) --
The following report presents the consolidated financial information of AS Ekspress Grupp, the related market developments and management decisions. The financial indicators and ratios show the outcome of the Group’s continuing operations, i.e. they express the consolidated operating results of online media, periodicals and printing services segments.
Key financial indicators and financial ratios
|
Financial indicators (EUR thousand) |
Q4 2011 | Q4 2010 | Change% |
| For the reporting period | |||
| Sales | 16 313 | 14 885 | 10% |
| Gross profit | 3 660 | 3 466 | 6% |
| EBITDA | 1 236 | 1 854 | -33% |
| EBITDA (excl. change in goodwill) | 1 986 | 1 854 | 7% |
| Operating profit | 287 | 1 016 | -72% |
| Operating profit (excl. change in goodwill) | 1 037 | 1 016 | 2% |
| Net profit/(loss) from continuing operations | (215) | 210 | -202% |
| Net profit/(loss) for the period | (215) | 210 | -202% |
|
Financial indicators (EUR thousand) |
12 months 2011 | 12 months 2010 | Change% |
| For the reporting period | |||
| Sales | 57 391 | 51 814 | 11% |
| Gross profit | 12 544 | 11 294 | 11% |
| EBITDA | 7 757 | 6 041 | 28% |
| EBITDA (excl. change in goodwill) | 6 967 | 6 041 | 15% |
| Operating profit | 4 233 | 2 760 | 53% |
| Operating profit (excl. change in goodwill) | 3 443 | 2 760 | 25% |
| Net profit/(loss) from continuing operations | 1 683 | (509) | 431% |
| Net profit/(loss) for the period | 1 683 | (146) | 1250% |
| Profitability ratios (%) | Q4 2011 | Q4 2010 |
| Sales growth (%) | 10% | 10% |
| Gross margin (%) | 22% | 23% |
| EBITDA margin (%) (excl. change in goodwill) | 12% | 12% |
| Operating margin (%) (excl. change in goodwill) | 6% | 7% |
| Net margin (%) | -1% | 1% |
| ROA (%) | 0% | 0% |
| ROE (%) | -1% | 1% |
| Earnings per share EUR | (0.01) | 0.01 |
| Profitability ratios (%) | 12 months 2011 | 12 months 2010 |
| Sales growth (%) | 11% | 0% |
| Gross margin (%) | 22% | 22% |
| EBITDA margin (%) (excl. change in goodwill) | 12% | 12% |
| Operating margin (%) (excl. change in goodwill) | 6% | 5% |
| Net margin (%) | 3% | 0% |
| ROA (%) | 2% | 0% |
| ROE (%) | 4% | 0% |
| Earnings per share EUR | 0.06 | (0.01) |
Formulas used to calculate the financial ratios:
| Sales growth (%) | (sales 2011 – sales 2010)/ sales 2010*100 | |
| Gross margin (%) | gross profit/sales*100 | |
| Net margin (%) | net profit/sales*100 | |
| EBITDA margin (%) | EBITDA (excl. change in goodwill)/sales*100 | |
| Operating margin (%) | Operating profit (excl. change in goodwill)/sales*100 | |
| Earnings per share | net profit/average number of shares | |
| ROA (%) | net profit/average assets *100 | |
| ROE (%) | net profit/average equity *100 | |
|
Financial indicators (EUR thousand) |
31.12.2011 | 31.12.2010 | Change % |
| As of the end of the period | |||
| Current assets | 12 523 | 12 729 | -2% |
| Non-current assets | 68 986 | 73 253 | -6% |
| Total assets | 81 509 | 85 982 | -5% |
| Current liabilities | 16 547 | 16 018 | 3% |
| Non-current liabilities | 26 574 | 33 665 | -21% |
| Total liabilities | 43 121 | 49 683 | -13% |
| Equity | 38 388 | 36 299 | 6% |
| Financial position ratios (%) | 31.12.2011 | 31.12.2010 |
| Equity ratio (%) | 47% | 42% |
| Liquidity ratio | 0.8 | 0.8 |
| Debt to equity ratio (%) | 83% | 107% |
| Debt to capital ratio (%) | 43% | 48% |
Formulas used to calculate the financial ratios:
| Equity ratio (%) | equity / (liabilities + equity)* 100 |
| Liquidity ratio | current assets/current liabilities |
| Debt to equity ratio (%) | interest bearing liabilities /equity*100 |
| Debt to capital ratio (%) |
interest bearing liabilities –cash and cash equivalents (net debt)/ (net debt+ equity)*100 |
The year 2011 was a year of restored growth for Ekspress Group. The improved economic environment helped the company to earn a net profit for the first time since the beginning of the economic crisis. Our net profit totalled EUR 1.7 million as compared to the loss of EUR 0.1 million in 2010. Our EBITDA growth was 28% as compared to last year, totalling EUR 7.8 million as compared to EUR 6.0 million in 2010. The company’s sales increased by 11%, totalling EUR 57.4 million as compared to EUR 51.8 last year. In 2011, sales exceeded the budget by 2%.
The operating results of 2011 were impacted by several extraordinary activities.
