Market announcement

Title

AS Ekspress Grupp: Consolidated unaudited interim report for Q4 and 12 months of 2023

Message

In the 4(th) quarter of 2023, the revenue of AS Ekspress Grupp increased by 11%
to EUR 21.3 million and EBITDA also increased by 11% to EUR 4.2 million. The
revenue for the 12-month period increased by 14% year-over-year to EUR 73.1
million and EBITDA increased by 15% to EUR 10.2 million. The Group's net profit
for the 4(th) quarter totalled EUR 2.5 million and for the 12 months, it
totalled EUR 3.7 million. Excluding one-off expenses, it decreased by 9% as
compared to the same period last year. The decline in net profit was primarily
impacted by higher interest rates related to the increase of Euribor and higher
depreciation charges arising from the Group's investments. Digital revenue
increased by 21% as compared to the same period last year and made up 83% of the
Group's total revenue. The digital subscription revenue of the Group's media
companies and the number of people with digital subscriptions increased strongly
in all three countries. The revenue of ticket platforms and the advertising
revenue of outdoor screens have demonstrated strong growth.

The  Group's revenue for  the 4(th) quarter showed  strong growth, increasing by
11% as  compared to the same  period last year. Over  the 12-month period, total
revenue  increased by 14%. If  to exclude from  revenue the acquisitions made in
Lithuania  the 2(nd) half of 2022 (news portal Lrytas and news agency ELTA), the
12-month  revenue growth  was 9%. Against  the backdrop  of the general economic
slowdown, digital revenue growth has been in an upward trend both in Estonia and
Lithuania,  and in summary, the growth  of total sales revenue is differentiated
across all main business segments.

In  Latvia, the  total market  volume decreased  and the  advertising revenue of
Ekspress  Grupp earned in Latvia was 6% lower  than last year. This decrease has
been  offset by the revenue  growth of the ticket  platform and digital screens.
The  Group's  ticket  platform  has  increased  sales both through the number of
events  in the  portal as  well as  the growth  in the average ticket price. For
example,  both the number of tickets sold as well as revenue were boosted by the
successful ticket sales of the jubilee song festival held in Riga.

Over the last year, the Group has gained almost 61 000 new digital subscriptions
in  the Baltic States, i.e.  41% more as compared to  the end of December 2022,
reaching 207 000 subscriptions. The Group's digital revenue is increasingly more
based  on  digital  subscription  revenue,  and  an  even more extensive monthly
recurring  revenue base is  being created without  the need for additional sales
activity  (costs).  The  average  price,  which  was  higher  than  before, also
contributed positively to subscription revenue growth. We have also improved the
quality and volume of the content provided by the Group's media companies, to be
the leader in the field of digital subscriptions in all Baltic States.

On the Estonian market, the number of digital subscriptions of the largest media
company,  Delfi Meedia,  increased by  20% and surpassed  the 100 000-subscriber
threshold  for the first time in December. If to compare it to the population of
Estonia, Delfi has most likely become one of the most successful media companies
both  in Europe and  in the world  with its share  of digital subscriptions. The
Group is moving step by step closer to its strategic goals and wishes to provide
paid digital content to at least 340 000 subscribers by the year 2026.

The  earnings before  interest, tax,  depreciation and  amortisation (EBITDA) of
Ekspress  Grupp  totalled  EUR  4.2 million  in the 4(th) quarter, increasing by
11%. The  12-month EBITDA was EUR 10.2 million, increasing by 15%. Profitability
has  primarily been driven by successful sales of online advertising and digital
subscriptions  in Estonia and Lithuania  as well as the  volume growth of ticket
sales platforms and digital outdoor screens.

The  net profit  for the  12 months of  2023 totalled EUR 3.7 million, being 9%
lower  as compared to  last year. Including  one-off extraordinary expenses, the
Group earned a profit of EUR 3.4 million in the 12-month period. The decrease in
net  profit was impacted by  the one-off expenses related  to the liquidation of
the  home delivery service of AS Express  Post in the amount of EUR 0.3 million.
From  July 2023, the home delivery service of Express Post has been discontinued
and  the Group  will no  longer incur  an additional  loss from this area in the
upcoming  periods. In  addition, the  level of  net profit  has been affected by
higher interest rates related to the increase in Euribor and higher depreciation
charges  related to  the Group's  investments. The  negative impact  of interest
costs is twofold and impacts the 12-month results as an additional charge of EUR
0.8 million.  The comparative base of 2022 is  also higher due to the adjustment
of  the fair value of  the unpaid future commitment  related to the ticket sales
platform that had been recognised as one-off finance income.

