Tallinn, Estonia, 2015-10-30 15:00 CET (GLOBE NEWSWIRE) --
The 3rd quarter of 2015 was very successful for the Group. The consolidated EBITDA amounted to EUR 2.1 million, increasing by 24% as compared to the same period last year. Net profit almost doubled and amounted to EUR 1.2 million. After elimination of the loss related to Titanic exhibition in the amount of EUR 1.1 million that was recognised in the first half of 2015, the Group’s EBITDA and net profit exceeded the result of last year’s 9 months by 2% and 12%, respectively. This result is especially noteworthy because the share of the media sector in the consolidated result has increased to the extent that can to cover a significant decline in the printing services segment. The share of revenue of the media sector has increased from 57% to 60% as compared to the 9 months of last year, and that of EBITDA from 37% to 48%. The 3rd quarter was especially successful in online media. We are also pleased with the growth in newspaper advertising revenue.
Under the equity method, the EBITDA of the Group’s subsidiaries was 27% higher in the 3rd quarter than last year and revenue increased by 2%. Net profit growth reached 84%.
All publishing companies in the media segment throughout the Baltics posted very strong revenue growth in the 3rd quarter, ranging from 7-22%. Ekspress Meedia consisting of AS Delfi and AS Eesti Ajalehed that were legally merged on 1 July, posted especially strong results with revenue growth of 22% and a fivefold increase in EBITDA. Lithuania is recovering from the euro shock of the beginning of the year, which reflects in increased advertising volumes.
The main success factor for Ekspress Meedia in the 3rd quarter were active sales activities. Online advertising has exceeded our expectations – the key reasons include our good products and the activities of the advertising team as well as the synergy created through the merger of the print and online sales teams. In September, we surprised our readers with the introduction of a more substantial LP newspaper. In autumn, we continued the book series of Maaleht Tarkusepuu, which supports well the retail sales of Maaleht. For Delfi, the main focus was on the major events organised in summer which have increased our visibility as well as a good sales potential through coverage of various events. The key event for the editorial office was the coverage of the European Basketball Championship in Riga in September, where we were visible both in terms of our marketing as well as content. Delfi TV broadcasts were made and subscriptions for our digital products were sold in the Estonian fan tent.
The paper version of Eesti Päevaleht was redesigned. In August, EPL launched a new evening digital paper which occurred for the first time in our market. Maaleht provided more unusual approach, selling a mushroom picking trip for its readers, the groups of which were filled already in the first days.
A new Delfi mobile app for iOS devices is ready to be launched, which should further increase user convenience. One of our priorities is attraction of mobile users and provision of content in mobile devices, as more than 40% of our readers already use mobile platforms.
Delfi Latvia continues the launch of its new topical portals in order to continue to increase the number of its users and advertising revenue. Revenue grew by 7% as compared to the 3rd quarter last year. EBITDA was lower primarily due to on-off expenses related to the costs associated with the launch of new products and developments made as an investment into the future.
In the 3rd quarter, the online revenue of Delfi Lithuania increased by 21% and EBITDA increased by 78% as compared to the same period last year. Changes made in the sales department, the European Basketball Championship, successfully launched content marketing projects and higher demand for video content contributed to successful sales. The Lithuanian print media is still in a downward trend.
In the 3rd quarter we set up a separate company OÜ Zave Media which took over the teams of the commercial offer portal Zave in all three Baltic countries. From autumn, our portals offer search services for our users in three countries not only in respect of special price offers but full product list of retailers, thus helping users more easily find the best seller of the product they need.
With regard to joint ventures, AS SL Õhtuleht increased its advertising revenue by 15% in the 3rd quarter. Growth of advertising revenue is mainly attributable to the change in the work procedures of the advertising department carried out at the end of the last year. Also the growth in volume and revenue of special issues deserves to be mentioned. In September, Õhtuleht stopped cooperation with advertising partners that has not been profitable and, instead, focused on its own network and cooperation with the portals of Ajakirjade Kirjastus. The good work of the editorial department in choosing and covering issues has increased single copy sales revenues. The digital publication of Õhtuleht and Russian-language news portal www.vecherka.ee were launched. Costs related to the new activities have affected EBITDA, but in the long term, they will create an opportunity to generate additional revenues. Starting from 21 September, AS SL Õhtuleht is being managed by Merle Viirmaa who has significant experience in the media sector.
The quarter was also very successful to AS Ajakirjade Kirjastus. Revenue increased 9% and EBITDA grew 93%, as compared to the same period a year earlier. Most of the growth came from monthly magazines. The result of weekly magazines was somewhat more modest. We published several additional magazines and started the publication of Sensa magazine. Content sales of magazines as a whole were 5% higher than last year with subscription revenues playing a key role. Special mention should be made of sharp rise in the number of subscribers of women’s magazine Jana that is targeted at Russian speakers. For boosting retail sales, we launched in the Rimi chain a special stand of Ajakirjade Kirjastus and have carried out several campaigns. The book market is in strong downward trend and in nine months publishing of books has decreased 5% year on year. The company’s recent bestsellers were Mart Sander’s “Litsid” and Khodorkovski’s prison book.
Printall, provider of printing services, is still being affected by the unstable economic situation in Russia and economic sanctions imposed on Russia. Sanctions have had a negative impact on the exports of the Scandinavian printing industry, resulting in the decrease of revenue generated from Russia and, as a consequence, has created a price pressure in the region. In the 3rd quarter, Printall’s revenue fell 13% and EBITDA decreased 11% that is similar to earlier quarters. In spite of fierce price pressure, Printall has managed to maintain their high EBITDA margin. This is the result of bigger efficiency in printing of magazine covers by the new sheet-feed machine. However, development of new products and finding of new customers have taken more than expected.
