Consolidated Interim Report for the Fourth Quarter and 12-months of 2017 28.02

The year 2017 was primarily a year of adaption for the Group. At the beginning of the year, changes took place in the managements of the parent company and three media companies domiciled in Estonia.

The trend of users of all ages moving to Internet has become the new normality, creating new possibilities for our products on the one hand while leading to a decline of interest in printed newspapers, magazines and advertising products. All this requires an innovative approach and entry into new lines of business in order to keep pace with the changing needs and requirements of consumers. Constant and bold innovation has become the cornerstone of our activities, it offers excitement and enables us to survive and grow in a more competitive business environment. 

As the market leader of news portals in the Baltic States, Delfi continues to invest in new technology and IT solutions with the goal of improving the user experience of its readers and advertisers in various channels and platforms. In 2017, innovative technology was developed further, enabling to pay for fee-based content with one click. We believe that this technology will also have international success and in addition to taking part in the pilot project, we are also co-investors in Zlick Ltd.

We have launched ad-free Delfi, enabling to read ad-free Delfi portal for a monthly fee. New separate mobile applications of our digital newspapers, various product packages as well as Delfi verticals have been introduced.

The content produced by our companies has almost 75 000 digital subscribers with an access to content in all channels. It marks a strong entry into the market of digital subscribers. We are undoubtedly pioneers in our region, paving the way for the growth of paid content consumption in the Baltic States. This will help us offset the decline in paper revenue.

Since last year, our media companies offer customers an option to buy advertising services ranging from the idea and execution to media space. We also provide programmatic advertising sales and in addition to online advertising, we offer the possibility to buy advertising in other local or international channels. At the year-end, we acquired the remaining 51% holding in Adnet Media, the largest online advertising multi-channel and advertising network in the Baltic States.

As a new trend we have entered the event organising market. In addition to traditional media we are moving more into the entertainment sector, offering our current and new consumers also possibility to experience different events in addition to journalistic content. The greatest success stories include the Game of the Stars of the Estonian Basketball League in February; Ruja’s reunion concert at Tallinn Song Festival Grounds dedicated to the day of regaining independence of Estonia (attended by 14 000 people which was second best result in terms of the concert audience in Estonia in 2017); Kadri Voorand’s sold-out concerts in Nordea Concern Hall and preparations for the large-scale project “Idea for Lithuania” arranged by Delfi Lithuania in February 2018.

We are taking major steps in the business line of digital outdoor advertising. We have actively increased our reach by developing the network of digital billboards. It will be easy to continue from here and focus on sales activities.    

In 2017, the activities of the Group’s media branch were supported by strong macroeconomic indicators in the Baltic States (primarily in Latvia). On the other hand we are also competing with large global giants such as Facebook and Google that grab a larger share of the market growth.

The printing services sector experienced a downturn where the price pressure is extremely strong and the printing company with a focus on quality needs to aggressively expand its products and customer portfolio.

In 2017, the Group’s consolidated revenue increased by 1% as compared to last year and totalled EUR 63.7 million. EBITDA was 21% lower than last year’s level, totalling EUR 6.7 million and the net profit totalled EUR 3.1 million.

The management proposes to pay dividends for 2017 seven euro cents per share in total amount EUR 2.1 million.

Ever-increasing price competition in the printing services segment, declining margins, lower delivery volumes of the home delivery company and increasing staff costs played a role in it. Significant impairment loss of books in the balance sheet of Ajakirjade Kirjastus, that had been published a few years earlier and whose circulations had been way too optimistic, had to be recognised.

As the market of books is in a continuous downturn, the department of the book publishing of Ajakirjade Kirjastus was merged with the Group’s separate book publishing company Hea Lugu in the 4th quarter. Investments have been made in the online capability of Ajakirjade Kirjastus which has increased staff costs and which have had negative impact on the company’s last year’s profit.  

At the year-end, the unprofitable business line of magazines was sold in Lithuania which will enable to focus primarily on online activities and other lines of business that continue growing.

On a positive note, online revenues grew in all countries and by 16% in Group total. Digital subscription revenue has increased by almost 50%. Online revenue now makes up almost 33% of the Group’s total revenue.  