- The net extraordinary gain arising from the revaluation profit of ownership in Eesti Päevalehe AS and the impairment loss recognised for goodwill of Eesti Päevaleht, Lithuanian magazine publisher Ekspress Leidyba and Delfi Latvia in amount EUR 790 thousand;
- Information technology developments made previously at Eesti Päevalehe AS were written down in the amount of EUR 270 thousand;
- We incurred extraordinary one-off expenses in the amount of ca EUR 150 thousand related to the merger and relocation of the editorial offices of Eesti Päevalehe AS and AS Eesti Ajalehed.
Excluding the net result attributable to revaluation gain and change in goodwill, we earned normalised EBITDA in the amount of EUR 7.0 million which is 15% higher than last year and net profit from continuing operations in the amount of EUR 0.9 million, which is EUR 1.5 million higher than last year. The EBITDA margin increased by 0.6% in 2011.
In 2011, the company’s restructuring process which had already been launched two years ago, continued.
In the periodicals segment, the most significant event was the acquisition of an ownership interest in Eesti Päevalehe AS at the beginning of the year. This acquisition was a cash-free transaction. The former co-shareholder Jaan Manitski’s company OÜ Vivarone acquired the real estate property previously in the ownership of Eesti Päevalehe AS (also current premises used by the editorial office) and AS Ekspress Grupp acquired the shares of Eesti Päevalehe AS from OÜ Vivarone previously held by the latter. As a consequence of the merger of Eesti Päevalehe AS and AS Eesti Ajalehed in the second half of the year, we managed to stabilise the economic activities of the newspaper Eesti Päevaleht and considerably improve the organisational efficiency of these two companies due to their merger. The estimated net gain from the acquisition of Eesti Päevalehe AS and its merger with AS Eesti Ajalehed is almost EUR 0.4 million for the year, manifested primarily in the improvement of efficiency. In addition to attainment of organisational efficiency, the merger enabled us to launch joint marketing packages both in the sale of advertisements as well as newspaper subscriptions, which had previously been independent of each other. More specifically, this manifests itself in cross-marketing of the newspapers published by AS Eesti Ajalehed as well as in preparation of joint product packages, the best example of which is the joint subscription packages of digital newspapers of Eesti Päevaleht and Eesti Ekspress.
In 2011, the second most important focus in the operations of the periodicals segment was development of digital newspapers. The digital products in our product portfolio include pay-per-read articles, the access to which can be bought through the newspapers’ online pages, digital newspapers of Eesti Ekspress and Eesti Päevaleht which can be accessed through web browsers to be read in personal computers and the applications of Eesti Ekspress, Eesti Päevaleht and Ärileht for tablet computers. Based on the results of operations for the year 2011, we can state that Ekspress Grupp is the pioneer of digital publishing of periodicals. A significant acknowledgement of our digital product development was the ninth place won by Eesti Ekspress iPad application in the global digital publications contest WAN-IFRA XMA Cross Media Awards 2011, where our competitors were large, globally well-known publications. We also consider development of the time-based paywall for consumption of the digital content which we have created and the marketing chain based thereon to be unique in the world. However, the contribution of digital publishing revenue to the total periodicals segment is still insignificant.
During the restructuring of the periodicals segment, we decided to combine the separate book-publishing operations of newspapers into one entity, for the purpose of which we set up a new private limited company Hea Lugu. For the purpose of comparability, we shall treat this company as well as Eesti Päevalehe AS together with AS Eesti Ajalehed.
In the online segment, the key event was the recovery of EBITDA growth of Delfi Latvia. The sales of Delfi Latvia increased by 20% as compared last year, but while Delfi Latvia still incurred a EBITDA loss of EUR 107 thousand in 2010, it ended the year 2011 with a EBITDA profit of EUR 230 thousand. We consider the change in the concept of Delfi Ukraine as another important development, which has created an opportunity for a stable increase in the number of portal users, especially in the last months of the year. Advertising sales are also slowly picking up. The launching of Delfi digital book store at Delfi Estonia is also worth mentioning. During the first four months of its operation, Delfi Digiraamat achieved the third place in the terms of the number of books sold in the e-book market. In 2012, the plan calls for launching digital book stores also in Latvia and Lithuania. The sales in the online segment as a whole increased by 14% and EBITDA more than doubled.
In the printing services segment, AS Printall’s success in the export markets continued. Both the company’s sales as well as EBITDA increased by 15% as compared to last year. The key to Printall’s successful results of operations lies in its high-quality export products, which the efficiently managed company is able to sell at competitive prices. Sales increased in all export markets. The largest markets continued to be Scandinavia and Russia, while the Netherlands and France have also become important markets. In the last quarter, exports made up 72% of the company’s sales and the contribution made by group companies was 15%. The sales and net profit of Printall contribute significantly to the Group’s total results of operations.
With regard to the cost structure of group companies, the greatest changes were related to the amendment of the Lithuanian tax laws, which increased Delfi Lithuania’s liabilities in the form of the social tax, as well as the addition of the local news portal Eesti Elu acquired by Delfi Estonia to the cost base and the addition of rental expenses to the expenses of AS Eesti Ajalehed (Eesti Päevalehe AS used to be located on its own premises and did not incur any rental expenses). The other changes occurred in the expenses were primarily related to the growth of business; no major growth of in the number of employees or their wages occurred in 2011.