In September, the joint syndicated loan signed in July 2012 was refinanced. The parties to the contract are still SEB Bank and Nordea Bank. As a result of the transaction, the new maturity date of the loan is October 2020. The new annual loan repayment will be approximately EUR 2 million, or almost EUR 1.6 million less than in the previous contract. Refinancing of the loan will increase the amount of free capital in the company and enables to react in a timely manner to possible investment needs or increase dividends payable to the shareholders. Refinancing of the loan contract became possible because the Group’s loan burden had significantly decreased, making further depreciation of the loan at current rate no longer justified.
Our outlook with regard to the fourth quarter is modest. We still hope to see stable growth of online media and print media, but it may be difficult to reach the result of the 3rd quarter. In the printing services segment, fierce price competition continues in the Scandinavian market and although the closure of printing houses in this region may present additional opportunities for Printall, we still expect revenue to keep decreasing. In the fourth quarter we continue strong development of retail offer portal Zave, investing in recruiting the necessary team. In the final quarter of the year, we expect consolidated revenue to increase by ca 2-3%, which will be led by media segment. However EBITDA will remain smaller by 10-12% compared to year earlier. These figures also include 50% of the results of our joint ventures.
Our mission remains to offer new and interesting experiences both on paper and in digital media, without ever compromising on news quality, choice of topics and journalistic objectivity.
The Group’s goal is to be a truly modern media group with a strong foothold in all markets where actively present, with a leading position in online media.
FINANCIAL INDICATORS AND RATIOS – joint ventures consolidated 50%line-by-line
Starting from 2014, in consolidated financial reports 50% joint ventures are recognised under the equity method, in compliance with new international financial reporting standards (IFRS). In its monthly reports, the management has continued to monitor the Group’s performance on a basis of proportional consolidation of joint ventures and the syndicated loan contract also determines the calculation of loan covenants by proportional consolidation. For the purpose of clarity, the management report shows two sets of indicators: one where joint ventures are consolidated line-by-line 50% as previously and the other where joint ventures are recognised under the equity method and their net result is presented as financial income in one line.
| Performance indicators - joint ventures consolidated 50% (EUR thousand) | Q3 2015 | Q3 2014 | Change % | Q3 2013 | Q3 2012 | Q3 2011 |
| For the period | ||||||
| Sales | 14 169 | 13 833 | 2% | 12 977 | 13 278 | 12 969 |
| EBITDA | 2 143 | 1 732 | 24% | 1 359 | 1 495 | 1 568 |
| EBITDA margin (%) | 15.1% | 12.5% | 10.5% | 11.3% | 12.1% | |
| Operating profit | 1 423 | 872 | 63% | 718 | 676 | 715 |
| Operating margin (%) | 10.0% | 6.3% | 5.5% | 5.1% | 5.5% | |
| Interest expenses | (157) | (189) | 17% | (204) | (301) | (554) |
| Net profit /(loss) for the period* | 1 210 | 644 | 88% | 455 | 263 | 119 |
| Net margin* (%) | 8.5% | 4.7% | 3.5% | 2.0% | 0.9% | |
|
Net profit for the period in financial statements (incl. impairments and gain on change of ownership interest) |
1 210 | 1 599 | -24% | 455 | 263 | 119 |
| Net margin (%) | 8.5% | 11.6% | 3.5% | 2.0% | 0.9% | |
| Return on assets ROA (%) | 1.6% | 2.0% | 0.6% | 0.3% | 0.1% | |
| Return on equity ROE (%) | 2.5% | 3.5% | 1.1% | 0.7% | 0.3% | |
| Earnings per share (EPS) | 0.04 | 0.05 | 0.02 | 0.01 | 0.00 |
| Performance indicators - joint ventures consolidated 50% (EUR thousand) | 9 months 2015 | 9 months 2014 | Change % | 9 months 2013 | 9 months 2012 | 9 months 2011 |
| For the period | ||||||
| Sales | 44 346 | 44 606 | -1% | 41 901 | 43 260 | 41 078 |
| EBITDA | 5 148 | 6 124 | -16% | 5 246 | 5 634 | 4 988 |
| EBITDA margin (%) | 11.6% | 13.7% | 12.5% | 13.0% | 12.1% | |
| Operating profit* | 2 930 | 3 743 | -22% | 3 299 | 3 102 | 2 407 |
| Operating margin* (%) | 6.6% | 8.4% | 7.9% | 7.2% | 5.9% | |
| Interest expenses | (477) | (546) | 13% | (578) | (1 343) | (1 689) |
| Net profit /(loss) for the period* | 2 247 | 3 005 | -25% | 2 490 | 1 414 | 360 |
| Net margin* (%) | 5.1% | 6.7% | 5.9% | 3.3% | 0.9% | |
|
Net profit for the period in financial statements (incl. impairments and gain on change of ownership interest) |
2 247 | 3 960 | -43% | 2 490 | 1 414 | 1 900 |
| Net margin (%) | 5.1% | 8.9% | 5.9% | 3.3% | 4.6% | |
| Return on assets ROA (%) | 2.9% | 5.1% | 3.2% | 1.8% | 2.2% | |
| Return on equity ROE (%) | 4.7% | 9.0% | 5.9% | 3.6% | 5.0% | |
| Earnings per share (EPS) | 0.08 | 0.13 | 0.08 | 0.05 | 0.06 |
* The results exclude impairments and the net extraordinary gain in relation to the acquisition of an additional 50% ownership interest in Eesti Päevalehe AS in the 1st quarter 2011. The transaction was accounted for in two parts: firstly, as the sale of the current 50% ownership interest on which the net extraordinary gain totalled EUR 1 540 thousand and secondly, as the acquisition of the wholly-owned subsidiary. They also exclude a gain in the amount of EUR 1.0 million from the acquisition of the shares of AS Ajakirjade Kirjastus and AS SL Õhtuleht from AS Eesti Meedia, their sale to OÜ Suits Meedia and further restructuring in 2014 where essentially joint ventures with AS Eesti Meedia were liquidated and new joint ventures with OÜ Suits Meedia were set up.
