Börsiteade

Pealkiri

AS Ekspress Grupp: Consolidated unaudited interim report for Q3 and 9 months of 2023

Teade

The  revenue of AS Ekspress Grupp for the 3(rd) quarter of 2023 increased by 9%
to  EUR 16.5 million and EBITDA increased  by 8% to EUR 2.4 million. The revenue
for  the first 9 months of 2023 increased  by 15% to EUR 51.8 million and EBITDA
increased  by 18% to EUR 6.0 million  as compared to last  year. The Group's net
profit  for  the  3(rd) quarter  totalled  EUR  0.9 million and for the first 9
months,  EUR 1.2 million,  decreasing by  28% year-over-year without taking into
consideration  one-off expenses. The decrease in net profit is mainly influenced
by  interest rates that  have increased due  to the increase  in Euribor and the
increase  in  depreciation  expenses  resulting  from  the  Group's investments.
Digital  revenue increased by 24% as  compared to the same  period last year and
made  up 83% of the Group's total revenue. The income from digital subscriptions
of   the  Group's  media  companies  and  the  number  of  people  with  digital
subscriptions  grew strongly in  all three countries  during the year. The sales
revenue  from ticket platforms and advertising revenue from outdoor screens have
increased strongly.

The Group's revenue growth for the 3(rd) quarter was strong, increasing by 9% as
compared to the same period last year. Total revenue growth was 15% in the nine-
month  period. Excluding from  revenue the acquisitions  made in Lithuania (news
portal  Lrytas and news agency ELTA) in  the second half of 2022, revenue growth
for  the first 9 months was  also 9%. Digital advertising sales  have been in an
upward trend both in Estonia and Lithuania.

In Latvia, the total market volume decreased, and the advertising revenue earned
by  Ekspress Grupp in Latvia is about 7% lower than last year. This decrease has
been  offset  by  higher  sales  revenue  from  the  ticket platform and digital
screens.  The ticket  platform, which  is part  of the  Group, has increased its
sales  both through the  number of events  on the portal  as well as through the
increase of the average ticket price.

We remain moderately cautious regarding the end of the year, as the higher level
of  interest rates may affect people's consumption and thereby advertising sales
volumes.  Until now, the  advertising market has  behaved rather positively, and
there have been no significant volume reductions by customers.

Over  the past  year, the  Group has  gained nearly  42 000 readers with digital
subscriptions  in the Baltic  States, or 30% more  than at the  end of September
last year, reaching 180 thousand subscriptions. The Group's digital revenue base
is  increasingly  based  on  the  sales  revenue from digital subscriptions. The
ability to increase the average price also contributed to the subscriber revenue
growth.  We have also strengthened the quality  and volume of content offered by
the  Group's  media  companies  to  be  the  leader  in  the  field  of  digital
subscriptions  in all Baltic  States. The Group  is moving towards its strategic
financial  goals and wishes to  offer digital paid content  to at least 340 000
subscribers by 2026.

The  earnings before  interest, tax,  depreciation and  amortisation (EBITDA) of
Ekspress Grupp totalled EUR 2.4 million in the 3(rd) quarter, increasing by 8%.
The  EBITDA for the first 9 months totalled EUR 6.0 million, increasing by 18%.
Profitability  has  been  positively  impacted  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  net profit  for first  9 months of  2023 totalled EUR 1.2 million, which is
28% lower  as compared to  last year. Including  one-off extraordinary expenses,
the  Group earned a profit  of EUR 0.8 million in  the first 9 months. Lower net
profit  is primarily attributable to one-off expenses related to the liquidation
of Express Post and unprofitable operations in the amount of EUR -0.6 million in
the  first  half  of  the  year.  The  home delivery service of Express Post was
terminated  in the first half of the  year, and the one-off liquidation expenses
and  unprofitable operations will no longer be reflected in the Group's upcoming
quarters.  In addition,  the level  of net  profit has  been impacted  by higher
interest  rates due to the increase  in Euribor and higher depreciation expenses
due  to the  Group's investments.  The negative  effect of  interest expenses is
twofold,  impacting the results for the  first 9 months as an additional expense
of  EUR 0.5 million. The net profit for the first 9 months of 2022, which is the
basis  for comparison, also included a one-off extraordinary financial income of
EUR 0.2 million resulting from the purchase price adjustment of the ticket sales
environment.