In 2012, we expect conservative sales growth in the periodicals and online segments. Sales of periodicals are expected to increase due the recovery of advertising sales in the second half of the year just ended, which should also continue modestly this year. In the printing services segment, we do not expect any major growth due to the printing companies operating nearly at full capacity in peak periods. However, we expect the Group’s EBITDA margin to grow by 1-2 percentage points this year, because we do not see any major sources of expense growth. Our objective in 2012 is to increase the efficiency of the online segment, continue the development of Delfi Ukraine and improve the efficiency of its advertising sales, increase the number of subscribers of digital publications and grow revenue in the periodicals segment, and take the united editorial offices to the next level on the basis of our media brands.
Overview of the Group’s segments
Key financial data of the segments in Q4 2010/2011
| (EUR thousand) | Sales | ||
| Q4 2011 | Q4 2010 | Change% | |
| online media | 2 586 | 2 302 | 12% |
| periodicals | 6 544 | 6 051 | 8% |
| printing services | 8 143 | 7 230 | 13% |
| corporate functions | 71 | 31 | 129% |
| intersegment eliminations | (1 031) | (729) | -41% |
| TOTAL | 16 313 | 14 885 | 10% |
| (EUR thousand) | EBITDA | ||
| Q4 2011 | Q4 2010 | Change% | |
| online media | 696 | 302 | 130% |
| periodicals | 62 | 253 | -75% |
| printing services | 1 495 | 1 529 | -2% |
| corporate functions | (1 018) | (236) | -331% |
| intersegment eliminations | 1 | 6 | -83% |
| TOTAL | 1 236 | 1 854 | -33% |
Key financial data of the segments for the 12 months of 2010/2011
| (EUR thousand) | Sales | ||
| 12 months 2011 | 12 months 2010 | Change% | |
| online media | 8 977 | 7 884 | 14% |
| periodicals | 24 069 | 22 520 | 7% |
| printing services | 27 736 | 24 221 | 15% |
| corporate functions | 209 | 129 | 62% |
| intersegment eliminations | (3 600) | (2 940) | -22% |
| TOTAL | 57 391 | 51 814 | 11% |
| (EUR thousand) | EBITDA | ||
| 12 months 2011 | 12 months 2010 | Change% | |
| online media | 1 425 | 758 | 88% |
| periodicals | 552 | 914 | -40% |
| printing services | 5 959 | 5 198 | 15% |
| corporate functions | (191) | (833) | 77% |
| intersegment eliminations | 12 | 4 | 200% |
| TOTAL | 7 757 | 6 041 | 28% |
| EBITDA margin | Q4 2011 | Q4 2010 |
| online media | 27% | 13% |
| periodicals | 1% | 4% |
| printing services | 18% | 21% |
| EBITDA margin | 12 months 2011 | 12 months 2010 |
| online media | 16% | 10% |
| periodicals | 2% | 4% |
| printing services | 21% | 21% |
The segments’ EBITDA does not include goodwill impairment. This is included within the corporate function. The segment results do not include intragroup management fees. Volume-based and other fees payable to advertising agencies have not been deducted from the advertising sales of segments.
News portals owned by the Group
| Owner | Portal | Owner | Portal |
| Delfi Estonia | www.delfi.ee | Eesti Ajalehed AS | www.ekspress.ee |
| rus.delfi.ee | www.maaleht.ee | ||
| Delfi Latvia | www.delfi.lv | www.epl.ee | |
| rus.delfi.lv | AS SL Õhtuleht | www.ohtuleht.ee | |
| Delfi Lithuania | www.delfi.lt | ||
| ru.delfi.lt | |||
| Delfi Ukraine | www.delfi.ua |
Online media segment
The online media segment includes Delfi operations in Estonia, Latvia, Lithuania and Ukraine.