|
Balance sheet– joint ventures consolidated 50% (EUR thousand) |
30.09.2015 | 31.12.2014 | Change % |
| As of the end of the period | |||
| Current assets | 13 813 | 15 189 | -9% |
| Non-current assets | 63 273 | 65 665 | -4% |
| Total assets | 77 086 | 80 854 | -5% |
| incl. cash and bank | 3 876 | 6 788 | -43% |
| incl. goodwill | 39 432 | 39 432 | 0% |
| Current liabilities | 11 532 | 14 110 | -18% |
| Non-current liabilities | 17 323 | 19 569 | -11% |
| Total liabilities | 28 855 | 33 679 | -14% |
| incl. borrowings | 19 420 | 24 592 | -21% |
| Equity | 48 231 | 47 175 | 2% |
| Financial ratios (%) – joint ventures consolidated 50% | 30.09.2015 | 31.12.2014 |
| Equity ratio (%) | 63% | 58% |
| Debt to equity ratio (%) | 40% | 52% |
| Debt to capital ratio (%) | 24% | 27% |
| Total debt /EBITDA ratio | 2.46 | 2.61 |
| Debt service coverage ratio | 1.61 | 1.90 |
| Liquidity ratio | 1.20 | 1.08 |
FINANCIAL INDICATORS AND RATIOS – joint ventures recognised under the equity method
| Performance indicators – joint ventures under the equity method (EUR thousand) | Q3 2015 | Q3 2014 | Change % | Q3 2013 | Q3 2012 | Q3 2011 |
| For the period | ||||||
| Sales (only subsidiaries) | 12 105 | 11 841 | 2% | 10 985 | 11 377 | 11 046 |
| EBITDA (only subsidiaries) | 1 889 | 1 487 | 27% | 1 164 | 1 435 | 1 476 |
| EBITDA margin (%) | 15.6% | 12.6% | 10.6% | 12.6% | 13.4% | |
| Operating profit* (only subsidiaries) | 1 230 | 783 | 57% | 544 | 643 | 661 |
| Operating margin* (%) | 10.2% | 6.6% | 5.0% | 5.7% | 6.0% | |
| Interest expenses (only subsidiaries) | (140) | (175) | 20% | (204) | (301) | (555) |
| Profit of joint ventures by equity method | 170 | 87 | 96% | 174 | 33 | 53 |
| Net profit for the period* | 1 210 | 658 | 84% | 455 | 263 | 119 |
| Net margin* (%) | 10.0% | 5.6% | 4.1% | 2.3% | 1.1% | |
| Net profit for the period in financial statements (incl. impairments and gain on change of ownership interest) | 1 210 | 1 613 | -25% | 455 | 263 | 119 |
| Net margin (%) | 10.0% | 13.6% | 4.1% | 2.3% | 1.1% | |
| Return on assets ROA (%) | 1.6% | 2.2% | 0.6% | 0.3% | 0.1% | |
| Return on equity ROE (%) | 2.5% | 3.5% | 1.1% | 0.7% | 0.3% | |
| Earnings per share (EPS) | 0.04 | 0.05 | 0.02 | 0.01 | 0.00 |
| Performance indicators – joint ventures under the equity method (EUR thousand) | 9 months 2015 | 9 months 2014 | Change % | 9 months 2013 | 9 months 2012 | 9 months 2011 |
| For the period | ||||||
| Sales (only subsidiaries) | 37 962 | 38 338 | -1% | 35 796 | 37 125 | 35 032 |
| EBITDA (only subsidiaries) | 4 240 | 5 481 | -23% | 4 777 | 5 328 | 4 577 |
| EBITDA margin (%) | 11.2% | 14.3% | 13.3% | 14.4% | 13.1% | |
| Operating profit* (only subsidiaries) | 2 202 | 3 313 | -34% | 2 897 | 2 879 | 2 108 |
| Operating margin* (%) | 5.8% | 8.6% | 8.1% | 7.8% | 6.0% | |
| Interest expenses (only subsidiaries) | (425) | (531) | 20% | (578) | (1 344) | (1 695) |
| Profit of joint ventures by equity method | 589 | 375 | 57% | 320 | 137 | 212 |
| Net profit for the period* | 2 247 | 3 019 | -26% | 2 490 | 1 414 | 360 |
| Net margin* (%) | 5.9% | 7.9% | 7.0% | 3.8% | 1.0% | |
|
Net profit for the period in financial statements (incl. impairments and gain on change of ownership interest) |
2 247 | 3 974 | -43% | 2 490 | 1 414 | 1 900 |
| Net margin (%) | 5.9% | 10.4% | 7.0% | 3.8% | 5.4% | |
| Return on assets ROA (%) | 3.0% | 5.3% | 3.3% | 1.8% | 2.3% | |
| Return on equity ROE (%) | 4.7% | 9.0% | 5.9% | 3.6% | 5.0% | |
| Earnings per share (EPS) | 0.08 | 0.13 | 0.08 | 0.05 | 0.06 |
* The results exclude impairments and the net extraordinary gain in relation to the acquisition of an additional 50% ownership interest in Eesti Päevalehe AS in the 1st quarter 2011. The transaction was accounted for in two parts: firstly, as the sale of the current 50% ownership interest on which the net extraordinary gain totalled EUR 1 540 thousand and secondly, as the acquisition of the wholly-owned subsidiary. They also exclude a gain in the amount of EUR 1.0 million from the acquisition of the shares of AS Ajakirjade Kirjastus and AS SL Õhtuleht from AS Eesti Meedia, their sale to OÜ Suits Meedia and further restructuring in 2014 where essentially joint ventures with AS Eesti Meedia were liquidated and new joint ventures with OÜ Suits Meedia were set up.