The  Group's liquidity is solid, and we  consider it important to keep liquidity
reserves  for any potential new acquisitions as well as for a potential economic
cooldown.  As of 30 September 2023, the Group's monetary funds totalled EUR 6.1
million  (31.12.2022: EUR 7.4 million).  Over the 9-month  period, the Group has
repurchased  shares in the total  amount of 1 million and  paid dividends to the
shareholders  in the amount of EUR 1.5 million. Thus, in first 9 months of 2023
the  Group has made payments to the shareholders in the total amount of EUR 2.5
million.



Q3 AND 9 MONTHS RESULTS





REVENUE

In the 3(rd) quarter of 2023, the consolidated revenue totalled EUR 16.5 million
(Q3  2022: EUR 15.1 million). The revenue for the 3(rd) quarter increased by 9%
year-over-year. The consolidated revenue for the first 9 months of 2023 totalled
EUR 51.8 million (9 months 2022: EUR 45.0 million). The revenue for the first 9
months  of the  year increased  by 15% as  compared to  the previous  year. This
growth  was attributable to  both online advertising  revenue as well as digital
subscription  revenue. The share of the Group's digital revenue in total revenue
was  83% in the  first 9 months  of 2023 (9  months 2022: 77% of total revenue).
Digital  revenue for the first 9 months  of 2023 increased by 24% as compared to
the same period last year.

PROFITABILITY

In  the 3(rd) quarter of 2023, the  consolidated EBITDA totalled EUR 2.4 million
(Q3  2022: EUR 2.3 million). EBITDA increased by 8% as compared to last year and
the  EBITDA margin  was 15% (Q3  2022: 15%). In the  first 9 months of 2023, the
consolidated  EBITDA totalled EUR 6.0 million  (9 months 2022: EUR 5.1 million).
EBITDA  increased by 18% as compared to last year and the EBITDA margin was 12%
(9  months  2022: 11%). Profitability  has  been  driven  by successful sales of
online  advertising and digital subscriptions in  Estonia and Lithuania, and the
volume growth or ticket sales platforms and digital outdoor screens.

In  the 3(rd) quarter of 2023, the consolidated net profit totalled 0.95 million
(Q3 2022: EUR 0.86 million). In the first 9 months of 2023, the consolidated net
profit,  excluding extraordinary  expenses, totalled  EUR 1.2 million  (9 months
2022: EUR  1.6 million). In the first 9 months of 2023, the net profit decreased
by  28% as compared to last year.  Including one-off extraordinary expenses, the
net  profit for  the first  9 months of  the year  totalled EUR 0.8 million. The
decrease in net profit is mainly due to higher interest rates resulting from the
increase  in the  Euribor and  higher depreciation  expenses resulting  from the
Group's  investments. The negative  impact of interest  is twofold and manifests
itself  as an additional expense of EUR 0.5 million in the results for the first
9 months  of the year. The results for the  first 9 months of the year were also
impacted  by the one-off costs  in the amount of  EUR 0.3 million related to the
liquidation  of the home delivery  services of AS Express  Post. As of July, the
home  delivery services of  Express Post were  liquidated and the  Group will no
longer incur any additional losses on this business.

In  the first 9 months of 2022, the positive one-off impact on the net profit in
the  amount of EUR 0.2 million was attributable to the profit which arose on the
revaluation of the final payment related to the acquisition of Bi?eshu Parad?ze.

EXPENSES

In  the first 9 months of  2023, the cost of goods  sold, marketing, and general
and  administrative costs  totalled EUR  49.3 million (9  months 2022: EUR 43.3
million).  Operating expenses increased by EUR 6.0 million (+14%) as compared to
the  same period last year. Labour costs  increased the most, by EUR 4.0 million
(+17%).