| (EUR thousand) | Sales | ||
| Q4 2011 | Q4 2010 | Change% | |
| Delfi Estonia | 913 | 783 | 17% |
| Delfi Latvia | 591 | 513 | 15% |
| Delfi Lithuania | 1 054 | 1 000 | 5% |
| Delfi Ukraine | 17 | 11 | 55% |
| other Delfi companies | 11 | 22 | -50% |
| intersegment eliminations | 0 | (27) | 100% |
| TOTAL | 2 586 | 2 302 | 12% |
| (EUR thousand) | EBITDA | ||
| Q4 2011 | Q4 2010 | Change% | |
| Delfi Estonia | 117 | 20 | 485% |
| Delfi Latvia | 135 | 16 | 744% |
| Delfi Lithuania | 285 | 252 | 13% |
| Delfi Ukraine | (62) | (138) | 55% |
| other Delfi companies | 221 | 155 | 42% |
| intersegment eliminations | 0 | (3) | - |
| TOTAL | 696 | 302 | 130% |
| (EUR thousand) | Sales | ||
| 12 months 2011 | 12 months 2010 | Change% | |
| Delfi Estonia | 3 177 | 2 643 | 20% |
| Delfi Latvia | 2 014 | 1 681 | 20% |
| Delfi Lithuania | 3 703 | 3 463 | 7% |
| Delfi Ukraine | 56 | 35 | 60% |
| other Delfi companies | 26 | 151 | -83% |
| intersegment eliminations | 1 | (89) | 101% |
| TOTAL | 8 977 | 7 884 | 14% |
| (EUR thousand) | EBITDA | ||
| 12 months 2011 | 12 months 2010 | Change% | |
| Delfi Estonia | 154 | 56 | 175% |
| Delfi Latvia | 230 | (106) | 317% |
| Delfi Lithuania | 653 | 737 | -11% |
| Delfi Ukraine | (259) | (522) | 50% |
| other Delfi companies | 647 | 594 | 9% |
| intersegment eliminations | 0 | (1) | - |
| TOTAL | 1 425 | 758 | 88% |
Throughout the year, the main drivers behind the sales and EBITDA growth of the online segment were Delfi Estonia and Latvia. In Lithuania, the sales growth has been modest and the margin has been impacted by the increase in staff costs arising from the changes in taxation of employee compensations. Ukraine reduced its loss by almost half due to the layoffs in the editorial staff at the beginning of the year. In summary, it can be said about the online media segment that Delfi Estonia and Latvia have started to demonstrate better results due to the improvement of the economic environment and the market has started to recover slightly in Lithuania. Delfi Ukraine continues to increase the number of its users; however, it will take a while before advertising revenue catches up. The ongoing focus of the editorial staff of Delfi is to improve the quality of their products and news.
The key highlights during the year worth mentioning separately include:
· Advertising sales were launched in Delfi’s mobile environments. The sales of video advertisements were also launched, creating better opportunities for the online segment to participate in the television advertising market. The growth of mobile advertisements has been aggressive, yet modest in absolute numbers.
· An important product development upgrade included the environment for collecting and displaying pictures, videos and anecdotes sent by users (in the portal vimka.ee in Estonia).
· Special vouchers were introduced under the trademark of Delfi Diil in all three Baltic States and in addition, the environment for aggregation of discount vouchers was launched where advertisements are sold to other companies offering discount vouchers.
· A new system of user comments was created, allowing users with a registered user identity to comment on the articles. The users can authorise themselves and make comments using the user names of the most popular social networks, such as Facebook, Twitter, draugiem.lv and odnoklasniki.ru.
· Integration with Facebook’s environment where since June it is possible to read the news produced by the company as well as the news posted by the user’s Facebook friends without exiting Delfi website.
· Additional fee-based services in the classified ads portals Müü!; Pardod!; Parduok! and Prodai! were introduced in all countries.
Delfi Estonia
· Delfi Estonia has become the website with the largest number of visitors, surpassing neti.ee in terms of the number of weekly users.
· During the organisational reform, the editorial office of Delfi was relocated to the joint premises with Eesti Ekspress, Eesti Päevaleht and Maaleht. Due to the relocation of the editorial offices to the same premises, the exchange of information and cooperation among various publications in covering major events has significantly improved.
· For the purpose of creating IT synergies, the web environments of Eesti Ekspress, Eesti Päevaleht and Maaleht have been moved to Delfi’s portal platform and the articles published in newspapers are also published in Delfi’s news feed.
· The e-business department of Delfi Estonia was launched with the goal of collaborating with the best online businesses and earning from e-commerce in addition to earning regular advertising revenue. In 2011, the most successful project was the development of the sales environment of e-books, Delfi Digiraamat. Delfi Digiraamat represents a cooperation project of the Estonian Digital Book Centre and Delfi, where Delfi sells all e-books digitalised or purchased for resale by the EDBC. At Delfi Digiraamat, it is possible to buy the majority of e-books published in Estonia
· A new advertising and content section "Reisileidja" (Trip Finder) was introduced which has received good feedback from tourist companies and generated new advertising revenue for Delfi.
· In the 1st quarter, Delfi Estonia acquired the portal Eesti Elu, which was used as the basis for developing a hyperlocal news portal, and which is becoming more and more popular.
· From October, Delfi news is displayed on the screens of city buses.
· In cooperation with SEB Charity Fund, Delfi Estonia successfully implemented a cooperation project “Christmas Wish Tree”, with the objective to provide Christmas presents to 1000 children and young people without parental care. Delfi readers donated more than EUR 30 thousand in support of the project.
At the end of 2011, Delfi Estonia became the most visited website, surpassing neti.ee with its weekly number of users. During 2011, the number of users of Delfi.ee has on average increased by 100 000 users a week. Two media publications - Delfi and Postimees – dominate the market. The most important developments in the Internet market have been related to the development of mobile environments, because the growth of smart phones as well as tablet computers continues at a fast pace. In 2012, the share of media consumption on mobile phones is expected to grow the fastest.
Delfi Latvia
· Delfi Latvia was awarded the special prize at the annual awards of the Latvian Journalist Association “Best Economic Publication of the Year”.
· The Latvian Journalist Association recognised Delfi as the best publication to report on EU topics.
· Upgrades in the product design with enhancement of content quality have helped the company to reach the highest number of views per page among Latvian news portals.
