Market announcement

Title

AS Ekspress Grupp: Consolidated unaudited interim report for the Third Quarter and Nine Months of 2021

Message

In  the 3(rd) quarter  of 2021, the  revenue of  AS Ekspress  Grupp totalled EUR
13.3 million  and the revenue for the first nine months of the year totalled EUR
37.6 million. The Group's net profit for the 3(rd) quarter of 2021 was EUR 1.15
million  and the  net profit  for the  first 9 months  of the year was EUR 1.82
million.  At the end of September, the  share of the Group's digital revenue was
74% of total revenue

In the 3(rd) quarter of 2021, the consolidated revenue totalled EUR 13.3 million
(3(rd) quarter 2020: EUR 10.9 million), increasing by 22%. The revenue growth is
attributable  to  the  online  advertising  market  which  continues  to grow as
compared  to traditional media channels.  The advertising customers have adapted
to the circumstances and the growth of the advertising business in all countries
demonstrates  that the majority of companies  have been able to digitalise their
businesses more; they have opened or adapted their ways of trading to e-channels
and  the need to  advertise has recovered.  However, the revenue  of both ticket
sales  platforms as well as outdoor screens continues to be under pressure which
is  directly attributable to the effects of the COVID-19 pandemic. The effect is
especially  evident  in  the  Latvian  market  where  restrictions are currently
considerably stricter than in other countries.

The number of the digital subscriptions of AS Ekspress Grupp increased by 75% by
the  end of  September 2021 as  compared to  the same  period last  year and was
approximately 122 thousand subscriptions.

The  additional growth in digital subscriptions is primarily attributable to new
customers  and  it  demonstrates  that  more  readers  who  have  not yet become
subscribers  to the Group's products  are being addressed. The  Group is able to
come  up with  topics for  an increasingly  larger number  of customers and thus
those readers who have read articles for free also decide to sign up for digital
subscriptions.   The  Group  has  also  managed  to  keep  its  current  digital
subscribers  for a longer period of time, lowering the share of those cancelling
their subscriptions and increasing the average life of the subscription.

The  earnings before  interest, tax,  depreciation and  amortisation (EBITDA) of
Ekspress  Grupp totalled  EUR 2.25 million  in the  3(rd) quarter and  EUR 5.05
million  in the first  9 months of the  year which is 38% and 62%, respectively,
higher  as  compared  to  the  same  period  in  2020. Strong  sales  of  online
advertising  and digital subscriptions  in all Baltic  States and continued cost
reductions  have  helped  improve  profitability.  The  net profit in the 3(rd)
quarter  totalled EUR 1.15 million  which is 48% higher  than in the same period
last  year. The net profit for the first 9 months of the year totalled EUR 1.82
million  which is six times  higher than in the  same period last year (9 months
2020: EUR 0.29 million).

At  the beginning  of September  2021, the Group  concluded an agreement to sell
Printall  AS. The transaction was completed  on 6 September 2021, as a result of
which  the Group  incurred a  sales loss  in the  amount of  EUR 2.3 million and
according  to the agreement, after the adjustments to the sales price, the Group
received  a net amount of  EUR 6.3 million. At the  beginning of 2026, the Group
will receive another EUR 0.7 million, contingent upon the results of Printall in
2025. As a result of the transaction, the Group will exit the business with high
CAPEX  requirements that is not in line  with the Group's digital revenue growth
strategy.  Availability of new capital will  provide additional capacity for the
Group  to fund the digital area, both  organically as well as through making new
acquisitions. In this report, Ekspress Grupp presents the results for the 3(rd)
quarter  and  9 months  of  the  current  year  as well as comparable periods in
compliance  with the requirements of IFRS set  for interim reports, i.e. for its
continuing  operations. The  loss from  the sale  of Printall  and its operating
results  have been recognised as discontinued operations and are included in the
Group's comprehensive income statement.

As of 30 September 2021, the Group had available cash in the amount of EUR 12.4
million (30 September 2020: EUR 5.8 million). The Group's liquidity continues to
be  good. In order  to strengthen the  Group's liquidity position  and make more
effective use of equity, the Group signed amendments to the loan agreements with
AS  SEB Pank in July 2021. The maturity  dates of loans were extended by 5 years
and  monthly payments were reduced from  EUR 0.2 million to EUR 0.06 million per
month.

Due  to its  strong liquidity  position and  additional available funds from the
sale  of Printall AS, the Management Board  of Ekspress Grupp made a proposition
to  the shareholders on 13 October 2021 to distribute extraordinary dividends of
10 euro  cents per  share in  the total  amount of EUR 3.03 million. Shareholder
resolutions  will be adopted without calling an extraordinary general meeting on
4 November 2021. The shareholders included in the share register of shareholders
on  19 November 2021 will be entitled to receive dividends and dividends will be
distributed on 23 November 2021.