| Balance sheet– joint ventures under equity method (EUR thousand) | 30.09.2015 | 31.12.2014 | Change % |
| As of the end of the period | |||
| Current assets | 11 288 | 12 303 | -8% |
| Non-current assets | 62 256 | 64 292 | -3% |
| Total assets | 73 544 | 76 595 | -4% |
| incl. cash and bank | 2 640 | 5 275 | -50% |
| incl. goodwill | 38 153 | 38 153 | 0% |
| Current liabilities | 9 319 | 11 481 | -19% |
| Non-current liabilities | 15 994 | 17 939 | -11% |
| Total liabilities | 25 313 | 29 420 | -14% |
| incl. borrowings | 18 245 | 23 152 | -21% |
| Equity | 48 231 | 47 175 | 2% |
| Financial ratios (%) – joint ventures by equity method | 30.09.2015 | 31.12.2014 |
| Equity ratio (%) | 66% | 62% |
| Debt to equity ratio (%) | 38% | 49% |
| Debt to capital ratio (%) | 24% | 27% |
| Total debt /EBITDA ratio | 2.74 | 2.93 |
| Debt service coverage ratio | 1.51 | 1.77 |
| Liquidity ratio | 1.21 | 1.07 |
Cyclicality
All operating areas of the Group are characterised by cyclicality and fluctuation, related to the changes in the overall economic conditions and consumer confidence. The Group’s revenue can be adversely affected by an economic slowdown or recession in home and export markets. It can appear in lower advertising costs in retail, preference of other advertising channels (e.g. preference of internet rather than print media) and changes in consumption habits of retail consumers (following current news in news portals versus reading printed newspapers, preference of the younger generation to use mobile devices and other communication channels, etc.).
Seasonality
The revenue from the Group’s advertising sales as well as in the printing services segment is impacted by major seasonal fluctuations. The level of both types of revenue is the highest in the 2nd and 4th quarter of each year and the lowest in the 3rd quarter. Revenue is higher in the 4th quarter because of higher consumer spending during the Christmas season, accompanied by the increase in advertising expenditure. Advertising expenditure is usually the lowest during the summer months, as well as during the first months of the year following Christmas and New Year’s celebrations. Book sales are the strongest in the last quarter of the year. Subscriptions and retail sales of periodicals do not fluctuate as much as advertising revenue. However the summer period is always more quiet and at the beginning of the school year in September there is an increase in subscriptions and retail sale which usually continues until next summer holiday period.
| Formulas used to calculate financial ratios | |
| EBITDA margin (%) | EBITDA/sales x 100 |
| Operating margin* (%) | Operating profit*/sales x100 |
| Net margin* (%) | Net profit*/sales x100 |
| Net margin (%) | Net profit in financial statements/sales x100 |
| Earnings per share | Net profit / average number of share |
| Equity ratio (%) | Equity / (liabilities + equity) x100 |
| Debt to equity ratio (%) | Interest bearing liabilities /equity x 100 |
| Debt to capital ratio (%) | Interest bearing liabilities – cash. and cash equivalents (net debt)/(net debt +equity) x 100 |
| Total debt/EBITDA ratio | Interest bearing borrowings /EBITDA |
| Debt service coverage ratio | EBITDA/loan and interest payments for the period |
| Liquidity ratio | Current assets / current liabilities |
| Return on assets ROA (%) | Net profit /average assets x 100 |
| Return on equity ROE (%) | Net profit /average equity x 100 |
SEGMENT OVERVIEW
From the 3rd quarter of 2014, when the Group’s Lithuanian subsidiaries were merged, the Group’s activities are divided into the media segment, printing services segment and entertainment segment launched this year. Previously, the entities of the media segment were divided into online media and periodicals segments.
The segments’ EBITDA does not include intragroup management fees, and impairment of goodwill and trademarks. Volume-based and other fees payable to advertising agencies have not been deducted from the advertising sales of segments, because the management monitors gross advertising sales. Discounts and rebates are reduced from the Group’s sales and are included in the combined line of eliminations.
Key financial data of the segments Q3 2011-2015
| (EUR thousand) | Sales | Sales | ||||
| Q3 2015 | Q3 2014 | Change % | Q3 2013 | Q3 2012 | Q3 2011 | |
| media segment (by equity method) | 7 098 | 6 017 | 18% | 5 551 | 5 841 | 5 501 |
| incl. revenue from all digital and online channels | 3 549 | 2 918 | 22% | 2 479 | 2 315 | 2 045 |
| printing services segment | 5 753 | 6 596 | -13% | 6 147 | 6 263 | 6 126 |
| entertainment segment | 64 | 0 | - | 0 | 0 | 0 |
| corporate functions | 434 | 427 | 2% | 396 | 268 | 64 |
| intersegment eliminations | (1 245) | (1 200) | -4% | (1 109) | (995) | (643) |
| TOTAL GROUP by equity method | 12 105 | 11 841 | 2% | 10 985 | 11 377 | 11 046 |
| media segment by proportional consolidation | 9 432 | 8 202 | 15% | 7 724 | 7 929 | 7 577 |