· Collaboration projects in different fields:
o With the help of the EU subsidy, the portal Morning.lv was launched with the goal of communicating information related to the European Parliament.
o Delfi Latvia was selected as the media partner for the Latvian Olympic Committee in arranging the ceremony “Athlete of the Year”.
o Collaboration project “Road reporter” with TV3+ on national journalism.
The most popular website among the Latvian Internet users continues to be the e-mail environment Inbox.lv despite the fact that it lost ca 50 thousand users during the year. In terms of the number of users, the social network draugiem.lv still holds the second place but due to the growth of use of international social networks, the number of users of Draugiem is expected to fall – by ca 100 thousand as compared to last year. Delfi.lv continues to be the most popular news portal with its number of users remaining almost at the same level as last year. However, important changes occurred in the Latvian media market in 2011. Schibsted Media Group acquired the Latvian news portal tvnet.lv in March 2011 and the Russian language news portal novonews.lv in October, increasing its number of users by ca 50 thousand users with these acquisitions. The second acquisition in the field of online media occurred in September 2011, when Sanoma News acquired the second most-popular news portal apollo.lv.
Delfi Lithuania
· In the first quarter, Delfi Lithuania launched the women’s news portal www.5braskes.lt with the goal of increasing its market share primarily targeted at women.
· In December, Delfi Lithuania was selected as the partner for MAMA 2011, the largest Lithuanian music awards gala which took place in Vilnius.
· From November, the new CEO of Delfi Lithuania is Aleksandras Česnavičius.
· From October, the news of Delfi Lithuania has been integrated into the popular IP TV “Gala” in Lithuania, where the readers can read Delfi news while watching TV.
· From October, the company started active cooperation with the Lithuanian national television.
Delfi continues to be the uncontested market leader among Lithuanian Internet users with more than one million unique users. The key event in the Lithuanian market was the arrangement of the European Basketball Championship; however, the activity of Internet users did not increase significantly. This can be attributed to the very good coverage of the games on home soil.
Delfi Ukraine
· In the 1st quarter, an important conceptual change was implemented, and a product and organisational reform was launched. The former conservative information portal strategy was abandoned and a more entertaining news portal with tabloid-like news with a social content was launched. The product was made more tabloid-like than it is normally customary in the Baltic States. The market reception of the new product has been good, manifested in the steady growth of unique users. In December, Delfi Ukraine had the highest number of visitors ever during its history.
· In November, cooperation with Tochka was launched.
The Ukrainian Internet market operates in a significantly different manner than that of the Baltic States. Considerably less attention is paid to local media publications than the so-called “aggregators” which aggregate the news of media publication on their pages. During the year, several changes have occurred in the staffs and strategies of the market participants. The formerly popular concept of “buying readers” has become less widespread and therefore, the readership of media publications is beginning to resemble the actual real readership. In this light, it is good to acknowledge that Delfi’s long-term strategy to attract loyal users has started to show positive results and the steady growth of readers is turning Delfi into a serious market contender in Ukraine.
Periodicals segment
The periodicals segment includes the publishers of newspapers, magazines and books. This segment also includes AS Express Post, engaged in home delivery of periodicals.
In September, the Estonian Competition Authority granted its permission for the concentration of Eesti Päevalehe AS and Eesti Ajalehed AS. As of 1 October, these two companies were merged. As of 1 October, the book publishing department of the merged company was spun off as a separate legal entity. The new book publisher under the name of OÜ Hea Lugu will remain as the subsidiary of Eesti Ajalehed AS. The merger of the joint ventures AS SL Õhtuleht and AS Linnaleht occurred on 1 November 2011 and that of OÜ Uniservice and AS Ajakirjade Kirjastus occurred on 1 January 2012.
At the beginning of the year, a preliminary contract to sell Express Post AS was concluded with AS Eesti Post, which however was prohibited by the Competition Authority in autumn. Both shareholders of Express Post are currently considering various alternative scenarios to determine the future activities of the company.