The  Supervisory Board of  AS Ekspress Grupp  has approved the Group's dividends
policy  according to  which Ekspress  Grupp will  distribute at least 30% of its
annual profit as dividends starting from 2022.

Q3 AND 9 MONTHS RESULTS

In  accordance  with  the  decision  of  the  extraordinary  general  meeting of
shareholders  of AS Ekspress  Grupp from 13 July  2021, AS Ekspress Grupp and OÜ
Trükitung  concluded a sales  agreement on 3 September  2021, according to which
Ekspress  Grupp sold its 100% ownership interest  in its subsidiary Printall AS.
The  transaction  was  completed  as  of  6 September  2021. In the consolidated
interim  report for the  3(rd) quarter and the  first 9 months of  the year, the
information  is  presented  about  continuing  operations  where the revenue and
expenses  of  discontinued  operations  are  shown  in  a  separate  line in the
comprehensive  income statement "Gain/-loss from discontinued operations". Until
the  sale, the business of Printall AS used to be recognised a separate printing
services  segment  which  the  Group  will  disclose as a discontinued operation
starting  from this period. In the comprehensive income statement of the interim
report  and  the  segment  overview,  the  comparative information of continuing
operations has been restated. No restatements have been made to the consolidated
balance  sheet and cash flows  in accordance with the  requirements of IFRS. The
assets of the printing services segment continue to be consolidated line-by-line
in the balance sheet as of 31 December 2020, because the sale of Printall AS was
not yet recognised as a discontinued operation as of 31 December 2020.

REVENUE

In   the   3(rd) quarter  of  2021, the  consolidated  revenue  from  continuing
operations  totalled  EUR  13.3 million  (3(rd) quarter 2020: EUR 10.9 million).
Revenue  increased by 22% year-over-year in  the 3(rd) quarter. Both advertising
as well as digital subscription revenue increased. The consolidated revenue from
continuing  operations  for  the  first  nine  months of 2021 totalled EUR 37.6
million  (first nine months of 2020: EUR 31.0 million). At the end of the 3(rd)
quarter  of 2021, the share of the  Group's digital revenue accounted for 74% of
total  revenue (at the end of 3(rd) quarter 2020: 69% of total revenue). Digital
revenue increased by 30% as compared to the same period last year.

PROFITABILITY

In  the 3(rd) quarter of 2021, the  consolidated EBITDA of continuing operations
totalled  EUR 2.25 million (3(rd) quarter 2020: EUR 1.63 million). In the 3(rd)
quarter  of 2021, EBITDA increased  by 38% as compared  to the previous year and
the  EBITDA margin was 17.0% (3(rd) quarter 2020: 14.9%). Strong sales of online
advertising,  digital subscriptions and tight cost controls in all Baltic States
have  helped  to  improve  profitability.  The consolidated EBITDA of continuing
operations  for the first  nine months of  2021 totalled EUR 5.05 million (first
nine months of 2020: EUR 3.12 million) increasing by 62% compared to last year.

In  the  3(rd) quarter  of  2021, the  consolidated  net  profit from continuing
operations  totalled  EUR  1.15 million  (3(rd) quarter 2020: EUR 0.77 million),
which  is EUR 0.37 million and 48% higher  as compared to 2020. The consolidated
net profit from continuing operations for the first nine months of 2021 totalled
EUR  1.82 million (first  nine months  of 2020: EUR  0.29 million), which is EUR
1.53 million and 532% better as compared to 2020.

CASH POSITION

At  the end of the reporting period, the  Group had available cash in the amount
of  EUR 12.4 million and equity in the  amount of EUR 54.4 million (61% of total
assets).  The comparable  data as  of 30 September  2020, including the printing
services  segment,  were  EUR  5.8 million  and  EUR  52.6 million (55% of total
assets),  respectively. As  of 30 September  2021, the Group's  net debt was EUR
6.2 million  (30 September 2020: EUR 16.5 million). As of 30 September 2021, the
cash  position was positively impacted by net cash proceeds from the sale of the
ownership  interest  in  Printall  AS  in  the  amount of EUR 6.3 million (incl.
premature  payment of the outstanding loan balance of Printall AS to AS SEB Pank
under the loan contract in the amount of EUR 2.06 million, see Note 7).

The  cash position  in 2020 was  impacted by  the agreements  concluded with the
banks  due to the COVID-19 related state of emergency. Agreements were concluded
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 last year.