The year 2018 will be a year of new hopes and expectations in several segments. Last year we made major investment decisions and this year should show the first results. In the media sector we are witnessing steady growth in all our companies. This year we will focus on increasing the revenue from digital subscribers. The business line of event organising has proven its viability in Estonia while Lithuania is also gaining momentum. In Latvia, the business of outdoor advertising is strongly underway. In the printing services segment we are expecting stabilisation and witness the effect of new investments on revenue and EBITDA. At the same time we are planning to increase the share of digital revenue in our portfolio – both from the basis of current media business as well as new ideas.

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.

FINANCIAL INDICATORS AND RATIOS – joint ventures consolidated 50% line-by-line

 

Performance indicators – joint ventures 50%

consolidated (EUR thousand)

Q4 2017

Q4 2016

Change %

Q4 2015

Q4 2014

Q4 2013

For the period

 

 

 

 

 

 

Sales

17 606

17 409

1%

17 181

16 778

16 526

EBITDA

1 512

2 981

-49%

2 720

2 757

2 015

EBITDA margin (%)

8.6%

17.1%

 

15.8%

16.4%

12.2%

Operating profit*

630

2 113

-70%

1 936

1 895

1 348

Operating margin* (%)

3.6%

12.1%

 

11.3%

11.3%

8.2%

Interest expenses

(104)

(123)

16%

(141)

(186)

(185)

Net profit/(loss) for the period*

508

1 868

-73%

1 660

1 614

1 057

Net margin* (%)

2.8%

10.7%

 

9.7%

9.6%

6.4%

Net profit for the period in financial statements (incl. write-downs and gain from change in ownership interest)

703

1 868

-62%

460

1 149

(1 410)

Net margin (%)

4.0%

10.7%

 

2.7%

6.8%

-8.5%

Return on assets ROA (%)

0.9%

2.4%

 

0.6%

1.4%

-1.8%

Return on equity ROE (%)

1.3%

3.7%

 

0.9%

2.4%

-3.2%

Earnings per share (EPS)

0.02

0.06

 

0.02

0.04

(0.05)

 

Performance indicators – joint ventures 50%

consolidated (EUR thousand)

12 months 2017

12 months 2016

Change %

12 months 2015

12 months 2014

12 months

2013

For the period

 

 

 

 

 

 

Sales

63 699

62 793

1%

61 528

61 384

58 427

EBITDA

6 713

8 487

-21%

7 869

8 878

7 264

EBITDA margin (%)

10.5%

13.5%

 

12.8%

14.5%

12.4%

Operating profit*

3 526

5 221

-32%

4 866

5 638

4 647

Operating margin* (%)

5.5%

8.3%

 

7.9%

9.2%

8.0%

Interest expenses

(427)

(518)

17%

(618)

(732)

(763)

Net profit/(loss) for the period*

2 952

4 406

-33%

3 907

4 620

3 548

Net margin* (%)

4.6%

7.0%

 

6.4%

7.5%

6.1%

Net profit for the period in financial statements (incl. write-downs and gain from change in ownership interest)

3 146

4 406

-29%

2 707

5 110

1 081

Net margin (%)

4.9%

7.0%

 

4.4%

8.3%

1.9%

Return on assets ROA (%)

4.1%

5.8%

 

3.5%

6.6%

1.4%

Return on equity ROE (%)

6.1%

8.9%

 

5.6%

11.4%

2.5%

Earnings per share (EPS)

0.11

0.15

 

0.09

0.17

0.04

* The results reflect the outcome of regular business activities and do not include impairment losses on goodwill, profit arised from the changes in ownership interests in our joint ventures etc.

Balance sheet – joint ventures 50% consolidated (thousand EUR)

31.12.2017

31.12.2016

Change %

As of the end of the period

 

 

 

Current assets

16 725

16 250

3%

Non-current assets

62 597

61 507

2%

Total assets

79 322

77 757

2%

      incl. cash and bank

2 818

4 572

-38%

      incl. goodwill

39 920

38 904

3%

Current liabilities

11 081

12 223

-9%

Non-current liabilities

15 747

14 462

9%

Total liabilities

26 828

26 684

1%

      incl. borrowings

15 791

16 603

-5%

 

Equity

52 494

51 073

3%

 

  Financial ratios (%) – joint ventures consolidated 50%

31.12.2017

31.12.2016

Equity ratio (%)

66%

66%

Debt to equity ratio (%)

30%

33%

Debt to capital ratio (%)

