The year 2020 as a whole was successful for AS Ekspress Grupp: despite the state
of emergency and the economic uncertainty related to the corona crisis, the
Group managed to strengthen its positions and significantly improve
profitability. The revenue over the 12-month period decreased by 6% to EUR
63.2 million and net profit increased by 80% to EUR 2.5 million as compared to
2019. The share of the Group's digital revenue was 49% of the total revenue and
71% of the media segment revenue.
In the fourth quarter of 2020, the revenue of AS Ekspress Grupp totalled EUR
18.4 million and net profit totalled EUR 1.6 million. Considering the ongoing
pandemic, the financial results of the Group were very strong in the 4(th)
quarter. The revenue in the media segment demonstrated a strong recovery - as
compared to the previous year, revenue remained at the same level, i.e. EUR 13
million. The media segment revenue for the entire year totalled EUR 43.7 million
which is only 1% lower as compared to the previous year. The media segment
revenue benefited from the strong sales of both online advertising as well as
digital subscriptions.
The Group's 12-month revenue totalled EUR 63 million which is 6% lower than a
year ago. The six per cent revenue drop is primarily related to the state of
emergency in the 2(nd) quarter and the revenue drop of the printing services
segment throughout the year.
In the 4(th) quarter, the digital revenue of Ekspress Grupp increased and
accounted for 71% of the Group's media segment revenue and 49% of the Group's
total revenue. In 2020, the volume of digital subscriptions of AS Ekspress Grupp
increased by 73% in the Baltic States and was more than 81 thousand at the end
of the year. The year 2020 was a breakthrough year for us in all of our markets
in terms of the digital subscription growth of our periodicals. The key reason
for subscription growth was the change in the people's attitudes and habits as
well as the major changes and processes occurring in the society. Paying for
high-quality digital content in one's native language is becoming a norm these
days. The general background also supported the change - dissemination of fake
news and conspiracy theories on social media platforms has in turn laid
importance on objective journalism in the society.
Earnings before interest, tax, depreciation and amortisation (EBITDA) of
Ekspress Grupp totalled EUR 2.4 million in the 4(th) quarter which is EUR 0.7
million lower as compared to the 4(th) quarter of 2019. Due to the ongoing
impact of the COVID-19 crisis on the economic situation, in the 4(th) quarter of
2020 the Group recognised a one-off impairment loss of property, plant and
equipment in the amount of EUR 1.0 million and one-off public measures related
to the corona crisis in the amount of EUR 0.4 million. The 12-month EBITDA
totalled EUR 7.0 million, increasing by 3% year-over-year. While over the 12-
month period, the Group's revenue was ca EUR 4.2 million lower as compared to
2019, primarily due to the impact of the COVID-19 pandemic, cost savings in the
same period totalled EUR 5.4 million.
The Group's net profit totalled EUR 1.6 million in the 4th quarter and EUR 2.5
million over the 12-month period. The fourth quarter results were positively
impacted by ongoing cost savings, revenue recovery and the adjustment of fair
value of the unpaid future liability of the acquisition price of the ticket
sales platform which was recognised as one-off financial income in the amount of
EUR 0.7 million. The net profit earned in 2020 is 80% higher as compared to the
previous year.
The state of emergency related to the COVID-19 crisis has impacted the
activities of the Latvian ticket sales platform the most. The Latvian government
has set a 50% limit on the occupancy rate of movie theatres and in November, a
new state of emergency was declared that will last at least until 4 April 2021.
Due to the state of emergency, all events have been cancelled as a result of
which the activities of the ticket sales platform are considerably impaired.
However, the ticket sales platform has been able to focus on the development of
its web platform.
The Group's liquidity continues to be strong. As of 31 December 2020, the
Group's available cash totalled EUR 6.3 million (31.12.2019: EUR 3.6 million).
Liquidity was positively impacted by the grace periods granted by banks,
periodisation of the tax payment liability and the salary subsidy received from
the Estonian Unemployment Insurance Fund. For the Group, it is important to
maintain its liquidity position as the future scope of the crisis related to the
coronavirus is still unknown in 2021.
The Management Board makes a proposal not to distribute the profit for 2020 as
the Group's goal is to continue to make investments in order to grow its digital
business line. The strategic focus of AS Ekspress Grupp is the development of
the highest quality and most effective media organisation, growth of its digital
business both organically and through new acquisitions as well as maintaining
its leadership position in print media as many readers still prefer the printed
format in addition to digital media.
SUMMARY OF THE RESULTS OF THE FOURTH QUARTER AND 12 MONTHS
In accordance with International Financial Reporting Standards (IFRS), 50% joint
venture should be recognised under the equity method in the consolidated
financial statements. To provide a clearer uniform overview of the financial
statements to the readers of the financial statements, from the 1(st) quarter of
2020, only the information relating to the joint ventures recognised under the
equity method is presented in the financial statements and their results are
shown as one line in the finance income.
