AS Ekspress Grupp: Consolidated Interim Report for the First Quarter of 2017 28.04

The year 2017 began with major organisational changes, as managing directors of several Estonian subsidiaries rotated within the Group and started the year in the new position. While the first quarter was clearly a time for settling down, but despite many changes taking place both within and outside the Group, we are reasonably satisfied with the quarter.

Consolidated revenue of the first quarter grew 2% to EUR 14.7 million. At the same time the net profit increased 31% to EUR 410 thousand. Due to the growth in expenditure, EBITDA remained unchanged at EUR 1.2 million. Taking into account the difficult situation in the media market, it is assuring to note that while revenue was 3% below budget, efficient work helped to increase EBITDA by 25% as compared to the budget.

In terms of revenue the growth was particularly significant in online media where revenue was 18% higher than a year earlier, totalling EUR 4.2 million and now accounts for 30% of the Group's total revenues. Especially stand out Delfi Latvia and Delfi Lithuania that increased their online revenue by 16% and 31%, respectively. Also the slightly upward trend of print media revenues is a source of joy. We believe that in spite of the growing role of social media and, maybe just because of it, the need and interest for trustworthy news stories and analysis, whether consumed on paper or digitally, will increase again and the value of objective journalism will grow over time.

The printing services segment has been in recession for several years, accompanied by strong price competition, especially from printing houses in Latvia and Lithuania, that has reduced revenues and profitability. The revenue of Printall fell by 9% as compared to the same period a year earlier and amounted to EUR 5.8 million. EBITDA decreased by 24% and amounted to EUR 0.9 million.

The above figures include all our joint ventures (AS SL Õhtuleht, AS Ajakirjade Kirjastus, AS Express Post and OÜ Linna Ekraanid) consolidated 50% line-by-line.

In the first quarter the revenue of the media segment increased 9%, amounting to EUR 10 million. EBITDA doubled to EUR 0.5 million as compared to the period a year earlier. Both the revenue and EBITDA were above budget. This creates a strong position in competition for advertising revenue and employees. Innovation in developing various products and technical platforms continues to be the priority of the media segment. Most revenue growth comes from new products and technical possibilities. The share of traditional banner advertising in the product portfolio is decreasing. However the growth trend is seen in mobile advertising, video advertising and in sizeable content projects.   

For the third quarter in a row, Delfi Latvia continued to surprise with its excellent financial results. In the first quarter, the revenue of Delfi Latvia increased 16% and amounted to EUR 0.9 million. EBITDA went from negative to positive and totalled almost EUR 100 thousand, despite the fact that the Latvian advertising market had almost no growth and that the staffing of the sales team that started in the autumn was completed only in March. In February, the changed methodology of Gemius and strong advertising in the local mail service provider pushed Delfi again second in terms of number of online users, but Delfi remains the leader on the news market, having increased the gap with the nearest competitor to 8.5%. Delfi was the only one online media, that got two nominations in Excellence Award 2016 by Latvian Journalist Association. The second year in a row Delfi won Excellence Award for multimedia project "Chernobyl 30 years after the tragedy".


In the first quarter the revenue of Ekspress Meedia increased 7% and totalled EUR 4.5 million. EBITDA increased 11% and was in excess of EUR 200 thousand. Online and digital revenues of Delfi grew by the same margin, i.e. 7% and totalled EUR 1.5 million. Another positive result is 8% growth of print advertising and the successful first issue of quarterly magazine Targu Talita, formerly a supplement of Maaleht. The number of digital subscribers is growing modestly, but at a stable pace. Another important achievement was that seven our journalists won in their category in the press awards of the Estonian Newspaper Association.


Of our media enterprises, Delfi Lithuania posted the most remarkable revenue growth, whereas the growth of online revenue was 31%. First-quarter revenue of Delfi Lithuania was EUR 2 million. EBITDA was 150% higher as compared to the same period a year earlier and totalled EUR 50 thousand. Whereas print media continues stable growth in Estonia, the situation in Lithuania is different and magazine circulations and advertising revenue decline.


The revenue and profit growth of Ajakirjade Kirjastus of 9% and 79%, respectively, is mainly attributable to the expansion of the product portfolio last April and, as a result, the merger of two women’s weekly magazines Naisteleht and Naised. In addition to publishing, Ajakirjade Kirjastus organises events of famous brands and courses that strengthens brands, offers added value to subscribers and helps to increase revenues. It was a difficult quarter in the magazine advertising market as well as in retail sale. As mentioned before new CEO started in the first quarter who has strongly started to build new sales team. Thus first quarter can be considered as a settling down period. In the first quarter, the revenue of Ajakirjade Kirjastus totalled EUR 2.3 million and EBIDTA amounted to EUR 166 thousand, 50% of which is included in the consolidated figures of Ekspress Grupp.