20%

19%

Total debt/EBITDA ratio

2.35

1.96

Liquidity ratio

1.51

1.33

 

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

Performance indicators – joint ventures under equity method (thousand EUR)

Q4 2017

Q4 2016

Change %

Q4 2015

Q4 2014

Q4 2013

For the period

 

 

 

 

 

 

Sales (only subsidiaries)

15 016

14 743

2%

14 811

14 454

14 291

EBITDA (only subsidiaries)

1 590

2 660

-40%

2 440

2 413

1 815

EBITDA margin (%)

10.6%

18.0%

 

16.5%

16.7%

12.7%

Operating profit* (only subsidiaries)

840

1 889

-56%

1 718

1 661

1 175

Operating margin* (%)

5.6%

12.8%

 

11.6%

11.5%

8.2%

Interest expenses (only subsidiaries)

(97)

(114)

15%

(125)

(158)

(185)

Profit of joint ventures by equity method

(233)

210

-211%

196

182

174

Net profit for the period*

508

1 868

-73%

1 660

1 601

1 057

Net margin* (%)

3.4%

12.7%

 

11.2%

11.1%

7.4%

Net profit for the period in financial statements (incl. write-downs and gain from change in ownership interest)

703

1 868

-62%

460

1 136

(1 410)

Net margin (%)

4.7%

12.7%

 

3.1%

7.9%

-9.9%

Return on assets ROA (%)

0.9%

2.5%

 

0.6%

1.5%

-1.8%

Return on equity ROE (%)

1.3%

3.7%

 

0.9%

2.4%

-3.2%

Earnings per share (EPS)

0.02

0.06

 

0.02

0.04

(0.05)

 

Performance indicators – joint ventures under equity method (thousand EUR)

12 months 2017

12 months

2016

Change %

12 months

2015

12 months

2014

12 months

2013

For the period

 

 

 

 

 

 

Sales (only subsidiaries)

54 070

53 324

1%

52 773

52 793

50 086

EBITDA (only subsidiaries)

6 261

7 280

-14%

6 680

7 894

6 591

EBITDA margin (%)

11.6%

13.7%

 

12.7%

15.0%

13.2%

Operating profit* (only subsidiaries)

3 475

4 328

-20%

3 920

4 973

4 071

Operating margin* (%)

6.4%

8.1%

 

7.4%

9.4%

8.1%

Interest expenses (only subsidiaries)

(400)

(471)

15%

(550)

(689)

(763)

Profit of joint ventures by equity method

(2)

772

-100%

785

557

494

Net profit for the period*

2 952

4 406

-33%

3 907

4 621

3 548

Net margin* (%)

5.5%

8.3%

 

7.4%

8.8%

7.1%

Net profit for the period in financial statements (incl. write-downs and gain from change in ownership interest)

3 146

4 406

-29%

2 707

5 110

1 081

Net margin (%)

5.8%

8.3%

 

5.1%

9.7%

2.2%

Return on assets ROA (%)

4.2%

6.1%

 

3.7%

6.8%

1.4%

Return on equity ROE (%)

6.1%

8.9%

 

5.6%

11.4%

2.5%

Earnings per share (EPS)

0.11

0.15

 

0.09

0.17

0.04

* The results reflect the outcome of regular business activities and do not include impairment losses on goodwill, profit arised from the changes in ownership interests in our joint ventures etc.

 

Balance sheet – joint ventures under equity method

(thousand EUR)

31.12.2017

31.12.2016

Change %

As of the end of the period

 

 

 

Current assets

13 827

13 094

6%

Non-current assets

62 130

61 074

2%

Total assets

75 957

74 169

2%

      incl. cash and bank

1 073

2 856

-62%

      incl. goodwill

37 969

36 953

3%

Current liabilities

8 372

9 591

-13%

Non-current liabilities

15 091

13 504

12%

Total liabilities

23 463

23 095

2%

      incl. borrowings

15 257

15 784

-3%

Equity

52 494

51 073

3%

 

  Financial ratios (%) – joint ventures consolidated under equity

31.12.2017

31.12.2016

Equity ratio (%)

69%

69%

Debt to equity ratio (%)

29%

31%

Debt to capital ratio (%)

21%

20%

Total debt/EBITDA ratio

2.44

2.17

Liquidity ratio

1.65

1.37

 

Formulas used to calculate the financial ratios

EBITDA

 Earnings 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

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 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

* The results reflect the outcome of regular business activities and do not include impairment losses on goodwill, profit arised from the changes in ownership interests in our joint ventures etc.