REVENUE
The consolidated revenue for the 4(th) quarter of 2020 totalled EUR 18.4 million
(4(th) quarter 2019: EUR 19.7 million). Revenue decreased by 7% year-over-year
in the 4(th) quarter. The consolidated revenue for the 12 months of 2020
totalled EUR 63.2 million (12 months of 2019: EUR 67.5 million). For the full
year the digital revenue accounted for 49% of total revenue and 71% of media
segment revenue (12 months 2019: 45% of total revenue and 69% of media segment
revenue, respectively).
PROFITABILITY
In the 4(th )quarter of 2020, the consolidated EBITDA totalled EUR 2.45 million
(4(th) quarter 2019: EUR 3.20 million) and in the 12 months of 2020, the
consolidated EBITDA totalled EUR 7.00 million (12 months 2019: EUR 6.77
million). In the 4(th) quarter of 2020, EBITDA decreased by 23% year-over-year
and the EBITDA margin was 13.3% (4(th) quarter 2019: 16.2%) and in the 12 months
of 2020, EBITDA increased by 3% as compared to the previous year and the EBITDA
margin was 11.1% (12 months 2019: 10.0%). Due to the continuing impact of COVID-
19 on the economic situation, the Group has recognized a one-time impairment of
property, plant and equipment in the amount of EUR 1.0 million in the 4(th)
quarter of 2020. Profitability was positively impacted by cost savings
implemented throughout the entire Group the 2(nd) to the 4(th) quarter and the
salary subsidy of the Estonian Unemployment Insurance Fund in the amount of EUR
1.14 million that was received in the 2(nd) quarter and was accrued as income in
the second, third and fourth quarters. The salary subsidy accounted for EUR
0.41 million of the EBITDA in the 4(th) quarter of 2020 and EUR 1.14 million of
the EBITDA in the 12 months of 2020. Compared to 2019, the Group has lost
approximately EUR 4.2 million in sales revenue, mainly due to the impact of the
COVID-19 pandemic, while EUR 5.4 million have been saved in expenses compared to
the same period.
In the 4(th )quarter of 2020, the consolidated net profit totalled EUR 1.61
million (4(th) quarter 2019: EUR 1.65 million) and for the 12 months of 2020
totalled EUR 2.54 million (12 months 2019: EUR 1.41) which is EUR 1.13 million
and 80% higher than in 2019. The net profit of the 4(th )quarter was positively
impacted by the continuous cost savings, the recovery of sales revenue and the
adjustment of fair value of unpaid future liability of the acquisition price of
the ticket sales platform, which was recognized as a one-off financial income of
EUR 0.7 million.
CASH POSITION
At the end of the reporting period, the Group had available cash in the amount
of EUR 6.3 million and equity in the amount of EUR 54.6 million (58% of total
assets). The comparable data as of 31 December 2019 were EUR 3.6 million and EUR
51.6 million (54% of total assets), respectively. As of 31 December 2020, the
Group's net debt totalled EUR 15.9 million (31 December 2019: EUR 20.7 million).
Due to the state of emergency related to COVID-19, the Group concluded an
agreement with AS SEB Pank to suspend loan payments in the period March-August
2020 (EUR 1.2 million) and with AS Citadele banka in the period of June-November
2020 (EUR 0.3 million). The salary subsidy received from the Estonian
Unemployment Insurance Fund (EUR 1.14 million) and the postponement of the
payment of tax arrears (EUR 1.60 million) due to the state of emergency for the
period of 24 months had an additional positive impact on the Group's cash
position.
Key financial indicators for segments
(EUR thousand) Sales
12 months 12 months
Q4 2020 Q4 2019 Change % 2020 2019 Change %
Media segment 13 061 13 441 -3% 43 728 44 218 -1%
incl.
revenue from all
digital and online
channels 9 625 9 842 -2% 30 963 30 534 1%
incl. % of
revenue from all
digital and online
channels 74% 73% 71% 69%
Printing services
segment 5 670 6 906 -18% 21 384 25 695 -17%
Corporate
functions 1 032 518 99% 2 761 2 076 33%
Inter-segment
eliminations (1 387) (1 180) (4 629) (4 533)
TOTAL GROUP 18 377 19 685 -7% 63 243 67 456 -6%
incl. % of revenue
from all digital
and online
channels 52% 50% 49% 45%
(EUR thousand) EBITDA
12 months 12 months
Q4 2020 Q4 2019 Change % 2020 2019 Change %
Media segment 3 110 2 978 4% 6 601 5 966 11%
Printing services
segment 790 567 39% 2 224 2 032 9%
Corporate
functions (394) (296) -33% (720) (1 150) 37%
Inter-segment
eliminations* (1 058) (52) (1 101) (75)
TOTAL GROUP 2 448 3 196 -23% 7 004 6 772 3%
* Due to continuing impact of COVID-19 on economical situation the group has
recognised an impairment loss for property, plant and equipment in amount of EUR
1.0 million in the 4(th) quarter 2020.