In the first quarter, SL Õhtuleht increased its revenue 7% to EUR 2.2 million. EBITDA remained at the level of the first quarter 2016 and totalled EUR 200 thousand. 50% of it is included in the consolidated figures of the Ekspress Group. SL Õhtuleht is one of the few publishers that is swimming against the tide and that increased advertising revenue, number of subscribers and advertising revenue in a year. For the half year there is a new leader in the newspaper market - Õhtuleht has overcome newspaper Postimees and has now the largest circulation in the market. The number of digital subscribers has increased 13% as compared to the end of the last year.

It was another difficult quarter in the printing services segment. The revenue of Printall decreased 9% as compared to the year before and amounted to EUR 5.8 million. EBITDA was 24% lower than a year earlier and totalled EUR 0.9 million. The amount of orders and work volume keeps increasing, but because of price pressure the revenue growth will be below last year’s figure. To find new customers, we are expanding our geographical range and are looking towards farther markets outside Scandinavia.

The financial position of the Group has notably strengthened during the year. Since the end of the year, the ratio of total debt and EBITDA has been below 2.0 which means that according to the syndicate loan contract the interest margin will decrease since April, enabling us to invest more aggressively also with the help of loan capital.


Financially, in the next quarter we expect the media segment revenue and EBITDA to grow 3-4%, supported by acquisitions made in 2016. In the printing services segment we expect to keep the revenue on the level of last year in spite of price pressure, but EBITDA is expected to decrease. We believe that the rapid growth in revenue and profitability of the media segment will keep the Group’s EBITDA at least at the last year’s level and offset the decrease in the printing services segment.

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 an journalistic objectivity.

The Group’s goal is to be a truly innovative 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


In the consolidated financial reports 50% joint ventures are recognised under the equity method, in compliance with international financial reporting standards (IFRS). In its monthly reports, the management monitors the Group’s performance on a basis of proportional consolidation of joint ventures and the syndicated loan contract also determines the calculation of some 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% 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 50%
consolidated (EUR thousand)
Q1 2016Change %Q1
For the period      
Sales14 69714 4022%14 18014 76613 809
EBITDA1 2421 2420%1 5171 4541 503
EBITDA margin (%)8.5%8.6% 10.7%9.8%10.9%
Operating profit4884772%762691840
Operating margin (%)3.3%3.3% 5.4%4.7%6.1%
Interest expenses(116)(135)14%(174)(176)(197)
Net profit/(loss) for the period41031231%556503638
Net margin (%)2.8%2.2% 3.9%3.4%4.6%
Return on assets ROA (%)0.5%0.4% 0.7%0.7%0.8%
Return on equity ROE (%)0.8%0.6% 1.2%1.2%1.5%
Earnings per share (EPS)0.01 0.01




Balance sheet – joint ventures 50% consolidated (thousand EUR)31.03.201731.12.2016Change %
As of the end of the period   
Current assets16 04316 251-1%
Non-current assets61 07661 506-1%
Total assets77 11977 757-1%
       incl. cash and bank2 8924 572-37%
       incl. goodwill38 90438 9040%
Current liabilities11 85612 222-3%
Non-current liabilities13 78014 462-5%
Total liabilities25 63626 684-4%
       incl. borrowing15 95516 603-4%
 Equity51 48351 0731%




    Financial ratios (%) – joint ventures consolidated 50%31.03.201731.12.2016
Equity ratio (%)67%66%
Debt to equity ratio (%)31%33%
Debt to capital ratio (%)20%19%
Total debt/EBITDA ratio1.881.96
Debt service coverage ratio2.752.75
Liquidity ratio1.351.33

 FINANCIAL INDICATORS AND RATIOS – joint ventures recognised under the equity method

Performance indicators – joint ventures under equity method (EUR thousand)Q1
Change %Q1
For the period      
Sales (only subsidiaries)12 40912 2551%12 09312 73411 812
EBITDA (only subsidiaries)1 0751 0255%1 2381 3301 417
EBITDA margin (%)8.7%8.4% 10.2%10.4%12.0%
Operating profit (only subsidiaries)40932426%543593777
Operating margin (%)3.3%2.6% 4.5%4.7%6.6%
Interest expenses (only subsidiaries)(108)(120)10%(155)(176)(197)
Profit of joint ventures by equity method68132-48%1949863
Net profit for the period41031231%556503638
Net margin (%)3.3%2.5% 4.6%3.9%5.4%
Return on assets ROA (%)0.6%0.4% 0.7%0.7%0.8%
Return on equity ROE (%)0.8%0.6% 1.2%1.2%1.5%
Earnings per share (EPS)0.01 0.01