DIVIDENDS AND DIVIDEND POLICY

In  conjunction with the sale  of Printall AS, the  Group's Management Board has
proposed  to the shareholders  to distribute extraordinary  dividends of 10 euro
cents per share in the total amount of EUR 3.03 million. Shareholder resolutions
will   be   adopted   without  calling  the  extraordinary  general  meeting  of
shareholders  on 4 November 2021. The  shareholders included in  the register of
shareholders  on  19 November  2021 will  be  entitled  to receive dividends and
dividends will be distributed on 23 November 2021.

The  Supervisory Board of  AS Ekspress Grupp  has approved the Group's dividends
policy,  according to which Ekspress  Grupp will pay at  least 30% of the annual
profit as dividends starting from 2022.


Key financial indicators for segments (continuing operations)

 (EUR thousand)  Sales

                                                                      12
                                          9 months  9 months          months
                 Q3 2021 Q3 2020 Change % 2021      2020     Change % 2020

 Media segment   12 925  10 750  20%      36 485    30 667   19%      43 728

      incl.
 revenue from
 all digital and
 online channels 10 061  7 812   29%      27 664    21 338   30%      30 963

      % of
 revenue from
 all digital and
 online channels 78%     73%              76%       70%               71%

 Corporate
 functions       999     693     44%      3 106     1 728    80%      2 761

 Inter-segment
 eliminations    (660)   (529)            (2 018)   (1 417)           (1 975)

 TOTAL GROUP     13 265  10 914  22%      37 573    30 978   21%      44 514

      % of
 revenue from
 all digital and
 online channels 76%     72%              74%       69%               70%


 (EUR thousand)  EBITDA

                                                                      12
                                          9 months  9 months          months
                 Q3 2021 Q3 2020 Change % 2021      2020     Change % 2020

 Media segment   2 401   1 729   39%      5 478     3 491    57%      6 601

 Corporate
 functions       (134)   (90)    -49%     (423)     (325)    -30%     (720)

 Inter-segment
 eliminations    (16)    (11)             (3)       (43)              43

 TOTAL GROUP     2 251   1 628   38%      5 051     3 122    62%      5 924


 EBITDA margin Q3 2021 Q3 2020 9 months 2021 9 months 2020 12 months 2020

 Media segment 19%     16%     15%           11%           15%

 TOTAL GROUP   17%     15%     13%           10%           13%


Consolidated balance sheet (unaudited)

 (EUR thousand)                                           30.09.2021 31.12.2020
-------------------------------------------------------------------------------
 ASSETS
-------------------------------------------------------------------------------
 Current assets
-------------------------------------------------------------------------------
 Cash and cash equivalents                                    12 364      6 269
-------------------------------------------------------------------------------
 Trade and other receivables                                   8 858      9 450
-------------------------------------------------------------------------------
 Corporate income tax prepayment                                 209          7
-------------------------------------------------------------------------------
 Inventories                                                     312      2 756
-------------------------------------------------------------------------------
 Total current assets                                         21 743     18 482
-------------------------------------------------------------------------------
 Non-current assets
-------------------------------------------------------------------------------
 Other receivables and investments                             1 662        982
-------------------------------------------------------------------------------
 Deferred tax asset                                               30         30
-------------------------------------------------------------------------------
 Investments in joint ventures                                 1 007      1 661
-------------------------------------------------------------------------------
 Investments in associates                                     2 094      2 253
-------------------------------------------------------------------------------
 Property, plant and equipment                                 6 191     14 134
-------------------------------------------------------------------------------
 Intangible assets                                            56 702     56 635
-------------------------------------------------------------------------------
 Total non-current assets                                     67 687     75 696
-------------------------------------------------------------------------------
 TOTAL ASSETS                                                 89 430     94 177
-------------------------------------------------------------------------------
 LIABILITIES
-------------------------------------------------------------------------------
 Current liabilities
-------------------------------------------------------------------------------
 Borrowings                                                    1 671      3 613
-------------------------------------------------------------------------------
 Trade and other payables                                     14 385     15 251
-------------------------------------------------------------------------------
 Corporate income tax payable                                    130         81
-------------------------------------------------------------------------------
 Total current liabilities                                    16 187     18 945
-------------------------------------------------------------------------------
 Non-current liabilities
-------------------------------------------------------------------------------
 Long-term borrowings                                         16 846     18 589
-------------------------------------------------------------------------------
 Other long-term liabilities                                   2 046      2 025
-------------------------------------------------------------------------------
 Total non-current liabilities                                18 892     20 613
-------------------------------------------------------------------------------
 TOTAL LIABILITIES                                            35 079     39 558
-------------------------------------------------------------------------------
 EQUITY
-------------------------------------------------------------------------------
 Minority interest                                               130        126
-------------------------------------------------------------------------------
 Capital and reserves attributable to equity holders of
 parent company:
-------------------------------------------------------------------------------
 Share capital                                                18 478     18 478
-------------------------------------------------------------------------------
 Share premium                                                14 277     14 277
-------------------------------------------------------------------------------
 Treasury shares                                               (384)      (209)
-------------------------------------------------------------------------------
 Reserves                                                      1 911      1 758
-------------------------------------------------------------------------------
 Retained earnings                                            19 939     20 189
-------------------------------------------------------------------------------
 Total capital and reserves attributable to equity
 holders of parent company                                    54 221     54 493
-------------------------------------------------------------------------------
 TOTAL EQUITY                                                 54 351     54 619
-------------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                                 89 430     94 177
-------------------------------------------------------------------------------