In the first 9 months of 2023, the Group employed 976 employees on average which
is  104 employees  more  as  compared  to  the  same  period last year (9 months
2022: 872 employees).  This  growth  is  attributable  to  80 employees who were
transferred  from the  acquired companies,  incl. ELTA  news agency in Lithuania
acquired  in  May  2022 and  the  news  portal  lrytas.lt  acquired  in December
2022. 24 employees  were  hired  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 6.1 million and equity  in the amount of  EUR 54.0 million (55% of total
assets).  The comparable data  as of 30 September  2022 were EUR 6.1 million and
EUR  53.0 million (57% of total assets), respectively. As of 30 September 2023,
the  Group's net  debt totalled  EUR 14.3 million  (30 September 2022: EUR 10.5
million).

In  the first 9 months of 2023, the Group's cash flows from operating activities
totalled  EUR 6.9 million (9 months 2022: EUR 3.9 million), that were positively
impacted by the ticket sales platforms in Estonia and Latvia. The sales activity
of  the Latvian ticket sales platform has  recovered and is in a better position
due to higher ticket prices as compared to the pre-Covid-19 period.

In  the first 9 months of 2023, the Group's cash flows from investing activities
totalled  EUR -3.0 million (9 months 2022: EUR  -4.8 million), of which EUR -2.4
million  was  related  to  the  development  and  acquisition  of  tangible  and
intangible   assets,   demonstrating   higher   investments   in   products  and
technologies.  In the first  9 months of the  year, the Group  invested EUR -1.0
million in new LED screens using a finance lease.

In  the first 9 months of 2023, the Group's cash flows from financing activities
totalled  EUR -5.2 million (9 months 2022: EUR  -4.0 million), of which EUR -1.0
million  is the share buy-back  and EUR -1.5 million  is the dividend payment to
the shareholders of AS Ekspress Grupp. The financing activities also include the
net change in borrowings in the amount of EUR -1.3 million and lease liabilities
in the amount of EUR -1.4 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
                   Q3 2023 Q3 2022 Change % 9M 2023 9M 2022 Change % 2022

 Media segment     16 455  14 743  12%      52 088  43 887  19%      62 690

  advertising
 revenue           9 413   8 588   10%      30 219  25 990  16%      37 613

 subscriptions
 (incl. single-
 copy sales)       4 665   4 206   11%      13 884  12 142  14%      16 819

 marketplaces      861     582     48%      2 099   1 410   49%      2 232

 outdoor screens   823     608     35%      2 349   1 647   43%      2 396

 sale of other
 goods and
 services          692     759     -9%      3 538   2 697   31%      3 630

 Corporate
 functions         167     1 161   -86%     2 474   3 343   -26%     4 500

 Inter-segment
 eliminations      (131)   (784)            (2 789) (2 274)          (3 050)

 TOTAL GROUP       16 490  15 120  9%       51 773  44 956  15%      64 141

  incl. revenue
 from all digital
 channels          14 146  12 006  18%      42 942  34 586  24%      49 928

  % of revenue
 from all digital
 channels          86%     79%              83%     77%              78%



 (EUR thousand)    EBITDA

                                                                     12 months
                   Q3 2023 Q3 2022 Change % 9M 2023 9M 2022 Change % 2022

 Media segment     2 852   2 614   9%       6 974   6 007   16%      10 183

 Corporate
 functions         (416)   (311)   -34%     (977)   (802)   -22%     (1 122)

 Inter-segment
 eliminations      3       (39)             (4)     (109)            (171)

 TOTAL GROUP       2 440   2 264   8%       5 992   5 096   18%      8 891



  EBITDA margin   Q3 2023   Q3 2022   9M 2023   9M 2022   12 months 2022

  Media segment   17%       18%       13%       14%       16%

  TOTAL GROUP     15%       15%       12%       11%       14%



Consolidated balance sheet (unaudited)