Balance sheet – joint ventures under equity method
(thousand EUR)
31.03.201731.12.2016Change %
As of the end of the period   
Current assets12 95513 094-1%
Non-current assets60 73961 074-1%
Total assets73 69474 168-1%
       incl. cash and bank1 2622 856-56%
       incl. goodwill36 95136 9530%
Current liabilities9 3119 591-3%
Non-current liabilities12 90013 504-4%
Total liabilities22 21123 095-4%
       incl. borrowings15 21415 784-4%
Equity51 48351 0731%




  Financial ratios (%) – joint venture consolidated under equity method31.03.201731.12.2016
Equity ratio (%)70%69%
Debt to equity ratio (%)30%31%
Debt to capital ratio (%)21%20%
Total debt/EBITDA ratio2.082.17
Debt service coverage ratio2.692.67
Liquidity ratio1.391.37



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 like preference of internet rather than print media and changes in consumption habits of retail consumers e.g. following current news in news portals versus reading printed newspapers, preference of the younger generation to use mobile devices and other communication channels, etc.


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 the financial ratios
EBITDAEarnings before interest, tax, depreciation and amortization. EBITDA does not include any impairment losses recognized during the period or result from restructuring.
EBITDA margin (%) EBITDA/sales x 100
Operating margin (%) Operating profit/sales x100
Net margin (%) Net profit/sales x100
Earnings per share Net profit / average number of shares
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 ratioInterest bearing borrowings /EBITDA
Debt service coverage ratioEBITDA/loan and interest payments for the period
Liquidity ratioCurrent assets / current liabilities
Return on assets ROA (%)Net profit /average assets x 100
Return on equity ROE (%)Net profit /average equity x 100


The Group’s activities are divided into two large segments - media segment and printing services segment. Last year, there was also an entertainment segment.

The segments’ EBITDA does not include intragroup management fees, 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 Q1 2013-2017


(thousand EUR)SalesSales
Change %Q1
media segment (by equity method)7 4276 77110%6 5816 4145 923
       incl. revenue from all digital and online channels4 2183 55819%3 3502 7872 470
printing services segment5 7676 341-9%6 3187 0626 617
entertainment segment--6100
corporate functions5755397%471421355
intersegment eliminations(1 360)(1 395)3%(1 338)(1 163)(1 084)
TOTAL GROUP under equity method12 40912 2551%12 09312 73411 812
media segment (by proportional consolidation)10 0269 1979%8 9638 6378 106
       incl. revenue from all digital and online channels4 4023 69919%3 4582 8872 534
printing services segment5 7676 341-9%6 3187 0626 617
entertainment segment--6100
corporate functions5755397%471421355
intersegment eliminations(1 671)(1 675) (1 633)(1 354)(1 269)
TOTAL GROUP by proportional consolidation14 69714 4022%14 18014 76613 809




Change %Q1
media segment by equity method35334933%279338207
media segment by proportional consolidation521251108%558466294
printing services segment8971 182-24%1 1611 4591 414
entertainment segment0(2)89%2400
corporate functions(176)(189)7%(226)(467)(206)
intersegment eliminations00-001
TOTAL GROUP under equity method1 0751 0255%1 2381 3301 417
TOTAL GROUP by proportional consolidation1 2421 2420%1 5171 4541 503




EBITDA marginQ1
media segment by equity method5%1%4%5%3%
media segment by proportional consolidation5%3%6%5%4%
printing services segment16%19%18%21%21%
TOTAL GROUP under equity method9%8%10%10%12%
TOTAL GROUP by proportional consolidation8%9%11%10%11%




The media segment includes Delfi operations in wholly-owned subsidiaries in Estonia, Latvia and Lithuania, publishing of Estonian newspapers Maaleht, Eesti Ekspress and Eesti Päevaleht, book publishing in Estonia, magazine publishing 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, home delivery company AS Express Post and, since the summer 2016, OÜ Linna Ekraanid, engaged in sale of digital outdoor advertising.