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 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.  

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.  

SEGMENT OVERVIEW

The Group’s activities are divided into two large segments - media segment and printing services 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 Q4 2013-2017

(thousand EUR)

Sales

Sales

 

Q4

 2017

Q4

2016

Change %

Q4

 2015

Q4

 2014

Q4

 2013

media segment (by equity method)

9 449

8 861

7%

8 399

7 535

7 617

      incl. revenue from all digital and online channels

5 944

4 993

19%

4 544

4 015

3 389

printing services segment

6 496

6 952

-7%

7 386

8 083

7 566

entertainment segment

0

0

-

0

0

0

corporate functions

686

566

21%

543

459

393

intersegment eliminations

(1 616)

(1 635)

 

(1 517)

(1 624)

(1 286)

TOTAL GROUP under equity method

15 016

14 743

2%

14 811

14 454

14 291

media segment (by proportional consolidation)

12 391

11 836

5%

11 042

10 141

10 042

      incl. revenue from all digital and online channels

6 272

5 286

19%

4 841

4 257

3 584

printing services segment

6 496

6 952

-7%

7 386

8 083

7 566

entertainment segment

0

0

-

0

0

0

corporate functions

686

566

21%

543

459

393

intersegment eliminations

(1 967)

(1 944)

 

(1 790)

(1 905)

(1 477)

TOTAL GROUP by proportional consolidation

17 606

17 409

1%

17 181

16 778

16 525

 

(thousand EUR)

EBITDA

EBITDA

 

Q4

 2017

Q4

2016

Change %

Q4

 2015

Q4

 2014

Q4

 2013

media segment (by equity method)

1 168

1 618

-28%

1 299

1 103

1 014

media segment by proportional consolidation

1 089

1 939

-44%

1 580

1 447

1 214

printing services segment

952

1 329

-28%

1 355

1 623

1 604

entertainment segment

0

0

-

(4)

0

0

corporate functions

(529)

(287)

85%

(210)

(313)

(763)

intersegment eliminations

0

0

 

0

0

(40)

TOTAL GROUP under equity method

1 590

2 660

-40%

2 440

2 413

1 815

TOTAL GROUP by proportional consolidation

1 512

2 981

-49%

2 720

2 757

2 015

 

EBITDA margin

Q4

 2017

Q4

 2016

Q4

 2015

Q4

 2014

Q4

 2013

media segment (by equity method)

12%

18%

15%

15%

13%

media segment by proportional consolidation

9%

16%

14%

14%

12%

printing services segment

15%

19%

18%

20%

21%

TOTAL GROUP under equity method

11%

18%

16%

17%

13%

TOTAL GROUP by proportional consolidation

9%

17%

16%

16%

12%

 

Key financial data of the segments 12 months 2013-2017

(thousand EUR)

Sales

Sales

 

12 months

 2017

12 months

2016

Change %

12 months

 2015

12 months

 2014

12 months

 2013

media segment (by equity method)

33 498

31 579

6%

30 063

27 459

25 842

      incl. revenue from all digital and online channels

19 963

17 307

15%

15 555

13 449

11 595

printing services segment

23 879

25 585

-7%

25 842

28 951

27 462

entertainment segment

0

0

-

517

0

0

corporate functions

2 486

2 233

11%

1 937

1 731

1 530

intersegment eliminations

(5 793)

(6 073)

 

(5 586)

(5 347)

(4 748)

TOTAL GROUP under equity method

54 070

53 324

1%

52 773

52 793

50 086

media segment (by proportional consolidation)

44 429

42 231

5%

39 942

36 930

34 954

      incl. revenue from all digital and online channels

21 024

18 094

16%

16 619

14 306

12 226

printing services segment

23 879

25 585

-7%

25 842

28 951

27 462

entertainment segment

0

0

-

517

0

0

corporate functions

2 486

2 233

11%

1 937

1 731

1 530

intersegment eliminations

(7 095)

(7 255)

 

(6 710)

(6 228)

(5 520)

TOTAL GROUP by proportional consolidation

63 699

62 793

1%

61 528

61 384

58 426

 

(thousand EUR)

EBITDA

EBITDA

 