| (EUR thousand) | Sales | ||
| Q4 2011 | Q4 2010 | Change% | |
| Eesti Ajalehed AS** | 3 330 | 3 733 | -11% |
| SL Õhtuleht AS* | 915 | 887 | 3% |
| AS Ajakirjade Kirjastus* | 1 206 | 1 243 | -3% |
| UAB Ekspress Leidyba | 742 | 691 | 7% |
| AS Express Post* | 628 | 644 | -2% |
| OÜ Uniservice* | 0 | 4 | -100% |
| intersegment eliminations*** | (277) | (1 151) | 76% |
| TOTAL | 6 544 | 6 051 | 8% |
| (EUR thousand) | EBITDA | ||
| Q4 2011 | Q4 2010 | Change% | |
| Eesti Ajalehed AS** | (192) | 3 | -6510% |
| SL Õhtuleht AS* | 62 | 57 | 9% |
| AS Ajakirjade Kirjastus* | 102 | 77 | 32% |
| UAB Ekspress Leidyba | 12 | (18) | 167% |
| AS Express Post* | 82 | 79 | 4% |
| OÜ Uniservice* | 0 | (1) | 100% |
| intersegment eliminations*** | (4) | 56 | - |
| TOTAL | 62 | 253 | -75% |
| (EUR thousand) | Sales | ||
| 12 months 2011 | 12 months 2010 | Change% | |
| Eesti Ajalehed AS** | 12 761 | 14 001 | -9% |
| SL Õhtuleht AS* | 3 432 | 3 441 | 0% |
| AS Ajakirjade Kirjastus* | 4 190 | 4 370 | -4% |
| UAB Ekspress Leidyba | 2 816 | 2 725 | 3% |
| AS Express Post* | 2 396 | 2 417 | -1% |
| OÜ Uniservice* | 9 | 12 | -25% |
| intersegment eliminations*** | (1 535) | (4 446) | 65% |
| TOTAL | 24 069 | 22 520 | 7% |
| (EUR thousand) | EBITDA | ||
| 12 months 2011 | 12 months 2010 | Change% | |
| Eesti Ajalehed AS** | (211) | 42 | -603% |
| SL Õhtuleht AS* | 203 | 269 | -25% |
| AS Ajakirjade Kirjastus* | 164 | 168 | -2% |
| UAB Ekspress Leidyba | 14 | (317) | 104% |
| AS Express Post* | 290 | 297 | -2% |
| OÜ Uniservice* | 1 | (6) | 117% |
| intersegment eliminations*** | 91 | 461 | - |
| TOTAL | 552 | 914 | -40% |
*Proportionate share of joint ventures
** For the purpose of comparability, Eesti Ajalehed AS combines the data for Eesti Ajalehed AS, Eesti Päevalehe AS (100% in both years) with that of Hea Lugu OÜ.
***Intra-segment eliminations in EBITDA include the elimination of the 50% negative EBITDA of Eesti Päevalehe AS and the sales loss of the trademark of Ekspress Leidyba UAB in 2010, and the 50% negative EBITDA of Eesti Päevalehe AS and restatement of the goodwill which arose on acquisition of an ownership interest in Eesti Päevalehe AS in 2011.
In 2011, the periodicals segment grew and this primarily due to the acquisition of an additional 50% ownership interest of Eesti Päevalehe AS. Without this change, the segment’s results would have remained below last year’s results. While the advertising sales recovered in 2011, the decline in book publishing as well as in circulation and revenue of printed newspapers and magazines continued. In the 4th quarter, EBITDA was negatively affected by the impairment loss recognised for the client relationship management software of Eesti Päevaleht, and the redundancy and relocation expenses due to the merger of Eesti Päevalehe AS and AS Eesti Ajalehed in the amount of ca EUR 120 thousand.
The Lithuanian publishing company Express Leidyba was the only company in this segment to grow its sales 2011, primarily due to the addition of the magazine Cosmopolitan. Sales declined the most at AS Ajakirjade Kirjastus and Eesti Ajalehed AS combined entity due to the aforementioned decline in the number of published books. Newspapers Maaleht and Eesti Ekspress surprised positively, with the advertising sales up by 14.1% and 9.6%, respectively. At the same time, advertising sales decreased by 3.0% at Õhtuleht and by 6.5% at Eesti Päevaleht. The revenue of single copy sales and subscriptions increased by 3.1% at Maaleht, remained at the same level as in 2010 at Eesti Ekspress and decreased by 2.6% at Õhtuleht and 9.2% at Eesti Päevaleht.
In the 2nd quarter, an important product upgrade was implemented at the newspaper Eesti Päevaleht. Under the guidance of the new editor-in-chief Vallo Toomet who had previously been in charge of economic news, the upgraded Eesti Päevaleht with a more magazine-like format and design was developed and launched. The product upgrade of Eesti Päevaleht was received well in the market, which is evidenced by the fact that Eesti Päevaleht was the only national daily newspaper whose readership increased in the 3rd quarter.
In 2011, Janek Luts who had formerly worked as the editor-in-chief of Kuku Raadio became the editor-in-chief of Eesti Ekspress.
A joint digital newspaper campaign of Eesti Päevaleht and Eesti Ekspress was launched, where subscribers can buy the tablet PC Apple iPad at a special price. A software solution was also developed, enabling to use the product published on iPad from regular desktop or laptop computers.
The creation of the multi-media news space across the media units based in Estonia was also successfully launched. The editorial offices of various publications were relocated to common premises at the end of the 2nd quarter, followed by content integration and cooperation between different editorial offices and their people.
Estonian newspaper circulation 2010-2011
The year 2011 was a year of relative stabilisation in the Estonian newspaper market. The circulation of major publications declined slightly, but not significantly. Postimees continues to be the newspaper with the highest circulation. In terms of comparison of the annual average circulation, Eesti Päevaleht was the biggest loser as compared to 2010. This decline was to be expected because the acquisition of the 100% ownership interest of the newspaper by Ekspress Grupp, the replacement of the editor-in-chief as well as the review of the concept of the newspaper always translates into losses in circulation.
Circulation is also affected by the continued decline of point of sales all over Estonia.