News portals owned by the Group


Ekspress Meediawww.delfi.eeEkspress
Delfi Lithuaniawww.delfi.ltSL Õ




(thousand EUR)Sales
Ekspress Meedia4 4954 2127%
        incl. Delfi Estonia online revenue1 5361 4367%
Delfi Latvia85473416%
Delfi Lithuania1 9831 72015%
        incl. Delfi Lithuania online revenue1 6321 24231%
Hea Lugu95104-9%
Zave Media01-100%
Other companies00-
intersegment eliminations00-64%
TOTAL subsidiaries7 4276 77110%
SL Õhtuleht*1 0971 0277%
Ajakirjade Kirjastus*1 1311 0419%
Express Post*586641-9%
Linna Ekraanid *73--
intersegment eliminations(288)(284)-1%
TOTAL joint ventures2 5992 4267%
TOTAL segment by proportional consolidation10 0269 1979%




(thousand EUR)EBITDA
Ekspress Meedia22119911%
Delfi Latvia87(4)2275%
Delfi Lithuania51(103)150%
Hea Lugu(5)(8)38%
Zave Media0(50)100%
Other companies(1)0-
intersegment eliminations00-
TOTAL subsidiaries35334939%
SL Õhtuleht*97970%
Ajakirjade Kirjastus*834779%
Express Post*(25)73-134%
Linna Ekraanid *12--
intersegment eliminations00-227%
TOTAL joint ventures168217-23%
TOTAL segment by proportional consolidation521251108%


* Proportional share of joint ventures



As a market leader Delfi continues to invest into new technologies and IT solutions to improve user experience of its readers and advertisers.

This year the zlick innovation has been developed further that now enables to buy paid content with zero click in all our channels. Delfi Sport launched its mobile application. In digital newspapers the Android application of Eesti Ekspress now also includes an offline reading option. The family package that includes Estonian digital newspapers and magazines of our Group enables access from a separate Android application. Delfi Latvia is preparing transition of all verticals to the so-called responsive design. The transition of the first vertical to the new solution increased the number of the vertical’s users by approximately 30%. Delfi Lithuania was the first local portal to launch an innovative voiceover solution that enables to hear news.


Starting from last year, in addition to online advertising in our own portals our advertising sales departments also offer the possibility to buy advertising in other local or international channels. We also offer our customers a full advertising service from the idea to execution and booking media space, and also offer programmatic advertising sales.


The range of vertical products continues to expand. Delfi Lithuania launched a new sub-site „Delfi Food“. The National Basketball Association (NBA) and Delfi Lithuania started a multi-year cooperation project and launched NBA’s first official Lithuanian online portal in the Delfi environment at To fight fake news, a separate disclose portal was set up at consisting of information that is distributed, but is not true. 


In all three Baltic countries the focus is on writing more long-read analytical articles in order to increase the value of Delfi to users. In Estonia this is being provided in co-operation with editorial teams of our daily and weekly newspapers Eesti Päevaleht, Eesti Ekspress and Maaleht.


Testing of various e-commerce projects and development of classified portals in Latvia and Lithuania continues.

A lot of attention is being paid on socially responsible behaviour and to supporting various charity projects, cultural, sport, social and business events in all Baltic countries.

Estonian online readership 2016-2017

In the third quarter 2016, Gemius changed the methodology of the online readership survey in Estonia, Latvia and Lithuania, as a result of which the readership of mobile devices and tablet PCs was added to the above readership of computer users. Comparable data from Estonia are available only from September 2016.


In the measurement period, the readership of Delfi and Postimees has been relatively stable. In the first quarter of 2016, Postimees merged classified portals and owned by Eesti Meedia into its domain. By adding the number of users of classified portals Postimees achieved a higher number of users than Delfi. Õhtuleht has increased its readership. In March 2017 the number of users of the real estate classified portal of decreased notably as a result of the exit of several real estate portals. This will have an impact in the number of users of in the next quarter.


Latvian online readership 2016-2017

At the beginning of 2016 research company Gemius changed its method of online surveys. These figures now show the number of users of Latvian Internet portals in computers, mobile devices and tablet PCs. Delfi remains stable and is the largest news portal in Latvia by online readership. Inbox that is slightly bigger than Delfi by the number of users is a mail environment and not a news portal. The number of users of Latvian portals has been relatively stable and is similar for all portals. In the first quarter, only TVnet lost relatively many users.

Lithuanian online readership 2016-2017

At the beginning of 2016 research company Gemius changed its method of online survey. These figures now show the number of users of Lithuanian Internet portals in computers, mobile devices and tablet PCs. remains Lithuania’s largest online portal. In the third quarter 2016, merged several portals that are not part of this media group and therefore, the number of users of domain increased in the fourth quarter 2016.  This growth does not show the number of users of media services and therefore cannot be regarded as an improvement of the market situation of In March 2017, the readership of such third portals is no longer considered part of and, as a result, readership of has decreased notably. Delfi increased its readership significantly thanks to new products and active marketing activities. TV3 and are battling for the third place.