EBITDA margin Q4 2020 Q4 2019 12 months 2020 12 months 2019
Media segment 24% 22% 15% 13%
Printing services segment 14% 8% 10% 8%
TOTAL GROUP 13% 16% 11% 10%
Consolidated balance sheet (unaudited)
(EUR thousand) 31.12.2020 31.12.2019
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ASSETS
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Current assets
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Cash and cash equivalents 6 269 3 647
-------------------------------------------------------------------------------
Trade and other receivables 9 450 12 705
-------------------------------------------------------------------------------
Corporate income tax prepayment 7 0
-------------------------------------------------------------------------------
Inventories 2 756 3 120
-------------------------------------------------------------------------------
Total current assets 18 482 19 472
-------------------------------------------------------------------------------
Non-current assets
-------------------------------------------------------------------------------
Other receivables and investments 982 975
-------------------------------------------------------------------------------
Deferred tax asset 30 38
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Investments in joint ventures 1 661 1 254
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Investments in associates 2 253 2 356
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Property, plant and equipment 14 134 14 943
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Intangible assets 56 635 56 369
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Total non-current assets 75 696 75 935
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TOTAL ASSETS 94 177 95 407
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LIABILITIES
-------------------------------------------------------------------------------
Current liabilities
-------------------------------------------------------------------------------
Borrowings 3 613 5 100
-------------------------------------------------------------------------------
Trade and other payables 15 251 16 483
-------------------------------------------------------------------------------
Corporate income tax payable 81 65
-------------------------------------------------------------------------------
Total current liabilities 18 945 21 647
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Non-current liabilities
-------------------------------------------------------------------------------
Long-term borrowings 18 589 19 242
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Other long-term liabilities 2 025 2 895
-------------------------------------------------------------------------------
Total non-current liabilities 20 613 22 137
-------------------------------------------------------------------------------
TOTAL LIABILITIES 39 558 43 784
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EQUITY
-------------------------------------------------------------------------------
Minority interest 126 100
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Capital and reserves attributable to equity holders of
parent company:
-------------------------------------------------------------------------------
Share capital 18 478 17 878
-------------------------------------------------------------------------------
Share premium 14 277 14 277
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Treasury shares (209) (22)
-------------------------------------------------------------------------------
Reserves 1 758 1 688
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Retained earnings 20 189 17 701
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Total capital and reserves attributable to equity
holders of parent company 54 493 51 522
-------------------------------------------------------------------------------
TOTAL EQUITY 54 619 51 622
-------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY 94 177 95 407
-------------------------------------------------------------------------------
Consolidated statement of comprehensive income (unaudited)
(EUR thousand) Q4 2020 Q4 2019 12 months 2020 12 months 2019
-------------------------------------------------------------------------------
Sales 18 377 19 685 63 243 67 456
-------------------------------------------------------------------------------
Cost of sales (13 312) (14 660) (50 637) (54 044)
-------------------------------------------------------------------------------
Gross profit 5 065 5 025 12 607 13 412
-------------------------------------------------------------------------------
Other income 784 157 2 040 607
-------------------------------------------------------------------------------
Marketing expenses (752) (814) (2 701) (3 124)
-------------------------------------------------------------------------------
Administrative expenses (2 379) (2 156) (7 532) (8 024)
-------------------------------------------------------------------------------
Other expenses (1 232) (94) (1 336) (148)
-------------------------------------------------------------------------------
Operating profit /(loss) 1 485 2 119 3 078 2 722
-------------------------------------------------------------------------------
Interest income 9 4 28 22
-------------------------------------------------------------------------------
Interest expenses (219) (229) (877) (784)
-------------------------------------------------------------------------------
Other finance income/(costs) 675 (24) 614 (61)
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Net finance cost 465 (249) (235) (823)
-------------------------------------------------------------------------------
Profit/(loss) on shares of
joint ventures (5) (22) 102 (38)
-------------------------------------------------------------------------------
Profit/(loss) on shares of
associates (54) (17) (129) (114)
-------------------------------------------------------------------------------
Profit /(loss) before income
tax 1 891 1 831 2 816 1 746
-------------------------------------------------------------------------------
Income tax expense (277) (186) (280) (339)
-------------------------------------------------------------------------------
Net profit /(loss) for the
reporting period 1 614 1 645 2 536 1 407
-------------------------------------------------------------------------------
Net profit /(loss) for the