The  Group's liquidity is strong, and we consider it important to keep liquidity
reserves for both new potential acquisitions as well as an economic downturn. As
of  31 December 2023, the  Group had  monetary funds  in the  amount of EUR 9.6
million  (31.12.2022: EUR 7.4 million). Over the  12-month period, the Group has
bought  back EUR 1 million shares  and paid EUR 1.5 million  of dividends to its
shareholders.  Thus,  over  the  12-month  period  of  2023, the  Group has made
payments  to  the  shareholders  in  the  total  amount  of EUR 2.5 million. The
Management  Board will make a proposal regarding the dividends to be paid out of
the  profit for 2023 along with the notice  to call an ordinary general meeting,
proceeding  from the previously approved dividend policy. The Group will pay out
at least 30% of the last year's net profit as dividends under the condition that
there  will be  sufficient monetary  funds available  to fund key operations and
make new strategic investments.


Q4 AND 12 MONTHS RESULTS

REVENUE

In the 4(th) quarter of 2023, the consolidated revenue totalled EUR 21.3 million
(Q4 2022: EUR 19.2 million). The revenue for the 4(th) quarter increased by 11%
year-over-year.  The consolidated revenue for the 12 months of 2023 totalled EUR
73.1 million  (12 months 2022: EUR  64.1 million). The revenue  for the 12-month
period   increased  by  14% year-over-year.  If  to  exclude  from  revenue  the
acquisitions made in the Lithuania in the 2(nd) half of 2022 (news portal Lrytas
and  news agency ELTA), the 12-month  revenue growth was 9%. Digital advertising
sales  have been in an  upward trend both in  Estonia and Lithuania. This growth
has  been driven by online advertising revenue and digital subscription revenue.
The  share of the Group's digital revenue in total revenue was 83% at the end of
the 4(th) quarter of 2023 (at the end of Q4 2022: 78% of total revenue). Digital
revenue  for  the  12 months  of  2023 increased  by 21% as compared to the same
period last year.

PROFITABILITY

In  the 4(th) quarter of 2023, the  consolidated EBITDA totalled EUR 4.2 million
(Q4 2022: EUR 3.8 million). EBITDA increased by 11% as compared to last year and
the  EBITDA margin was  20% (Q4 2022: 20%). The consolidated  EBITDA for the 12
months  of  2023 totalled  EUR  10.2 million  (12 months 2022: EUR 8.9 million).
EBITDA  increased by 15% as compared to the  previous year and the EBITDA margin
was  14% (12  months  2022: 14%). Profitability  has  been boosted by successful
sales  of online advertising and digital subscriptions in Estonia and Lithuania,
and the volume growth of ticket sales platforms and digital outdoor screens.

The  consolidated net  profit for  the 4(th) quarter  of 2023 totalled  EUR 2.5
million  (Q4 2022: EUR  2.4 million). The  consolidated net  profit for  the 12
months  of 2023, excluding one-off expenses, totalled EUR 3.7 million (12 months
2022: EUR  4.1 million). The consolidated net profit  for the 12 months of 2023
decreased  by  9% as  compared  to  last  year.  Including one-off expenses, the
consolidated  net profit for the 12 months of 2023 totalled EUR 3.4 million. The
decrease in net profit is primarily impacted by higher interest rates related to
the  increase in Euribor and higher  depreciation charges related to the Group's
investments.  The negative impact  of interest costs  is twofold and impacts the
12-month  results  as  an  additional  charge  of  EUR 0.8 million. The 12-month
results  were impacted by the one-off expenses related to the liquidation of the
home  delivery service of AS Express Post in the amount of EUR 0.3 million. From
July  2023, the home delivery service of  Express Post has been discontinued and
the Group will no longer incur an additional loss from this area in the upcoming
periods.

The  comparative base of 2022 is also higher due to the adjustment of fair value
of  the unpaid  future commitment  related to  the ticket  sales platform in the
amount of EUR 0.2 million that had been recognised as one-off finance income.

EXPENSES

In  the 12 months of  2023, the cost of  goods sold, marketing,  and general and
administrative  costs  totalled  EUR  67.4 million  (12  months  2022: EUR 60.0
million).  Operating expenses increased by EUR 7.4 million (+12%) as compared to
the  same  period  last  year.  Staff  costs  in  the  amount of EUR 5.0 million
increased the most (+16%).

In  the 12-month  period of  2023, the Group  employed 976 employees  on average
which  is 92 more as compared to the same period last year (12 months 2022: 884
employees).  This growth  is attributable  to 72 employees  who were transferred
from the companies acquired, incl. ELTA news agency acquired in Lithuania in May
2022 and  the news portal lrytas.lt acquired in December 2022. An additional 20
employees   were  transferred  from  other  companies  in  Estonia,  Latvia  and
Lithuania.