Consolidated statement of comprehensive income (unaudited)

                                                         9 months    12 months
 (EUR thousand)        Q3 2021 Q3 2020 9 months 2021         2020          2020
-------------------------------------------------------------------------------
 Continuing operations
-------------------------------------------------------------------------------
 Sales                  13 265  10 914        37 573       30 978        44 514
-------------------------------------------------------------------------------
 Cost of sales         (9 849) (8 482)      (28 543)     (24 874)      (34 013)
-------------------------------------------------------------------------------
 Gross profit            3 415   2 432         9 030        6 105        10 501
-------------------------------------------------------------------------------
 Other income              291     521           609        1 036         1 691
-------------------------------------------------------------------------------
 Marketing expenses      (494)   (478)       (1 593)      (1 376)       (1 905)
-------------------------------------------------------------------------------
 Administrative
 expenses              (1 799) (1 529)       (5 422)      (4 718)       (6 930)
-------------------------------------------------------------------------------
 Other expenses           (13)    (20)          (62)         (88)         (286)
-------------------------------------------------------------------------------
 Operating profit
 /(loss)                 1 401     925         2 563          959         3 071
-------------------------------------------------------------------------------
 Interest income             9       7            25           19            28
-------------------------------------------------------------------------------
 Interest expenses       (175)   (182)         (537)        (672)         (860)
-------------------------------------------------------------------------------
 Other finance
 income/(costs)           (67)    (28)          (62)         (46)           634
-------------------------------------------------------------------------------
 Net finance cost        (233)   (204)         (574)        (699)         (198)
-------------------------------------------------------------------------------
 Profit/(loss) on
 shares of joint
 ventures                   42      99         (128)          107           102
-------------------------------------------------------------------------------
 Profit/(loss) on
 shares of associates       16    (48)            83         (75)         (129)
-------------------------------------------------------------------------------
 Profit /(loss) before
 income tax              1 226     773         1 944          292         2 846
-------------------------------------------------------------------------------
 Income tax expense       (81)     (1)         (120)          (3)         (280)
-------------------------------------------------------------------------------
 Net profit from
 continuing operations   1 145     772         1 823          289         2 566
-------------------------------------------------------------------------------
 Net profit /(loss)
 from discontinued
 operation             (2 230)     310       (1 926)          633          (30)
-------------------------------------------------------------------------------
 Net profit /(loss)
 for the reporting
 period                (1 085)   1 081         (103)          921         2 536
-------------------------------------------------------------------------------
 Net profit /(loss) for the reporting
 period attributable to
-------------------------------------------------------------------------------
 Equity holders of the
 parent company        (1 087)   1 074         (107)          906         2 510
-------------------------------------------------------------------------------
 Minority interest           2       7             4           15            26
-------------------------------------------------------------------------------
 Total comprehensive
 income /(loss)        (1 085)   1 081         (103)          921         2 536
-------------------------------------------------------------------------------
 Comprehensive income /(loss) for the reporting
 period attributable to
-------------------------------------------------------------------------------
 Equity holders of the
 parent company        (1 087)   1 074         (107)          906         2 510
-------------------------------------------------------------------------------
 Minority interest           2       7             4           15            26
-------------------------------------------------------------------------------
 Earnings per share
 (euro) - continuing
 operations
-------------------------------------------------------------------------------
 Basic earnings per
 share                    0.04    0.03          0.06         0.01          0.09
-------------------------------------------------------------------------------
 Diluted earnings per
 share                    0.04    0.02          0.06         0.01          0.08
-------------------------------------------------------------------------------
 Earnings per share
 (euro)
-------------------------------------------------------------------------------
 Basic earnings per
 share                  (0.04)    0.04          0.00         0.03          0.08
-------------------------------------------------------------------------------
 Diluted earnings per
 share                  (0.03)    0.03          0.00         0.03          0.08
-------------------------------------------------------------------------------