Estonian newspaper readership 2010-2011
In the 4th quarter, the total reach of publications included in the reader surveys of TNS Emor was 62% of the population. In a year-over-year comparison, this translates into ca 20 thousand people abandoning printed newspapers. This confirms the international trend of a declining number of readers of printed newspapers in developed countries. Although the trend of readers is still downward, printed newspapers are still competitive in the advertising market in many respects, meaning that fast disappearance of printed newspapers is not yet to be expected. The readership figures for 2011 vary from quarter to quarter, showing that the consumption of printed newspapers is becoming more cyclical in nature than we have previously witnessed. However, these figures concern just the readers of printed newspapers. As Ekspress Grupp is developing the digital versions of its newspapers for the second consecutive year already, we are more optimistic about the future than the current readership figures indicate.
Ekspress Group Lithuanian magazine readership 2010-2011
The readership figures in the last quarter of 2011 have increased significantly – as compared to the previous quarters, the readership of all magazines of Ekspress Leidyba has increased by 21% which is a very good result. However, as compared to the last year, the readership figures have stayed at the same level. Of the monthly magazines, Panele and Moteris are Lithuanian most popular publications.
Printing services segment
All printing services of AS Ekspress Grupp are provided by AS Printall which is one of the largest printing companies in Estonia. Printall is able to print both newspapers (coldset) and magazines (heatset).
| (EUR thousand) | Sales | ||
| Q4 2011 | Q4 2010 | Change% | |
| AS Printall | 8 143 | 7 230 | 13% |
| (EUR thousand) | EBITDA | ||
| Q4 2011 | Q4 2010 | Change% | |
| AS Printall | 1 495 | 1 529 | -2% |
| (EUR thousand) | Sales | ||
| 12 months 2011 | 12 months 2010 | Change% | |
| AS Printall | 27 736 | 24 221 | 15% |
| (EUR thousand) | EBITDA | ||
| 12 months 2011 | 12 months 2010 | Change% | |
| AS Printall | 5 959 | 5 198 | 15% |
The printing company Printall continues to exceed previous year’s results. Both sales as well as EBITDA increased by 15%. The share of group companies in sales decreases and the share of exports increases. Most of the volume growth is generated by printing on heatset machines, but a positive trend in 2011 was the modest capacity growth of coldset machines as compared to the decline in previous years.
Geographical break-down of printing services
| Q4 2011 | Q4 2010 | Change% | |
| Exports | 5 630 | 4 779 | 18% |
| Finland | 688 | 424 | 62% |
| Sweden | 1 504 | 1 363 | 10% |
| Norway | 802 | 850 | -6% |
| Russia | 1 117 | 983 | 14% |
| Denmark | 182 | 301 | -40% |
| Lithuania | 219 | 177 | 24% |
| Other exports | 1 118 | 681 | 64% |
| Estonia | 2 513 | 2 451 | 3% |
| Total sales | 8 143 | 7 230 | 13% |
| Incl. group sales | 1 034 | 1 040 | -1% |
| Incl. non-group sales | 7 109 | 6 190 | 15% |
| 12 months 2011 | 12 months 2010 | Change% | |
| Exports | 18 691 | 15 571 | 20% |
| Finland | 2 248 | 1 816 | 24% |
| Sweden | 5 069 | 4 388 | 16% |
| Norway | 2 969 | 3 041 | -2% |
| Russia | 4 194 | 3 100 | 35% |
| Denmark | 742 | 991 | -25% |
| Lithuania | 771 | 638 | 21% |
| Other exports | 2 698 | 1 597 | 69% |
| Estonia | 9 045 | 8 650 | 5% |
| Total sales | 27 736 | 24 221 | 15% |
| Incl. group sales | 3 993 | 4 010 | 0% |
| Incl. non-group sales | 23 743 | 20 211 | 17% |
Consolidated balance sheet (unaudited)
|
(EUR thousand) |
31.12.2011 | 31.12.2010 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 2 729 | 2 767 |
| Trade and other receivables | 6 921 | 6 941 |
| Inventories | 2 833 | 2 961 |
| Total | 12 483 | 12 669 |
| Non-current assets held for sale | 40 | 60 |
| Total current assets | 12 523 | 12 729 |
| Non-current assets | ||
| Term deposit (Note 7) | 98 | 3 009 |
| Trade and other receivables | 167 | 162 |
| Investments in associates | 0 | 8 |
| Property, plant and equipment (Note 6) | 16 751 | 19 138 |
| Intangible assets (Note 6) | 51 970 | 50 936 |
| Total non-current assets | 68 986 | 73 253 |
| TOTAL ASSETS | 81 509 | 85 982 |
| LIABILITIES | ||
| Current liabilities | ||
| Borrowings (Note 7) | 5 436 | 5 233 |
| Trade and other payables | 11 111 | 10 785 |
| Total current liabilities | 16 547 | 16 018 |
| Non-current liabilities | ||
| Long-term borrowings (Note 7) | 26 397 | 33 053 |
| Other long-term liabilities | 1 | 2 |
| Derivate instruments | 176 | 610 |
| Total non-current liabilities | 26 574 | 33 665 |
| Total liabilities | 43 121 | 49 683 |
| EQUITY | ||
| Share capital (Note 10) | 17 878 | 19 044 |