CASH POSITION

At  the end of the reporting period, the  Group had available cash in the amount
of  EUR 9.6 million and equity  in the amount of  EUR 56.5 million (53% of total
assets). The comparable data as of 31 December 2022 were EUR 7.4 million and EUR
55.4 million  (56% of total  assets), respectively. As  of 31 December 2023, the
Group's net debt was EUR 10.6 million (31 December 2022: EUR 13.3 million).

In  the  12 months  of  2023, the  Group's  cash flows from operating activities
totalled EUR 12.2 million (12 months 2022: EUR 8.0 million) that were positively
impacted  by the ticket  sales platforms in  Estonia and Latvia.  The key effect
came  from Latvia  where ticket  sales volumes  are increasing, despite a weaker
economic environment.

In  the  12 months  of  2023, the  Group's  cash flows from investing activities
totalled EUR -3.9 million (12 months 2022: EUR -10.6 million), of which EUR -3.4
million  was  related  to  development  and  acquisition  of property, plant and
equipment  and intangible assets, indicating  higher investments in products and
technologies.  In the 12 months of the year, the Group invested EUR -1.2 million
in new LED screens, funded with a finance lease.

In  the  12 months  of  2023, the  Group's  cash flows from financing activities
totalled  EUR -6.2 million (12 months 2022: EUR -0.9 million), of which EUR -1.0
million  was the share buy-back and EUR -1.5 million was the dividend payment to
the  shareholders of AS Ekspress Grupp.  Financing activities also include a net
change  in borrowings in the amount of EUR -1.7 million and lease liabilities in
the amount of EUR -2.0 million.

SHARE BUY-BACK AND DIVIDENDS

Within  the  framework  of  the  share  buy-back  programme,  on 9 March 2023 AS
Ekspress  Grupp purchased 588 235 shares  at the price  of EUR 1.70 per share in
the total amount of EUR 1.0 million.

At  the regular general meeting of shareholders  of AS Ekspress Grupp held on 4
May  2023, it was  decided to  pay a  dividend of  5 euro cents per share in the
total  amount of EUR 1.49 million. Dividends were paid to shareholders on 24 May
2023.


SEGMENT OVERVIEW

Key financial indicators for segments

 (EUR thousand)      Sales

                                              12 months    12 months
                     Q4 2023 Q4 2022 Change % 2023         2022        Change %

 Media segment       21 276  18 803  13%      73 365       62 690      17%

  advertising
 revenue             11 856  11 623  2%       42 074       37 613      12%

 subscriptions
 (incl. single-copy
 sales)              5 132   4 677   10%      19 016       16 819      13%

 marketplaces        1 335   822     62%      3 434        2 232       54%

 outdoor screens     1 181   749     58%      3 530        2 396       47%

 sale of other goods
 and services        1 773   933     90%      5 311        3 630       46%

 Corporate functions 167     1 157   -86%     2 642        4 500       -41%

 Inter-segment
 eliminations        (131)   (776)            (2 920)      (3 050)

 TOTAL GROUP         21 313  19 185  11%      73 086       64 141      14%

  incl. revenue from
 all digital
 channels            17 518  15 342  14%      60 460       49 928      21%

  % of revenue from
 all digital
 channels            82%     80%              83%          78%


 (EUR thousand)     EBITDA

                                             12 months    12 months
                    Q4 2023 Q4 2022 Change % 2023         2022         Change %

 Media segment      4 721   4 175   13%      11 695       10 183       15%

 Corporate
 functions          (500)   (319)   -57%     (1 477)      (1 122)      -32%

 Inter-segment
 eliminations       3       (61)             (1)          (171)

 TOTAL GROUP        4 225   3 795   11%      10 217       8 891        15%


  EBITDA margin   Q4 2023   Q4 2022   12 months 2023   12 months 2022

  Media segment   22%       22%       16%              16%

  TOTAL GROUP     20%       20%       14%              14%


Consolidated statement of financial position (unaudited)