To get a fair picture of the newspaper market, one must look at the circulation of newspapers together with the number of subscribers of digital newspaper. The newspaper with the largest circulation in Estonia is Õhtuleht whose number of users exceeded 51 thousand in March 2017. Päevaleht has about 44 thousand users and Eesti Ekspress has over 37 thousand users. The number of users of digital newspapers has notably increased in the recent year and exceeds the decrease in the readership of paper newspapers.


All printing services of the Group are provided by AS Printall which is one of the largest printing companies in Estonia. We are able to print high-quality magazines, newspapers, advertising materials, product and service catalogues, paperback books and other publications in our printing plant. 



(thousand EUR)Sales
Printall5 7676 341-9%




(thousand EUR)EBITDA
Change %
Printall8971 182-24%



The printing services segment continues to be impacted by the economic recession which also has a negative impact on our printing plant.  The production volume of Printall continues to increase, but the price pressure is still strong due to the production capacity which has become available in Scandinavia as well as the activities of competitors. A sheet-fed machine acquired two years ago has helped to prevent a steeper revenue decline, and has helped to expand the product range outside the normal media sector.

Consolidated balance sheet (unaudited)

(thousand EUR)31.03.201731.12.2016
Current assets  
Cash and cash equivalents1 2212 805
Term deposits4151
Trade and other receivables9 0487 468
Corporate income tax prepayment550
Inventories2 5902 770
Total current assets12 95513 094
Non-current assets  
Trade and other receivables1 016982
Deferred tax asset3434
Investments in joint ventures2 5032 435
Investments in associates589591
Property, plant and equipment12 34312 722
Intangible assets44 25444 310
Total non-current assets60 73961 074
TOTAL ASSETS73 69474 168
Current liabilities  
Borrowings2 3472 313
Trade and other payables6 8737 170
Corporate income tax payable91108
Total current liabilities9 3119 591
Non-current liabilities  
Long-term borrowings12 86713 471
Deferred tax liability3333
Total non-current liabilities12 90013 504
Share capital17 87817 878
Share premium14 27714 277
Treasury shares(22)(863)
Reserves1 3112 058
Retained earnings18 03917 723
TOTAL EQUITY51 48351 073

Consolidated statement of comprehensive income (unaudited)

(thousand EUR)Q1 2017Q1 2016
Sales revenue12 40912 255
Cost of sales(10 075)(10 199)
Gross profit2 3342 056
Other income178113
Marketing expenses(716)(517)
Administrative expenses(1 362)(1 309)
Other expenses(25)(19)
Operating profit409324
Interest income5910
Interest expense(108)(120)
Other finance costs(15)(16)
Net finance cost(64) (126)
Profit on shares of joint ventures68132
Profit/(loss) from shares of associates(2) (18)
Profit before income tax411312
Income tax expense10
Net profit  for the reporting period410312
Net profit for the reporting period attributable to:  
Equity holders of the parent company410312
Other comprehensive income00
Total comprehensive income410312
Attributable to equity holders of the parent company410312
Basic and diluted earnings per share0.010.01

Consolidated cash flow statement (unaudited)

(thousand EUR)Q1 2017Q1 2016
Cash flows from operating activities  
Operating profit for the reporting year409324
Adjustments for:  
Depreciation, amortisation and impairment666700
(Gain)/loss on sale and write-down of property, plant and equipment(3)(5)
Change in value of share option034
Cash flows from operating activities:  
Trade and other receivables47220
Trade and other payables(311)45
Cash generated from operations1 4131 062
Income tax paid(73)(28)
Interest paid(108)(120)
Net cash generated from operating activities1 232914
Cash flows from investing activities  
Interest received610
Purchase and receipts of other investments(35)0
Purchase of  property, plant and equipment(242)(205)
Proceeds from sale of property, plant and equipment139
Loans granted(2 000)0
Loan repayments received30
Net cash used in investing activities(2 255)(186)
Cash flows from financing activities  
Finance lease repayments(17)(21)
Loan received011
Repayments of bank loans(552)(542)
Purchase of treasury shares0(29)
Net cash used in financing activities(569)(581)
Cash and cash equivalents at the beginning of the year2 8562 927
Cash and cash equivalents at the end of the year1 2623 075



         Additional information:
         Mari-Liis Rüütsalu
         Chairman of the Management Board
         GSM: +372 512 2591


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