| incl. revenue from all digital and online channels | 3 809 | 3 101 | 23% | 2 621 | 2 435 | 2 164 |
| printing services segment | 5 753 | 6 596 | -13% | 6 147 | 6 263 | 6 126 |
| entertainment segment | 64 | 0 | - | 0 | 0 | 0 |
| corporate functions | 434 | 427 | 2% | 396 | 268 | 64 |
| intersegment eliminations | (1 514) | (1 392) | (1 290) | (1 182) | (798) | |
| TOTAL GROUP by proportional consolidation | 14 169 | 13 833 | 2% | 12 977 | 13 278 | 12 969 |
| (EUR thousand) | EBITDA | EBITDA | ||||
| Q3 2015 | Q3 2014 | Change % | Q3 2013 | Q3 2012 | Q3 2011 | |
| media segment by equity method | 889 | 323 | 175% | 102 | 330 | 334 |
| media segment by proportional consolidation | 1 143 | 567 | 101% | 297 | 390 | 426 |
| printing services segment | 1 178 | 1 326 | -11% | 1 245 | 1 310 | 1 417 |
| entertainment segment | (1) | 0 | - | 0 | 0 | 0 |
| corporate functions | (178) | (162) | -10% | (183) | (206) | (278) |
| intersegment eliminations | (0) | (0) | -520% | 0 | 1 | 3 |
| TOTAL GROUP by equity method | 1 889 | 1 487 | 27% | 1 164 | 1 435 | 1 476 |
| TOTAL GROUP by proportional consolidation | 2 143 | 1 732 | 24% | 1 359 | 1 495 | 1 568 |
| EBITDA margin | Q3 2015 | Q3 2014 | Q3 2013 | Q3 2012 | Q3 2011 |
| media segment by equity method | 13% | 5% | 2% | 6% | 6% |
| media segment by proportional consolidation | 12% | 7% | 4% | 5% | 6% |
| printing services segment | 20% | 20% | 20% | 21% | 23% |
| TOTAL GROUP by equity method | 16% | 13% | 11% | 13% | 13% |
| TOTAL GROUP by proportional consolidation | 15% | 13% | 10% | 11% | 12% |
Key financial data of the segments 9 months 2011-2015
| (EUR thousand) | Sales | Sales | ||||
| 9 months 2015 | 9 months 2014 | Change % | 9 months 2013 | 9 months 2012 | 9 months 2011 | |
| media segment (by equity method) | 21 663 | 19 923 | 9% | 18 225 | 18 513 | 17 240 |
| incl. revenue from all digital and online channels | 10 986 | 9 434 | 16% | 8 206 | 7 532 | 6 495 |
| printing services segment | 18 457 | 20 868 | -12% | 19 896 | 21 121 | 19 593 |
| entertainment segment | 517 | 0 | - | 0 | 0 | 0 |
| corporate functions | 1 394 | 1 271 | 10% | 1 137 | 688 | 138 |
| intersegment eliminations | (4 068) | (3 725) | -9% | (3 462) | (3 197) | (1 939) |
| TOTAL GROUP by equity method | 37 962 | 38 338 | -1% | 35 796 | 37 125 | 35 032 |
| media segment by proportional consolidation | 28 899 | 26 788 | 8% | 24 912 | 25 241 | 23 741 |
| incl. revenue from all digital and online channels | 11 745 | 10 050 | 17% | 8 643 | 7 963 | 6 900 |
| printing services segment | 18 457 | 20 868 | -12% | 19 896 | 21 121 | 19 593 |
| entertainment segment | 517 | 0 | - | 0 | 0 | 0 |
| corporate functions | 1 394 | 1 271 | 10% | 1 137 | 688 | 138 |
| intersegment eliminations | (4 921) | (4 321) | (4 044) | (3 790) | (2 394) | |
| TOTAL GROUP by proportional consolidation | 44 346 | 44 606 | -1% | 41 901 | 43 260 | 41 078 |
| (EUR thousand) | EBITDA | EBITDA | ||||
| 9 months 2015 | 9 months 2014 | Change % | 9 months 2013 | 9 months 2012 | 9 months 2011 | |
| media segment by equity method | 2 425 | 1 922 | 26% | 1 109 | 1 478 | 814 |
| media segment by proportional consolidation | 3 334 | 2 565 | 30% | 1 579 | 1 785 | 1 225 |
| printing services segment | 3 611 | 4 321 | -16% | 4 258 | 4 402 | 4 464 |
| entertainment segment | (1 106) | 0 | - | 0 | 0 | 0 |
| corporate functions | (689) | (763) | 10% | (593) | (555) | (712) |
| intersegment eliminations | 0 | 0 | -69% | 2 | 2 | 11 |
| TOTAL GROUP by equity method | 4 240 | 5 481 | -23% | 4 777 | 5 328 | 4 577 |
| TOTAL GROUP by proportional consolidation | 5 148 | 6 124 | -16% | 5 246 | 5 634 | 4 988 |
| EBITDA margin | 9 months 2015 | 9 months 2014 | 9 months 2013 | 9 months 2012 | 9 months 2011 |
| media segment by equity method | 11% | 10% | 6% | 8% | 5% |
| media segment by proportional consolidation | 12% | 10% | 6% | 7% | 5% |
| printing services segment | 20% | 21% | 21% | 21% | 23% |
| TOTAL GROUP by equity method | 11% | 14% | 13% | 14% | 13% |
| TOTAL GROUP by proportional consolidation | 12% | 14% | 13% | 13% | 12% |
MEDIA SEGMENT
The media segment includes Delfi operations in Estonia, Latvia and Lithuania, publisher of Maaleht, Eesti Ekspress and Eesti Päevaleht, book publisher in Estonia, magazine publisher in Lithuania, activities of the retail offer portal Zave, and holding company Delfi Holding. This segment also includes 50% joint ventures AS SL Õhtuleht (publisher of Õhtuleht and Linnaleht), magazine publisher AS Ajakirjade Kirjastus and AS Express Post engaged in home deliveries.
The companies’ EBITDA is currently presented before the trademark royalty fees that were paid to the direct parent company Delfi Holding until April 2015. In May 2015, Delfi group was restructured, as a consequence of which Delfi’s local companies are directly owned by AS Ekspress Grupp. The ownership was changed in Lithuania in October 2015. The new structure reflects the actual management structure in a better way as it has changed over the years because of financial considerations.
