Published: 2018-02-28 15:36:49 CET
Ekspress Grupp
Quarterly report

AS Ekspress Grupp: Consolidated Interim Report for the Fourth Quarter and 12-months of 2017

Tallinn, Estonia, 2018-02-28 15:36 CET --  

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 -
ACM LV 33 - - (37) - -
other companies 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 - (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 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 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

 

 

 

 

 

         Additional information:
         Mari-Liis Rüütsalu
         Chairman of the Management Board
         GSM: +372 512 2591
         e-mail: mariliis.ryytsalu@egrupp.ee


EG_IV_kvartal_2017_ENG.pdf