12 months

 2017

12 months

2016

Change %

12 months

 2015

12 months

 2014

12 months

 2013

media segment (by equity method)

3 729

3 572

4%

3 724

3 026

2 124

media segment by proportional consolidation

4 181

4 779

-13%

4 913

4 010

2 796

printing services segment

3 734

4 645

-20%

4 966

5 944

5 862

entertainment segment

0

(2)

-76%

(1 110)

0

0

corporate functions

(1 201)

(936)

28%

(899)

(1 076)

(1 356)

intersegment eliminations

0

0

 

0

0

(38)

TOTAL GROUP under equity method

6 261

7 280

-14%

6 680

7 894

6 591

TOTAL GROUP by proportional consolidation

6 713

8 487

-21%

7 869

8 878

7 264

 

EBITDA margin

12 months

 2017

12 months

 2016

12 months

 2015

12 months

 2014

12 months

 2013

media segment (by equity method)

11%

11%

12%

11%

8%

media segment by proportional consolidation

9%

11%

12%

11%

8%

printing services segment

16%

18%

19%

21%

21%

TOTAL GROUP under equity method

12%

14%

13%

15%

13%

TOTAL GROUP by proportional consolidation

11%

14%

13%

14%

12%

 

MEDIA SEGMENT

The media segment includes Group’s activities in Estonia, Latvia and Lithuania. It comprises online portal Delfi operations, other different news portals, providing online advertising network and programmatic sales, providing outdoor digital screen advertising in Estonia and Latvia, publishing of Estonian weekly newspapers Maaleht, Eesti Ekspress and LP, publishing daily newspapers Eesti Päevaleht and tabloid Õhtuleht, publishing freesheet Linnaleht, publishing books and magazines in Estonia and Lithuania, providing home delivery services.

Latvian digital screen company ACM LV was acquired in the 3rd quarter of 2017. 100% ownership was acquired in Adnet Media in the 4th quarter of 2017.

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

SL Õhtuleht

www.ohtuleht.ee

 

ru.delfi.lt

 

www.vecherka.ee

 

(thousand EUR)

Sales

EBITDA

 

Q4
 2017

Q4
2016

Change
%

Q4
2017

Q4
2016

Change
 %

Ekspress Meedia

5 039

5 085

-1%

391

443

-12%

        incl. Delfi Estonia online revenue

1 828

1 772

3%

 

 

 

Delfi Latvia

1 086

997

9%

132

262

-50%

Delfi Lithuania

2 786

2 558

9%

628

865

-27%

        incl. Delfi Lithuania online revenue

2 328

2 041

14%

 

 

 

Adnet

384

-

-

24

-

-

Hea Lugu

241

230

4%

43

50

-13%

Zave Media

0

0

-

0

0

-

ACM LV

33

-

-

(37)

-

-

other companies

0

0

-

(15)

(1)

1078%

intersegment eliminations

(120)

(9)

 

2

0

 

TOTAL subsidiaries

9 449

8 861

7%

1 168

1 618

-28%

SL Õhtuleht*

1 236

1 134

9%

71

65

9%

Ajakirjade Kirjastus*

1 245

1 368

-9%

(123)

160

-177%

Express Post*

640

677

-5%

(36)

75

-148%

Linna Ekraanid*

85

115

-26%

9

20

-57%

intersegment eliminations

(264)

(318)

 

2

0

 

TOTAL joint ventures

2 942

2 975

-1%

(77)

320

-124%

TOTAL segment by proportional consolidation

12 391

11 836

5%

1 089

1 939

-44%

* Proportional share of joint ventures

 

(thousand EUR)

Sales

EBITDA

 

12 months
 2017

12 months
2016

Change
%

12 months
2017

12 months
2016

Change
 %

Ekspress Meedia

19 309

19 116

1%

1 554

1 448

7%

        incl. Delfi Estonia online revenue

6 853

6 728

2%

 

 

 

Delfi Latvia

3 811

3 375

13%

395

413

-4%

Delfi Lithuania

9 544

8 563

11%

1 799

1 741

3%

        incl. Delfi Lithuania online revenue

7 831

6 601

19%

 

 

 

Adnet

384

-

-

24

-

-

Hea Lugu

523

538

-3%

26

33

-21%

Zave Media

0

1

-1

(0)

(61)

-100%

ACM LV

54

-

-

(55)

-

-

other companies

0

0

-

(16)