| Share premium | 14 277 | 14 277 |
| Reserves (Note 10) | 480 | 46 |
| Retained earnings | 5 749 | 2 900 |
| Currency translation reserve | 4 | 32 |
| Total equity | 38 388 | 36 299 |
| TOTAL LIABILITIES AND EQUITY | 81 509 | 85 982 |
Consolidated statement of comprehensive income (unaudited)
|
(EUR thousand) |
Q4 2011 | Q4 2010 | 12 months 2011 | 12 months 2010 |
| Sales | 16 313 | 14 885 | 57 391 | 51 814 |
| Cost of sales | (12 653) | (11 419) | (44 847) | (40 520) |
| Gross profit | 3 660 | 3 466 | 12 544 | 11 294 |
| Marketing expenses | (649) | (640) | (2 098) | (2 242) |
| Administrative expenses | (1 929) | (1 782) | (7 081) | (6 435) |
| Other expenses | (343) | (147) | (542) | (270) |
| Other income | 298 | 119 | 620 | 413 |
| Gain from sale of ownership in joint venture (Note 3) | 0 | 0 | 1 540 | 0 |
| Impairment loss for goodwill (Note 6) | (750) | 0 | (750) | 0 |
| Operating profit | 287 | 1 016 | 4 233 | 2 760 |
| Interest income | 12 | 31 | 45 | 52 |
| Interest income | (523) | (639) | (2 212) | (2 596) |
| Foreign exchange gains (losses) | 73 | 16 | 45 | 16 |
| Other finance costs | (47) | (39) | (154) | (175) |
| Net finance cost | (485) | (631) | (2 276) | (2 702) |
| Profit/(loss) from investments in associates | (8) | (11) | (52) | (33) |
| Profit (loss) before income tax | (206) | 374 | 1 905 | 25 |
| Income tax expense | (9) | (164) | (222) | (534) |
| Profit (loss) from continuing operations | (215) | 210 | 1 683 | (509) |
| Profit (loss) from discontinued operations | 0 | 0 | 0 | 363 |
| Profit (loss) for the reporting period | (215) | 210 | 1 683 | (146) |
| Net profit (loss) for the reporting period attributable to: | ||||
| equity holders of the parent company | (215) | 228 | 1 683 | (128) |
| non-controlling interest | 0 | (18) | 0 | (18) |
| Other comprehensive income (expense) | ||||
| Currency translation differences | (63) | (14) | (28) | (73) |
| Hedging reserve change | 63 | 284 | 434 | 284 |
| Total other comprehensive income (expense) for the period | 0 | 270 | 406 | 211 |
| Comprehensive income for the reporting period attributable to: | (215) | 480 | 2 089 | 64 |
| equity holders of the parent company | (215) | 498 | 2 089 | 82 |
| non-controlling interest | 0 | (18) | 0 | (18) |
| Basic and diluted earnings per share (Note 9) | (0,01) | 0,01 | 0,06 | (0,01) |
Consolidated cash flow statement (unaudited)
| (EUR thousand) | 12 months 2011 | 12 months 2010 |
| Cash flows from operating activities from continuing operations | ||
| Operating profit (loss) for the period | 4 233 | 2 760 |
| Adjustments for: | ||
| Depreciation, amortisation and impairment (Note 6) | 3 524 | 3 282 |
| Gain from sale of ownership in joint venture and change in goodwill (Note 6) | (790) | 0 |
| Profit (loss) on sale and write-downs of property, plant and equipment | 249 | 20 |
| Changes in working capital: | ||
| Trade and other receivables | (121) | 1 191 |
| Inventories | 249 | (265) |
| Trade and other payables | (690) | (1 917) |
| Cash generated from operations | 6 654 | 5 071 |
| Income tax paid | (98) | (365) |
| Interest paid | (2 318) | (2 596) |
| Net cash generated from operating activities from continuing operations | 4 238 | 2 109 |
| Net cash used in operating activities from discontinued operations | 0 | (160) |
| Cash flows from investing activities | ||
| Investments in subsidiaries and joint ventures (Notes 3,4) | (26) | 0 |
| Term deposit release/placement) (Note 7) | 1 500 | (3 000) |
| Proceeds from sale of shares in subsidiaries (Note 5) | 0 | 3 980 |
| Interest received | 51 | 62 |
| Purchase of property, plant and equipment (Note 6) | (914) | (581) |
| Proceeds from sale of property, plant and equipment | 92 | 542 |
| Loans granted | (30) | (39) |
| Loan repayments received | 126 | 648 |
| Net cash used in investing activities from continuing operations | 799 | 1 611 |
| Net cash generated from investing activities from discontinued operations | 0 | 0 |
| Cash flows from financing activities from continuing operations | ||
| Issue of shares | 0 | 5 248 |
| Finance lease repayments made | (1 245) | (1 279) |
| Change in overdraft used | (712) | (1 879) |
| Proceeds from borrowings | 90 | (245) |
| Repayments of borrowings | (3 208) | (5 188) |
| Net cash used in financing activities from continuing operations | (5 075) | (3 342) |
| Net cash used in financing activities from discontinued operations | 0 | (5) |
| NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (38) | 214 |
| Cash and cash equivalents at the beginning of the period | 2 767 | 2 553 |
| Cash and cash equivalents at the end of the period | 2 729 | 2 767 |
Additional information:
Gunnar Kobin
Chairman of the Management Board
GSM: +372 5188111
e-mail: gunnar@egrupp.ee