reporting period attributable
to
-------------------------------------------------------------------------------
Equity holders of the parent
company 1 603 1 637 2 510 1 394
-------------------------------------------------------------------------------
Minority interest 11 8 26 13
-------------------------------------------------------------------------------
Total comprehensive income
/(loss) 1 614 1 645 2 536 1 407
-------------------------------------------------------------------------------
Comprehensive income /(loss)
for the reporting period
attributable to
-------------------------------------------------------------------------------
Equity holders of the parent
company 1 603 1 637 2 510 1 394
-------------------------------------------------------------------------------
Minority interest 11 8 26 13
-------------------------------------------------------------------------------
Basic earnings per share 0.05 0.05 0.08 0.05
-------------------------------------------------------------------------------
Diluted earnings per share 0.05 0.05 0.08 0.05
-------------------------------------------------------------------------------
Consolidated cash flow statement (unaudited)
(EUR thousand) 12 months 2020 12 months 2019
-------------------------------------------------------------------------------
Cash flows from operating activities
-------------------------------------------------------------------------------
Operating profit for the reporting year 3 078 2 722
-------------------------------------------------------------------------------
Adjustments for:
-------------------------------------------------------------------------------
Depreciation and amortisation 3 968 4 070
-------------------------------------------------------------------------------
Gain from change in ownership interest in
subsidiary 0 (31)
-------------------------------------------------------------------------------
(Gain)/loss on sale, write-down and impairment
of property, plant and equipment 986 (4)
-------------------------------------------------------------------------------
Cash flows from operating activities:
-------------------------------------------------------------------------------
Trade and other receivables 3 274 (2 929)
-------------------------------------------------------------------------------
Inventories 375 262
-------------------------------------------------------------------------------
Trade and other payables (1 201) 3 594
-------------------------------------------------------------------------------
Cash generated from operations 10 480 7 684
-------------------------------------------------------------------------------
Income tax paid (263) (270)
-------------------------------------------------------------------------------
Interest paid (903) (740)
-------------------------------------------------------------------------------
Net cash generated from operating activities 9 314 6 675
-------------------------------------------------------------------------------
Cash flows from investing activities
-------------------------------------------------------------------------------
Acquisition of subsidiaries/ associates (less
cash acquired) (342) (6 648)
-------------------------------------------------------------------------------
Purchase and receipts of other investments 16 9
-------------------------------------------------------------------------------
Cash paid-in/ received from equity-accounted
investees (83) (63)
-------------------------------------------------------------------------------
Interest received 2 14
-------------------------------------------------------------------------------
Dividends received 150 0
-------------------------------------------------------------------------------
Purchase of property, plant and equipment and
intangible assets (2 562) (2 775)
-------------------------------------------------------------------------------
Proceeds from sale of property, plant and
equipment and intangible assets 308 19
-------------------------------------------------------------------------------
Loans granted (331) (118)
-------------------------------------------------------------------------------
Loan repayments received 0 303
-------------------------------------------------------------------------------
Net cash used in investing activities (2 841) (9 259)
-------------------------------------------------------------------------------
Cash flows from financing activities
-------------------------------------------------------------------------------
Payment of lease liabilities (949) (978)
-------------------------------------------------------------------------------
Change in overdraft (1 018) (265)
-------------------------------------------------------------------------------
Notes issued 0 5 000
-------------------------------------------------------------------------------
Loans received / Repayments of bank loans (1 884) 1 207
-------------------------------------------------------------------------------
Proceeds from share issuance 600 0
-------------------------------------------------------------------------------
Purchases of treasury shares (600) 0
-------------------------------------------------------------------------------
Net cash used in financing activities (3 851) 4 964
-------------------------------------------------------------------------------
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS 2 621 2 379
-------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of
the year 3 647 1 268
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the year 6 269 3 647
-------------------------------------------------------------------------------
Signe Kukin
Group CFO
AS Ekspress Grupp
Phone: +372 669 8381
E-mail: signe.kukin@egrupp.ee (mailto:signe.kukin@egrupp.ee)
AS Ekspress Grupp is the leading media group in the Baltic States whose key
activities include web media content production, publishing of newspapers and
magazines and provision of printing services in Estonia, Latvia and Lithuania.
The Group also manages the electronic ticket sales platform and ticket sales
sites in Latvia. Ekspress Grupp that launched its operations in 1989 employs
almost 1600 people, owns leading web media portals in the Baltic States and
publishes the most popular daily and weekly newspapers as well as the majority
of the most popular magazines in Estonia.
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