(2)

574%

intersegment eliminations

(126)

(13)

 

2

0

 

TOTAL subsidiaries

33 498

31 579

6%

3 729

3 572

4%

SL Õhtuleht*

4 625

4 329

7%

433

394

10%

Ajakirjade Kirjastus*

4 576

4 765

-4%

69

544

-87%

Express Post*

2 369

2 609

-9%

(117)

247

-147%

Linna Ekraanid*

411

166

148%

66

22

195%

intersegment eliminations

(1 052)

(1 218)

 

2

0

 

TOTAL joint ventures

10 931

10 651

3%

453

1 207

-62%

TOTAL segment by proportional consolidation

44 429

42 231

5%

4 181

4 779

-13%

* Proportional share of joint ventures

 

ONLINE MEDIA

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 data on the users of mobile devices and tablet PCs is now added into those of PC users. The comparable data is available only from September of last year.

The number of users of Delfi in Estonia has been stable. In July 2017, the growth in the number of users of Delfi represented a technical measurement inaccuracy and not an actual result.

Latvian online readership 2016-2017

Delfi continues to be the news portal with the largest online readership in Latvia. According to the survey commissioned by the Latvian government in spring 2017, Delfi.lv is Latvia’s most trusted media channel and it is trusted even more than the state-owned TV-station. In July 2017, the growth in the number of users of Delfi represented a technical measurement inaccuracy and not an actual result.

Lithuanian online readership 2016-2017

Delfi.lt remains Lithuania’s largest online portal with a high visibility in Lithuania. The Lithuanian online readership has remained stable. In 2017, Delfi has been able to grow the lead over competition on the market thanks to new products and good marketing execution, as well as good progress in mobile.

 

PRINT MEDIA

Estonian newspaper circulations 2016-2017

Since October 2016 and throughout 2017, the daily newspaper with the largest circulation in Estonia was Õhtuleht. Traditionally, Maaleht was the largest in January and December. From the total circulation numbers, this graph shows print circulation only, digital newspaper subscribers are not reflected here.

Circulations of Group newspapers together with digital subscribers 2016-2017

To provide more complete overview of the newspaper market dynamics, the circulation of paper newspapers needs to be viewed together with the number of digital subscribers. This shows how the decrease in print subscribers has been more than compensated by digital subscribers and how for the second half of 2017 the combined growth of print circulation and digital subscribers has been clearly positive for all our newspapers. Eesti Päevaleht has been the earliest and most successful in managing the market turnaround and developing its digital business. Based on the available data, we can show the combined information of print and digital only for the newspapers of Ekspress Grupp. Even if other newspapers on the market have digital-only products, there is currently no available data for digital subscribers of other publishers.

PRINTING SERVICES SEGMENT

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

EBITDA

 

Q4

2017

Q4

2016

Change

%

Q4

2017

Q4

2016

Change %

Printall

6 496

6 952

-7%

952

1 329

-28%

 

(thousand EUR)

Sales

EBITDA

 

12 months

2017

12 months

2016

Change

%

12 months

2017

12 months

2016

Change %

Printall

23 879

25 585

-7%

3 734

4 645

-20%

 

Already several years the printing services segment continues to be under pressure due to continues digitalization of regular journalism and internet taking its share from printed products. The price pressure is very strong both in Scandinavia and Estonia including more competitive services provided by other Baltic States. 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 regular media sector. More active sales approach has been taken outside of Nordic countries.

Consolidated balance sheet (unaudited)

(thousand EUR)

31.12.2017

31.12.2016

ASSETS

 

 

Current assets

 

 

Cash and cash equivalents

1 037

2 805

Term deposits

36

51

Trade and other receivables

9 917

7 468

Corporate income tax receivable

4

0

Inventories

2 832

2 770

Total current assets

13 827

13 094

Non-current assets

 

 

Trade and other receivables

1 750

982

Deferred tax asset

47

34

Investments in joint ventures

2 372

2 435

Investments in associates

354

591

Property, plant and equipment

12 189

12 722

Intangible assets

45 419

44 310

Total non-current assets

62 130

61 074

TOTAL ASSETS

75 957

74 168

LIABILITIES

 

 

Current liabilities

 

 

Borrowings

166

2 313

Trade and other payables

8 095

7 170

Corporate income tax payable

111

108

Total current liabilities

8 372

9 591

Non-current liabilities

 