News portals owned by the Group
| Owner | Portal | Owner | Portal |
| Ekspress Meedia | www.delfi.ee | Ekspress Meedia | www.ekspress.ee |
| rus.delfi.ee | www.maaleht.ee | ||
| Delfi Latvia | www.delfi.lv | www.epl.ee | |
| rus.delfi.lv | |||
| Delfi Lithuania | www.delfi.lt | AS SL Õhtuleht | www.ohtuleht.ee |
| ru.delfi.lt |
www.vecherka.ee |
Classified portals owned by the Group
| Owner | Portal | Owner | Portal |
| Delfi Lithuania | www.alio.lt | AS Eesti Ajalehed | www.ej.ee |
| www.ekspressauto.ee |
| (EUR thousand) | Sales | ||
| Q3 2015 | Q3 2014 | Change % | |
| Ekspress Meedia AS (Delfi Eesti + Eesti Ajalehed) | 4 373 | 3 576 | 22% |
| Delfi Latvia | 678 | 635 | 7% |
| Delfi Lithuania (incl. Ekspress Leidyba) | 1 941 | 1 768 | 10% |
| incl. Delfi Lithuania online revenue | 1 377 | 1 135 | 21% |
| OÜ Hea Lugu | 106 | 99 | 7% |
| OÜ Zave Media | 3 | 0 | - |
| Other companies (Delfi Holding) | - | - | - |
| Intersegment eliminations | (2) | (61) | 96% |
| TOTAL subsidiaries | 7 098 | 6 017 | 18% |
| AS SL Õhtuleht* | 1 001 | 923 | 8% |
| AS Ajakirjade Kirjastus* | 1 024 | 939 | 9% |
| AS Express Post* | 564 | 569 | -1% |
| Intersegment eliminations | (256) | (246) | -4% |
| TOTAL joint ventures | 2 333 | 2 185 | 7% |
| TOTAL segment by proportional consolidation | 9 432 | 8 202 | 15% |
| (EUR thousand) | EBITDA | ||
| Q3 2015 | Q3 2014 | Change % | |
| Ekspress Meedia AS (Delfi Eesti + Eesti Ajalehed) | 613 | 113 | 442% |
| Delfi Latvia | 33 | 43 | -23% |
| Delfi Lithuania (incl. Ekspress Leidyba) | 311 | 175 | 78% |
| incl. Delfi Lithuania online revenue | |||
| OÜ Hea Lugu | (5) | (5) | 0% |
| OÜ Zave Media | (60) | 0 | - |
| Other companies (Delfi Holding) | (2) | (3) | 33% |
| Intersegment eliminations | (1) | 0 | - |
| TOTAL subsidiaries | 889 | 323 | 175% |
| AS SL Õhtuleht* | 111 | 115 | -4% |
| AS Ajakirjade Kirjastus* | 107 | 55 | 93% |
| AS Express Post* | 36 | 75 | -51% |
| Intersegment eliminations | (0) | (1) | 100% |
| TOTAL joint ventures | 254 | 244 | 4% |
| TOTAL segment by proportional consolidation | 1 143 | 567 | 101% |
*Proportional share of joint ventures
| (EUR thousand) | Sales | ||
| 9 months 2015 | 9 months 2014 | Change % | |
| Ekspress Meedia AS (Delfi Eesti + Eesti Ajalehed) | 13 491 | 11 985 | 13% |
| Delfi Latvia | 2 139 | 1 776 | 20% |
| Delfi Lithuania (incl. Ekspress Leidyba) | 5 816 | 5 797 | 0% |
| incl. Delfi Lithuania online revenue | 4 164 | 3 878 | 7% |
| Delfi Ukraine | 0 | 2 | -100% |
| OÜ Hea Lugu | 347 | 590 | -41% |
| OÜ Zave Media | 3 | 0 | - |
| Other companies (Delfi Holding) | - | - | - |
| Intersegment eliminations | (133) | (227) | 41% |
| TOTAL subsidiaries | 21 663 | 19 923 | 9% |
| AS SL Õhtuleht* | 3 089 | 2 887 | 7% |
| AS Ajakirjade Kirjastus* | 3 130 | 3 019 | 4% |
| AS Express Post* | 1 828 | 1 761 | 4% |
| Intersegment eliminations | (810) | (801) | -1% |
| TOTAL joint ventures | 7 237 | 6 865 | 5% |
| TOTAL segment by proportional consolidation | 28 899 | 26 788 | 8% |
| (EUR thousand) | EBITDA | ||
| 9 months 2015 | 9 months 2014 | Change % | |
| Ekspress Meedia AS (Delfi Eesti + Eesti Ajalehed) | 1 474 | 872 | 69% |
| Delfi Latvia | 144 | 61 | 136% |
| Delfi Lithuania (incl. Ekspress Leidyba) | 867 | 973 | -11% |
| incl. Delfi Lithuania online revenue | |||
| Delfi Ukraine | 0 | (51) | 100% |
| OÜ Hea Lugu | 6 | 71 | -92% |
| OÜ Zave Media | (60) | 0 | - |
| Other companies (Delfi Holding) | (5) | (7) | 29% |
| Intersegment eliminations | (1) | 3 | - |
| TOTAL subsidiaries | 2 425 | 1 922 | 26% |
| AS SL Õhtuleht* | 396 | 229 | 73% |
| AS Ajakirjade Kirjastus* | 306 | 153 | 100% |
| AS Express Post* | 206 | 258 | -20% |
| Intersegment eliminations | (0) | 2 | -100% |
| TOTAL joint ventures | 908 | 643 | 41% |
| TOTAL segment by proportional consolidation | 3 334 | 2 565 | 30% |
*Proportional share of joint ventures
Delfi Estonia
· New topical portals www.maitsed.ee and Russian-language travel portal www.turist.ee were launched.
· A new Delfi mobile application for IOS devices was finished for beta testing.
· A new mobile comments' section in m.delfi.
· New layout for Eesti Ekspress website and digital newspaper.
· A new article view in almost all channels.
· Deployment of HTML5 animated technology for displaying advertising banners.
· Special projects and categories for covering the Opinion Festival, Weekend Festival, European Basketball Championships, Eurobasket, European Volleyball Championships and Rally Estonia.
Estonian online readership 2014-2015
In the third quarter 2015, Delfi remains the largest online portal in Estonia. There have been no significant changes in the competition of online websites. The number of mobile users of Delfi continues to increase. This in turn is boosting the total number of online users and is creating a situation where the share of content consumed by mobile devices grows. Readership has recovered from the summer downturn and the third quarter included a week with the largest readership of all times.