 (EUR thousand)                                           31.12.2023 31.12.2022
-------------------------------------------------------------------------------
 ASSETS
-------------------------------------------------------------------------------
 Current assets
-------------------------------------------------------------------------------
 Cash and cash equivalents                                     9 606      7 448
-------------------------------------------------------------------------------
 Trade and other receivables                                  13 143     11 661
-------------------------------------------------------------------------------
 Corporate income tax prepayment                                  24         49
-------------------------------------------------------------------------------
 Inventories                                                     321        286
-------------------------------------------------------------------------------
 Total current assets                                         23 094     19 444
-------------------------------------------------------------------------------
 Non-current assets
-------------------------------------------------------------------------------
 Other receivables and investments                             1 628      1 580
-------------------------------------------------------------------------------
 Deferred tax asset                                              130         60
-------------------------------------------------------------------------------
 Investments in joint ventures                                   851      1 017
-------------------------------------------------------------------------------
 Investments in associates                                     2 197      2 279
-------------------------------------------------------------------------------
 Property, plant and equipment                                10 384      8 736
-------------------------------------------------------------------------------
 Intangible assets                                            67 482     66 720
-------------------------------------------------------------------------------
 Total non-current assets                                     82 672     80 392
-------------------------------------------------------------------------------
 TOTAL ASSETS                                                105 766     99 836
-------------------------------------------------------------------------------
 LIABILITIES
-------------------------------------------------------------------------------
 Current liabilities
-------------------------------------------------------------------------------
 Borrowings                                                    4 353      3 393
-------------------------------------------------------------------------------
 Trade and other payables                                     23 046     19 004
-------------------------------------------------------------------------------
 Corporate income tax payable                                     39         25
-------------------------------------------------------------------------------
 Total current liabilities                                    27 438     22 422
-------------------------------------------------------------------------------
 Non-current liabilities
-------------------------------------------------------------------------------
 Long-term borrowings                                         21 765     21 948
-------------------------------------------------------------------------------
 Other long-term liabilities                                      22         43
-------------------------------------------------------------------------------
 Total non-current liabilities                                21 787     21 991
-------------------------------------------------------------------------------
 TOTAL LIABILITIES                                            49 225     44 413
-------------------------------------------------------------------------------
 EQUITY
-------------------------------------------------------------------------------
 Minority interest                                                 0        147
-------------------------------------------------------------------------------
 Capital and reserves attributable to equity holders of
 parent company:
-------------------------------------------------------------------------------
 Share capital                                                18 478     18 478
-------------------------------------------------------------------------------
 Share premium                                                14 277     14 277
-------------------------------------------------------------------------------
 Treasury shares                                             (1 057)      (334)
-------------------------------------------------------------------------------
 Reserves                                                      2 285      2 059
-------------------------------------------------------------------------------
 Retained earnings                                            22 558     20 796
-------------------------------------------------------------------------------
 Total capital and reserves attributable to equity
 holders of parent company                                    56 541     55 276
-------------------------------------------------------------------------------
 TOTAL EQUITY                                                 56 541     55 423
-------------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                                105 766     99 836
-------------------------------------------------------------------------------


Consolidated statement of comprehensive income (unaudited)

 (EUR thousand)                  Q4 2023  Q4 2022 12 months 2023 12 months 2022
-------------------------------------------------------------------------------
 Sales                            21 313   19 185         73 086         64 141
-------------------------------------------------------------------------------
 Cost of sales                  (14 915) (13 473)       (55 046)       (48 185)
-------------------------------------------------------------------------------
 Gross profit                      6 398    5 712         18 040         15 956
-------------------------------------------------------------------------------
 Other income                        234      263            581            789
-------------------------------------------------------------------------------
 Marketing expenses                (792)    (847)        (2 803)        (2 979)
-------------------------------------------------------------------------------
 Administrative expenses         (2 402)  (2 381)        (9 582)        (8 823)
-------------------------------------------------------------------------------
 Other expenses                    (475)      (7)          (737)          (146)
-------------------------------------------------------------------------------
 Operating profit /(loss)          2 962    2 740          5 499          4 797
-------------------------------------------------------------------------------
 Interest income                      29        9             60             36
-------------------------------------------------------------------------------
 Interest expenses                 (439)    (208)        (1 499)          (738)
-------------------------------------------------------------------------------
 Other finance income/(costs)       (20)     (14)           (55)            179
-------------------------------------------------------------------------------
 Net finance cost                  (431)    (214)        (1 494)          (523)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of
 joint ventures                       65       85          (661)          (242)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of
 associates                           44      (1)            239            325
-------------------------------------------------------------------------------
 Profit /(loss) before income
 tax                               2 640    2 610          3 583          4 357
-------------------------------------------------------------------------------
 Income tax expense                (119)    (173)          (232)          (302)
-------------------------------------------------------------------------------
 Net profit /(loss) for the
 reporting period                  2 521    2 438          3 351          4 055
-------------------------------------------------------------------------------
 Net profit /(loss) for the reporting period attributable to
-------------------------------------------------------------------------------
 Equity holders of the parent
 company                           2 522    2 431          3 349          4 048
-------------------------------------------------------------------------------
 Minority interest                     0        7              2              7
-------------------------------------------------------------------------------
 Total comprehensive income
 /(loss)                           2 521    2 438          3 351          4 055
-------------------------------------------------------------------------------
 Comprehensive income /(loss) for the reporting period attributable to
-------------------------------------------------------------------------------
 Equity holders of the parent
 company                           2 522    2 431          3 349          4 048
-------------------------------------------------------------------------------
 Minority interest                     0        7              2              7
-------------------------------------------------------------------------------
 Earnings per share (euro)
-------------------------------------------------------------------------------
 Basic earnings per share         0.0837   0.0801         0.1113         0.1335
-------------------------------------------------------------------------------
 Diluted earnings per share       0.0813   0.0776         0.1081         0.1294
-------------------------------------------------------------------------------