 (EUR thousand)                                           30.09.2023 31.12.2022
-------------------------------------------------------------------------------
 ASSETS
-------------------------------------------------------------------------------
 Current assets
-------------------------------------------------------------------------------
 Cash and cash equivalents                                     6 132      7 448
-------------------------------------------------------------------------------
 Trade and other receivables                                  11 447     11 661
-------------------------------------------------------------------------------
 Corporate income tax prepayment                                 213         49
-------------------------------------------------------------------------------
 Inventories                                                     282        286
-------------------------------------------------------------------------------
 Total current assets                                         18 075     19 444
-------------------------------------------------------------------------------
 Non-current assets
-------------------------------------------------------------------------------
 Other receivables and investments                             1 580      1 580
-------------------------------------------------------------------------------
 Deferred tax asset                                               75         60
-------------------------------------------------------------------------------
 Investments in joint ventures                                   786      1 017
-------------------------------------------------------------------------------
 Investments in associates                                     2 106      2 279
-------------------------------------------------------------------------------
 Property, plant and equipment                                 8 981      8 736
-------------------------------------------------------------------------------
 Intangible assets                                            67 368     66 720
-------------------------------------------------------------------------------
 Total non-current assets                                     80 896     80 392
-------------------------------------------------------------------------------
 TOTAL ASSETS                                                 98 970     99 836
-------------------------------------------------------------------------------
 LIABILITIES
-------------------------------------------------------------------------------
 Current liabilities
-------------------------------------------------------------------------------
 Borrowings                                                    1 973      3 393
-------------------------------------------------------------------------------
 Trade and other payables                                     19 969     19 004
-------------------------------------------------------------------------------
 Corporate income tax payable                                    132         25
-------------------------------------------------------------------------------
 Total current liabilities                                    22 074     22 422
-------------------------------------------------------------------------------
 Non-current liabilities
-------------------------------------------------------------------------------
 Long-term borrowings                                         22 836     21 948
-------------------------------------------------------------------------------
 Other long-term liabilities                                      41         43
-------------------------------------------------------------------------------
 Total non-current liabilities                                22 878     21 991
-------------------------------------------------------------------------------
 TOTAL LIABILITIES                                            44 952     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                                                      2 283      2 059
-------------------------------------------------------------------------------
 Retained earnings                                            20 037     20 796
-------------------------------------------------------------------------------
 Total capital and reserves attributable to equity
 holders of parent company                                    54 018     55 276
-------------------------------------------------------------------------------
 TOTAL EQUITY                                                 54 018     55 423
-------------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                                 98 970     99 836
-------------------------------------------------------------------------------



Consolidated statement of comprehensive income (unaudited)

 (EUR thousand)               Q3 2023  Q3 2022  9M 2023  9M 2022 12 months 2022
-------------------------------------------------------------------------------
 Sales                         16 490   15 120   51 773   44 956         64 141
-------------------------------------------------------------------------------
 Cost of sales               (12 384) (11 272) (40 131) (34 712)       (48 185)
-------------------------------------------------------------------------------
 Gross profit                   4 107    3 849   11 642   10 243         15 956
-------------------------------------------------------------------------------
 Other income                     167      209      348      526            789
-------------------------------------------------------------------------------
 Marketing expenses             (649)    (695)  (2 011)  (2 133)        (2 979)
-------------------------------------------------------------------------------
 Administrative expenses      (2 253)  (2 125)  (7 180)  (6 442)        (8 823)
-------------------------------------------------------------------------------
 Other expenses                 (122)     (54)    (262)    (139)          (146)
-------------------------------------------------------------------------------
 Operating profit /(loss)       1 250    1 183    2 537    2 056          4 797
-------------------------------------------------------------------------------
 Interest income                   12        9       32       28             36
-------------------------------------------------------------------------------
 Interest expenses              (383)    (183)  (1 059)    (529)          (738)
-------------------------------------------------------------------------------
 Other finance
 income/(costs)                  (14)      (3)     (35)      194            179
-------------------------------------------------------------------------------
 Net finance cost               (384)    (177)  (1 063)    (308)          (523)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of
 joint ventures                    69    (107)    (726)    (327)          (242)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of
 associates                        65       53      196      326            325
-------------------------------------------------------------------------------
 Profit /(loss) before
 income tax                     1 000      953      943    1 747          4 357
-------------------------------------------------------------------------------
 Income tax expense              (52)     (94)    (113)    (129)          (302)
-------------------------------------------------------------------------------
 Net profit /(loss) for the
 reporting period                 949      859      830    1 618          4 055
-------------------------------------------------------------------------------
 Net profit /(loss) for the reporting period
 attributable to
-------------------------------------------------------------------------------
 Equity holders of the
 parent company                   949      857      828    1 617          4 048
-------------------------------------------------------------------------------
 Minority interest                  0        2        2        1              7
-------------------------------------------------------------------------------
 Total comprehensive income
 /(loss)                          949      859      830    1 618          4 055
-------------------------------------------------------------------------------
 Comprehensive income /(loss) for the reporting period attributable to
-------------------------------------------------------------------------------
 Equity holders of the
 parent company                   949      857      828    1 617          4 048
-------------------------------------------------------------------------------
 Minority interest                  0        2        2        1              7
-------------------------------------------------------------------------------
 Earnings per share (euro)
-------------------------------------------------------------------------------
 Basic earnings per share      0.0315   0.0282   0.0275   0.0533         0.1335
-------------------------------------------------------------------------------
 Diluted earnings per share    0.0305   0.0273   0.0267   0.0515         0.1294
-------------------------------------------------------------------------------