Delfi Latvia
· Several new topical portals were launched: Russian-language hobby vertical www.zhurnal.lv, gardening portal www.mansdarzs.lv, home design portal www.manamaja.lv. In total, Delfi Latvia now operates sixteen different topical portals.
· A new e-commerce platform offering booking opportunities of beauty services www.tobook.lv was launched.
· The focus remains on longer production of original content and further development of Delfi TV video platform.
· In the 3rd quarter, several improvements were made in technology. One important step was deployment of HTML5 animated technology for displaying advertising banners.
· A new self-service system for e-commerce customers was launched that enables to reach direct customers faster and better.
· Media partner of several concert tours, teams and events.
· In September, advertising agency DDB named Delfi as “The most influential Latvian media brand in social networks”.
Latvian online readership 2014-2015
In the third quarter 2015, the readership of the three largest portals has been relatively stable, without significant changes. Inbox.lv remains the largest online portal in Latvia and Delfi.lv is the largest news portal in Latvia. One change on the media market was the transaction where UP Invest OÜ acquired Latvia’s largest news agency LETA.
Starting from January 2015, the method of the Gemius online survey has changed. The readership in 2015 includes statistics of users in the age group 7-74 years of age. In previous periods, statistics was published on the age group 15-74 years of age.
Delfi Lithuania
· In connection with the European Basketball Championship, a new portal for basketball fans www.krepsinis.lt was launched with the objective of becoming Lithuania’s largest top-quality basketball portal.
· A new more modern and user-friendly mobile application for IOS users was launched. The Android version is expected to be launched in December.
· The editorial department launched a new exclusive media project “the most influentials of Lithuania“.
Lithuanian online readership 2014-2015
Delfi.lt remains Lithuania’s largest online portal. In the 3rd quarter 2015, there were no major changes in preferences of online users in Lithuania. However, competition on the market is increasing because MTG has acquired products of Tipro group that had several online portals and merged it with tv3.lt. Tv3.lt together with alfa.lt were the only ones, whose number of readers increased in September. Among other portals there is no major changes in readership numbers.
Print media in Estonia
Estonian newspaper circulation 2014-2015
Circulations of Estonian newspapers are falling moderately in the long run. The circulation of daily newspapers is falling faster than that of weekly newspapers. In 3rd quarter 2015 there have been new significant developments on the market – circulations of Õhtuleht and Postimees are now on the same level. Maaleht has continued to increase its circulation in a stable manner. One also needs to add to these figures the number of subscribers of digital newspapers which totalled more than 13 thousand for both Eesti Ekspress and Eesti Päevaleht, as of the end of the 3rd quarter 2015.
Estonian newspaper readership 2014-2015
As with regard to the circulations of newspapers, also the readership of publications has remained relatively stable, but in the long run is decreasing ca 3-5% a year. Since this survey does not cover the readership of digital newspapers, it does not represent the actual readership. The number of digital subscribers of periodicals of the Ekspress Group is approximately 13 thousand for Eesti Päevaleht and Eesti Ekspress and over 9 thousand for Maaleht. Therefore, the main task of the periodicals of the group in the next few years is to increase the readership of digital newspapers. There have been no significant changes in the competition situation in readership in the 3rd quarter 2015.
PRINTING SERVICES SEGMENT
All printing services of the Group 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 | ||
| Q3 2015 | Q3 2014 | Change % | |
| AS Printall | 5 753 | 6 596 | -13% |
| (EUR thousand) | EBITDA | ||
| Q3 2015 | Q3 2014 | Change % | |
| AS Printall | 1 178 | 1 326 | -11% |
| (EUR thousand) | Sales | ||
| 9 months 2015 | 9 months 2014 | Change % | |
| AS Printall | 18 457 | 20 868 | -12% |
| (EUR thousand) | EBITDA | ||
| 9 months 2015 | 9 months 2014 | Change % | |
| AS Printall | 3 611 | 4 321 | -16% |
Sanctions against Russia and the related decrease in orders and price pressure in Scandinavia continued also in the 3rd quarter, resulting in the decrease of sales revenue and EBITDA as in the first half of the year. Due to changes in the political landscape there have been changes in the structure of export markets where the share of Russia continues to decrease. The increase of the share of Estonia is primarily attributable to the new sheet-fed machine installed at the beginning of 2015, used for printing magazine covers, small-circulation magazines and advertising products.
Printing services and the environment
In addition to its very strong financial position, Printall also focuses on environmentally conscious production. Printall has been granted ISO 9001 management and ISO 14001 environmental certificates.
The Minister of the Environment of the Republic of Estonia and the waste managing company AS Ragn-Sells awarded Printall with the title of the Top Recycler of the Year, because the company recycles 95% of its waste.
The Nordic Council of Ministers has awarded Printall with the environmental label “The Nordic Ecolabel”, used to acknowledge the companies in the Nordic countries that use environmentally efficient production. Printall also has FSC and PEFC Chain of Custody (COC) certificates, which the company uses to promote a green way of thinking in the printing industry. Both of those certificates indicate compliance with monitoring and product production process requirements which are issued to businesses that comply with the requirements established by the FSC (Forest Stewardship Council) and the PEFC (Programme for the Endorsement of Forest Certification). A business that is issued these certificates helps to support the environmentally friendly, socially fair and economically viable management of the world’s forests.
Printall cares about the environment and uses green energy. The POWERED BY GREEN certificate is a proof that the company buys electricity, 70% of which has been generated by renewable sources of energy.