Consolidated cash flow statement (unaudited)

 (EUR thousand)                                   12 months 2023 12 months 2022
-------------------------------------------------------------------------------
 Cash flows from operating activities
-------------------------------------------------------------------------------
 Operating profit /(loss) for the reporting year           5 499          4 797
-------------------------------------------------------------------------------
 Adjustments for (non-cash):
-------------------------------------------------------------------------------
 Depreciation and amortisation                             4 719          4 084
-------------------------------------------------------------------------------
 (Gain)/loss on sale, write-down and impairment
 of property, plant and equipment                            387             29
-------------------------------------------------------------------------------
 Change in value of share option                              26             29
-------------------------------------------------------------------------------
 Cash flows from operating activities:
-------------------------------------------------------------------------------
 Trade and other receivables                             (1 539)        (1 939)
-------------------------------------------------------------------------------
 Inventories                                                (35)            (9)
-------------------------------------------------------------------------------
 Trade and other payables                                  4 921          2 188
-------------------------------------------------------------------------------
 Income tax paid                                           (263)          (401)
-------------------------------------------------------------------------------
 Interest paid                                           (1 476)          (767)
-------------------------------------------------------------------------------
 Net cash generated from operating activities             12 239          8 011
-------------------------------------------------------------------------------
 Cash flows from investing activities
-------------------------------------------------------------------------------
 Acquisition of subsidiaries/ associates (less
 cash acquired) and other investments /
 cash paid-in equity-accounted investees                 (1 469)        (7 632)
-------------------------------------------------------------------------------
 Receipts of other investments                                13             10
-------------------------------------------------------------------------------
 Interest received                                            28              2
-------------------------------------------------------------------------------
 Purchase of property, plant and equipment and
 intangible assets                                       (3 391)        (3 748)
-------------------------------------------------------------------------------
 Proceeds from sale of property, plant and
 equipment and intangible assets                             275             66
-------------------------------------------------------------------------------
 Loans granted                                                 0           (30)
-------------------------------------------------------------------------------
 Loan repayments received                                      8             86
-------------------------------------------------------------------------------
 Dividends received                                          674            601
-------------------------------------------------------------------------------
 Net cash used in investing activities                   (3 862)       (10 645)
-------------------------------------------------------------------------------
 Cash flows from financing activities
-------------------------------------------------------------------------------
 Dividends paid                                          (1 488)        (2 425)
-------------------------------------------------------------------------------
 Payment of lease liabilities                            (2 004)        (1 751)
-------------------------------------------------------------------------------
 Loans received / Repayments of bank loans               (1 727)          3 296
-------------------------------------------------------------------------------
 Purchases of treasury shares                            (1 000)              0
-------------------------------------------------------------------------------
 Net cash used in financing activities                   (6 219)          (880)
-------------------------------------------------------------------------------
 NET (DECREASE)/INCREASE IN CASH AND CASH
 EQUIVALENTS                                               2 158        (3 514)
-------------------------------------------------------------------------------
 Cash and cash equivalents at the beginning of
 the period                                                7 448         10 962
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end of the
 period                                                    9 606          7 448
-------------------------------------------------------------------------------


Argo Rannamets
CFO
AS Ekspress Grupp
Email: argo.rannamets@egrupp.ee (mailto:argo.rannamets@egrupp.ee)


AS Ekspress Grupp is the leading Baltic media group whose key activities include
web media content production, and publishing of newspapers, magazines and books.
The Group also operates an electronic ticket sales platform and ticket sales
offices and offers outdoor screen service in Estonia and Latvia. Ekspress Grupp
launched its operations in 1989 and employs almost 1,100 people