Consolidated cash flow statement (unaudited)

                                                                      12 months
 (EUR thousand)                                       9M 2023 9M 2022      2022
-------------------------------------------------------------------------------
 Cash flows from operating activities
-------------------------------------------------------------------------------
 Operating profit /(loss) for the reporting year        2 537   2 056     4 797
-------------------------------------------------------------------------------
 Adjustments for (non-cash):
-------------------------------------------------------------------------------
 Depreciation and amortisation                          3 455   3 039     4 084
-------------------------------------------------------------------------------
 (Gain)/loss on sale, write-down and impairment of
 property, plant and equipment                            165      30        29
-------------------------------------------------------------------------------
 Change in value of share option                           24      27        29
-------------------------------------------------------------------------------
 Cash flows from operating activities:
-------------------------------------------------------------------------------
 Trade and other receivables                              211 (1 168)   (1 939)
-------------------------------------------------------------------------------
 Inventories                                                3    (51)       (9)
-------------------------------------------------------------------------------
 Trade and other payables                               1 518     607     2 188
-------------------------------------------------------------------------------
 Income tax paid                                        (184)   (319)     (401)
-------------------------------------------------------------------------------
 Interest paid                                          (852)   (327)     (767)
-------------------------------------------------------------------------------
 Net cash generated from operating activities           6 876   3 892     8 011
-------------------------------------------------------------------------------
 Cash flows from investing activities
-------------------------------------------------------------------------------
 Acquisition of subsidiaries/ associates (less cash
 acquired) and other investments /
 cash paid-in equity-accounted investees              (1 310) (2 600)   (7 632)
-------------------------------------------------------------------------------
 Receipts of other investments                             13      10        10
-------------------------------------------------------------------------------
 Interest received                                          6       1         2
-------------------------------------------------------------------------------
 Purchase of property, plant and equipment and
 intangible assets                                    (2 405) (2 891)   (3 748)
-------------------------------------------------------------------------------
 Proceeds from sale of property, plant and equipment
 and intangible assets                                     25      60        66
-------------------------------------------------------------------------------
 Loans granted                                              0    (30)      (30)
-------------------------------------------------------------------------------
 Loan repayments received                                   0      86        86
-------------------------------------------------------------------------------
 Dividends received                                       674     601       601
-------------------------------------------------------------------------------
 Net cash used in investing activities                (2 997) (4 763)  (10 645)
-------------------------------------------------------------------------------
 Cash flows from financing activities
-------------------------------------------------------------------------------
 Dividends paid                                       (1 488) (2 425)   (2 425)
-------------------------------------------------------------------------------
 Payment of lease liabilities                         (1 446) (1 305)   (1 751)
-------------------------------------------------------------------------------
 Loans received / Repayments of bank loans            (1 260)   (284)     3 296
-------------------------------------------------------------------------------
 Purchases of treasury shares                         (1 000)       0         0
-------------------------------------------------------------------------------
 Net cash used in financing activities                (5 195) (4 014)     (880)
-------------------------------------------------------------------------------
 NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1 316) (4 885)   (3 514)
-------------------------------------------------------------------------------
 Cash and cash equivalents at the beginning of the
 period                                                 7 448  10 962    10 962
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end of the period     6 132   6 077     7 448
-------------------------------------------------------------------------------



Mari-Liis Rüütsalu
Chairman of the Management Board
+372 512 2591
[email protected] (mailto:[email protected])

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 1100 people.