 

Long-term borrowings

15 091

13 471

Deferred tax liability

0

33

Total non-current liabilities

15 091

13 504

TOTAL LIABILITIES

23 463

23 095

EQUITY

 

 

Minority interest

68

0

Capital and reserves attributable to equity holders of parent company:

 

 

Share capital

17 878

17 878

Share premium

14 277

14 277

Treasury shares

(22)

(863)

Reserves

1 531

2 058

Retained earnings

18 762

17 723

Total capital and reserves attributable to equity holders of parent company

52 426

51 073

TOTAL EQUITY

52 494

51 073

TOTAL LIABILITIES AND EQUITY

75 957

74 168

Consolidated statement of comprehensive income (unaudited)

(thousand EUR)

Q4 2017

Q4 2016

12 months 2017

12 months 2016

Sales revenue

15 016

14 743

54 070

53 324

Cost of sales

(11 900)

(11 163)

(42 869)

(42 122)

Gross profit

3 115

3 580

11 201

11 202

Other income

471

579

1 189

1 085

Marketing expenses

(821)

(770)

(2 898)

(2 488)

Administrative expenses

(1 884)

(1 446)

(5 921)

(5 357)

Other expenses

(42)

(54)

(97)

(114)

Gain from selling business assets

194

0

194

0

Operating profit

1 034

1 889

3 669

4 328

Interest income

36

7

173

32

Interest expense

(97)

(114)

(400)

(471)

Foreign exchange gains (losses)

(4)

(6)

(11)

(10)

Other finance costs

174

(10)

129

(56)

Net finance cost

108

(123)

(109)

(505)

Profit/(loss) on shares of joint ventures

(233)

210

(2)

772

Profit/(loss) from shares of associates

(17)

72

(68)

113

Profit before income tax

892

2 047

3 490

4 708

Income tax expense

(190)

(180)

(344)

(302)

Net profit for the reporting period

703

1 868

3 146

4 406

Net profit for the reporting period attributable to:

 

 

 

 

Equity holders of the parent company

696

1 868

3 140

4 406

Minority shareholders

6

0

6

0

Other comprehensive income

0

0

0

0

Total comprehensive income

703

1 868

3 146

4 406

Comprehensive income for the reporting period attributable to:

 

 

 

 

Equity holders of the parent company

696

1 868

3 140

4 406

Minority shareholders

6

0

6

0

Basic and diluted earnings per share

0.02

0.06

0.11

0.15

Consolidated cash flow statement (unaudited)

(EUR thousand)

12 months 2017

12 months 2016

Cash flows from operating activities

 

 

Operating profit for the reporting year

3 669

4 328

Adjustments for:

 

 

Depreciation, amortisation and impairment

2 787

2 953

Gain from selling business assets

(194)

0

(Gain)/loss on sale and write-down of property, plant and equipment

(11)

37

Change in value of share option

0

136

Cash flows from operating activities:

 

 

Trade and other receivables

(105)

(709)

Inventories

(62)

(53)

Trade and other payables

(497)

484

Cash generated from operations

5 587

7 175

Income tax paid

(371)

(293)

Interest paid

(448)

(519)

Net cash generated from operating activities

4 769

6 363

Cash flows from investing activities

 

 

Acquisition of subsidiaries (less cash acquired)

(546)

0

Acquisition of joint ventures

0

(868)

Acquisition of associate

(74)

(311)

Purchase and receipts of other investments

(785)

5

Proceeds from sale of business assets

130

0

Interest received

169

32

Purchase of property, plant and equipment

(2 023)

(1 335)

Proceeds from sale of property, plant and equipment

12

39

Loans granted

(2 227)

(25)

Loan repayments received

1 054

175

Net cash used in investing activities

(4 290)

(2 289)

Cash flows from financing activities

 

 

Dividends paid

(1 787)

(1 456)

Dividend received from associates and joint ventures

56

246

Finance lease repayments

(71)

(72)

Change in use of overdraft

92

0

Loan received

0

11

Repayments of bank loans

(552)

(2 186)

Purchase of treasury shares

0

(687)

Net cash used in financing activities

(2 261)

(4 144)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

(1 782)

(71)

Cash and cash equivalents at the beginning of the year

2 856

2 927

Cash and cash equivalents at the end of the year

1 073

2 856

 


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