Consolidated cash flow statement (unaudited)

 (EUR thousand)                      9 months 2021 9 months 2020 12 months 2020
-------------------------------------------------------------------------------
 Cash flows from operating
 activities
-------------------------------------------------------------------------------
 Operating profit for the reporting
 year                                          709         1 593          3 078
-------------------------------------------------------------------------------
 Adjustments for (non-cash):
-------------------------------------------------------------------------------
 Depreciation and amortisation               3 349         2 974          3 968
-------------------------------------------------------------------------------
 (Gain)/loss on sale, write-down and
 impairment of property, plant and
 equipment                                      35           (1)            986
-------------------------------------------------------------------------------
 Change in value of share option                27             0              0
-------------------------------------------------------------------------------
 Loss on sale of discontinued
 operation                                   2 077             0              0
-------------------------------------------------------------------------------
 Cash flows from operating
 activities:
-------------------------------------------------------------------------------
 Trade and other receivables               (1 370)         1 880          3 274
-------------------------------------------------------------------------------
 Inventories                                  (79)           214            375
-------------------------------------------------------------------------------
 Trade and other payables                      337           327        (1 201)
-------------------------------------------------------------------------------
 Cash generated from operations              5 086         6 987         10 480
-------------------------------------------------------------------------------
 Income tax paid                             (272)          (91)          (263)
-------------------------------------------------------------------------------
 Interest paid                               (405)         (453)          (903)
-------------------------------------------------------------------------------
 Net cash generated from operating
 activities                                  4 409         6 443          9 314
-------------------------------------------------------------------------------
 Cash flows from investing
 activities
-------------------------------------------------------------------------------
 Acquisition of subsidiaries/
 associates (less cash acquired) and
 other investments /
 cash paid-in equity-accounted
 investees                                   (201)         (203)          (425)
-------------------------------------------------------------------------------
 Disposal of discontinued operation,
 net of cash disposed of                     6 326             0              0
-------------------------------------------------------------------------------
 Receipts of other investments                  51            84             16
-------------------------------------------------------------------------------
 Interest received                               3             1              2
-------------------------------------------------------------------------------
 Purchase of property, plant and
 equipment
 and intangible assets                     (1 901)       (1 623)        (2 562)
-------------------------------------------------------------------------------
 Proceeds from sale of property,
 plant and equipment
 and intangible assets                           3            29            308
-------------------------------------------------------------------------------
 Loans granted                               (130)         (187)          (331)
-------------------------------------------------------------------------------
 Dividends received                            828           150            150
-------------------------------------------------------------------------------
 Net cash used in investing
 activities                                  4 978       (1 750)        (2 841)
-------------------------------------------------------------------------------
 Cash flows from financing
 activities
-------------------------------------------------------------------------------
 Payment of lease liabilities              (1 389)         (693)          (949)
-------------------------------------------------------------------------------
 Change in overdraft                             0       (1 018)        (1 018)
-------------------------------------------------------------------------------
 Loans received / Repayments of bank
 loans                                     (1 455)         (868)        (1 884)
-------------------------------------------------------------------------------
 Proceeds from share issuance                    0             0            600
-------------------------------------------------------------------------------
 Purchases of treasury shares                (446)             0          (600)
-------------------------------------------------------------------------------
 Net cash used in financing
 activities                                (3 290)       (2 579)        (3 851)
-------------------------------------------------------------------------------
 NET (DECREASE)/INCREASE IN CASH AND
 CASH EQUIVALENTS                            6 096         2 114          2 621
-------------------------------------------------------------------------------
 Cash and cash equivalents at the
 beginning of the period                     6 269         3 647          3 647
-------------------------------------------------------------------------------
 Cash and cash equivalents at the
 end of the period                          12 364         5 760          6 269
-------------------------------------------------------------------------------


Signe Kukin
Group CFO
AS Ekspress Grupp
Telephone: +372 669 8381

E-mail address: [email protected] (mailto:[email protected])


AS Ekspress Grupp is the leading Baltic media group whose key activities include
web  media content production, publishing of newspapers and magazines. The Group
also  manages the  electronic ticket  sales platform  and ticket  sales sites in
Latvia  and Estonia. Ekspress Grupp that launched its operations in 1989 employs
almost  1400 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.