Consolidated balance sheet (unaudited)
| (EUR thousand) | 30.09.2015 | 31.12.2014 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 2 633 | 3 656 |
| Term deposit | 7 | 19 |
| Trade and other receivables | 6 439 | 6 519 |
| Corporate income tax prepayment | 112 | 37 |
| Inventories | 2 097 | 2 072 |
| Total current assets | 11 288 | 12 303 |
| Non-current assets | ||
| Term deposit | 0 | 1 600 |
| Trade and other receivables | 1 152 | 1 170 |
| Deferred tax asset | 65 | 65 |
| Investments in joint ventures | 811 | 500 |
| Investments in associates | 191 | 164 |
| Property, plant and equipment | 14 154 | 14 506 |
| Intangible assets | 45 883 | 46 287 |
| Total non-current assets | 62 256 | 64 292 |
| TOTAL ASSETS | 73 544 | 76 595 |
| LIABILITIES | ||
| Current liabilities | ||
| Borrowings | 2 251 | 5 213 |
| Trade and other payables | 6 959 | 6 249 |
| Corporate income tax payable | 109 | 19 |
| Total current liabilities | 9 319 | 11 481 |
| Non-current liabilities | ||
| Long-term borrowings | 15 994 | 17 939 |
| Total non-current liabilities | 15 994 | 17 939 |
| TOTAL LIABILITIES | 25 313 | 29 420 |
| EQUITY | ||
| Share capital | 17 878 | 17 878 |
| Share premium | 14 277 | 14 277 |
| Treasury shares | (166) | (64) |
| Reserves | 1 794 | 1 440 |
| Retained earnings | 14 448 | 13 644 |
| TOTAL EQUITY | 48 231 | 47 175 |
| TOTAL LIABILITIES AND EQUITY | 73 544 | 76 595 |
Consolidated statement of comprehensive income (unaudited)
| (EUR thousand) | Q3 2015 | Q3 2014 | 9 months 2015 | 9 months 2014 |
| Sales revenue | 12 105 | 11 841 | 37 962 | 38 338 |
| Cost of sales | (9 315) | (9 545) | (30 660) | (29 906) |
| Gross profit | 2 790 | 2 296 | 7 302 | 8 432 |
| Other income | 132 | 116 | 378 | 338 |
| Marketing expenses | (502) | (446) | (1 634) | (1 411) |
| Administrative expenses | (1 161) | (1 164) | (3 764) | (3 943) |
| Other expenses | (29) | (19) | (80) | (103) |
| Gain from change in joint ventures | 0 | 955 | 0 | 955 |
| Operating profit | 1 230 | 1 738 | 2 202 | 4 268 |
| Interest income | 11 | 2 | 32 | 5 |
| Interest expense | (140) | (175) | (425) | (531) |
| Foreign exchange gains/(losses) | (1) | 0 | (4) | 35 |
| Other finance costs | (26) | (15) | (57) | (48) |
| Total finance income/costs | (156) | (188) | (454) | (539) |
| Profit on shares of joint ventures | 170 | 87 | 589 | 375 |
| Profit (loss) on shares of associates | 5 | (7) | 14 | (16) |
| Profit before income tax | 1 249 | 1 630 | 2 351 | 4 088 |
| Income tax expense | (39) | (17) | (104) | (114) |
| Net profit for the reporting period | 1 210 | 1 613 | 2 247 | 3 974 |
| Net profit for the reporting period attributable to: | ||||
| Equity holders of the parent company | 1 210 | 1 613 | 2 247 | 3 974 |
| Other comprehensive income (expense) that may be subsequently reclassified to profit or loss | ||||
| Currency translation differences | 0 | 0 | 0 | (34) |
| Total other comprehensive income (expense) | 0 | 0 | 0 | (34) |
| Comprehensive income (expense) for the reporting period | 1 210 | 1 613 | 2 247 | 3 940 |
| Attributable to equity holders of the parent company | 1 210 | 1 613 | 2 247 | 3 940 |
| Basic and diluted earnings per share | 0.04 | 0.05 | 0.08 | 0.13 |
Consolidated cash flow statement (unaudited)
| (EUR thousand) | 9 months 2015 | 9 months 2014 |
| Cash flows from operating activities | ||
| Operating profit for the reporting year | 2 202 | 4 268 |
| Adjustments for: | ||
| Depreciation, amortisation and impairment | 2 038 | 2 168 |
| Gain from change in holdings in joint ventures | 0 | (955) |
| (Gain)/loss on sale and write-down of property, plant and equipment | (3) | (8) |
| Change in value of share option | 98 | 102 |
| Cash flows from operating activities: | ||
| Trade and other receivables | (7) | 603 |
| Inventories | (25) | 201 |
| Trade and other payables | (434) | (2 600) |
| Cash generated from operations | 3 869 | 3 779 |
| Income tax paid | (110) | (150) |
| Interest paid | (425) | (531) |
| Net cash generated from operating activities | 3 334 | 3 098 |
| Cash flows from investing activities | ||
| Term deposit (placement)/release | 1 600 | (1 600) |
| Purchase of other investments | (50) | 0 |
| Proceeds from restructuring of holdings in joint ventures | 0 | 820 |
| Investments in joint ventures | 0 | (3) |
| Purchase of associates | 0 | (80) |
| Interest received | 32 | 5 |
| Purchase of property, plant and equipment | (1 429) | (1 107) |
| Proceeds from sale of property, plant and equipment | 147 | 11 |
| Loans granted | 0 | (22) |
| Loan repayments received | 74 | 4 |
| Net cash used in investing activities | 374 | (1 972) |
| Cash flows from financing activities | ||
| Dividends received from joint ventures | 278 | 203 |
| Finance lease repayments | (62) | (56) |
| Change in use of overdraft | (1 117) | 228 |
| Loan received | 687 | 0 |
| Repayments of bank loans | (4 414) | (2 758) |
| Purchase of treasury shares | (103) | (44) |
| Net cash used in financing activities | (4 731) | (2 427) |
| NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (1 023) | (1 301) |
| Cash and cash equivalents at the beginning of the year | 3 656 | 2 111 |
| Cash and cash equivalents at the end of the year | 2 633 | 810 |
Additional information:
Gunnar Kobin
Chairman of the Management Board
GSM: +372 5188111
e-mail: gunnar@egrupp.ee
