Börsiteade

Pealkiri

AS Ekspress Grupp: Consolidated Interim Report for the fourth quarter and 12-months of 2015

Teade

Tallinn, Estonia, 2016-02-29 15:12 CET (GLOBE NEWSWIRE) --


In the final quarter of 2015, the Group increased revenue by 2% as compared to
the same period last year, amounting to more than EUR 17 million, and earned
EUR 2.7 million in EBITDA, a decrease of 1% year on year. Compared to latest
forecast presented in the third quarter report, the actual consolidated sales
revenue remained 1.6% behind but EBITDA was 12% better. Media segment exceeded
its latest sales forecast by 2.3% and EBITDA by 38% while printing services
expected quicker recovery and thus remained 6% behind sales expectations and
15% in EBITDA expectations. In the 4th quarter, the consolidated net profit
before any impairment losses increased almost by 3% compared to previous year
and amounted to EUR 1.7 million. 

The Group’s consolidated revenue for full year remained at last year’s level,
EBITDA decreased by 11% to EUR 7.9 million and the net profit decreased by 15%
to EUR 3.9 million. The Group’s financial leverage improved, the total debt to
EBITDA ratio fell to 2.39 and the equity ratio increased to 63%. 

The Group’s result was most affected by the loss of EUR 1.1 million in
connection with the exhibition of RMS Titanic held in the middle of the year in
Riga and the one cancelled in Vilnius. Total EBITDA earned by the Group’s main
segments amounted to EUR 9 million, an increase of 1% from the previous year,
however 6% behind the yearly budget. The net profit from core business amounted
to EUR 5 million, and was 8% higher than a year earlier but also remained 7%
behind the budget. The above figures include all our joint ventures (AS SL
Õhtuleht, AS Ajakirjade Kirjastus and AS Express Post) consolidated 50%
line-by-line. 

The profit earned from the Group’s core business was unchanged from last year,
in spite of the 11% decrease in sales revenue of the printing house and the
year-on-year decrease of EBITDA by EUR 1 million. This means that the profit of
media segment offset the loss of the printing services segment. Whereas in
2014, the media segment accounted for 40% in the profit earned by the Group’s
core business, it increased to 50% in 2015, proving the viability of the media
segment. 

The key factor affecting the result of the printing services segment was the
negative impact of economic sanctions imposed on Russia on exports of the
Scandinavian printing industry. This resulted in the notable increase of price
pressure in export markets and forced the Group’s printing house Printall to
lower sales prices. In addition to fierce price pressure, the company’s
business volumes also decreased. In the final quarter of 2015, the revenue of
AS Printall was 9% lower and the profit was 17% lower than a year before. For
the year, the result decreased 11% and EBITDA fell by 16%. At the end of 2015
the situation has stabilized and the company is determined to maintain its last
year’s level and expects moderate growth in 2016. The company’s activities have
been streamlined as much as possible and its very competitive profit margin
enables Printall to be flexible in pricing. The company’s management has
decided that Printall must compete with its quality of service rather than low
pricing. 

Keywords in the media segment were higher profitability of the Group’s Estonian
and Latvian enterprises, and the price shock in Lithuania caused by the
changeover to the euro. In the 4th quarter of 2015, the media segment’s
consolidated sales revenue and EBITDA both increased by 9% compared to the same
quarter a year earlier. In financial terms, the income amounted to EUR 11
million and EBITDA totalled EUR 1.6 million. Yearly revenues of media segment
grew 8% compared to year ago and 2% compared to budget, amounting to EUR 40
million.  EBITDA increased 22% compared to previous year and exceeded the
budget by 15% amounting to EUR 4.9 million. 

For Delfi Lithuania, the start of the year was difficult because of the price
shock from the abovementioned transition to the euro. As a result, EBITDA
increased only 6% in a year, which was below our expectations. The annual
result of Delfi Latvia increased 60% as compared to the year before. Most of
the growth came from active participation on the advertising market and the
content quality of online products. The year’s most important event in the
media segment was the merger of Estonian newspaper publisher AS Eesti Ajalehed
and online portal Delfi into a new company, AS Ekspress Meedia. This resulted
in EBITDA growth of 45% as compared to the year earlier. The merger has both
improved cost efficiency of various departments as well as notably increased
competitiveness on the advertising market. Today, Ekspress Meedia employs over
300 people and the company serves approximately 100 thousand different
subscribers, many of whom subscribe to more than one title published by the
Group. In 2015 the company sold advertising for more than EUR 10 million. In
the final quarter, advertising income earned by the mobile version of the news
portal amounted to more than EUR 100 thousand a month. 

For the year as a whole, also joint ventures AS SL Õhtuleht and AS Ajakirjade
Kirjastus increased their profit notably, by 43% and 52% respectively. The only
one that earned less profit in the media segment for the year was Express Post,
the home delivery company that saw its annual profit to decrease 22%. One
important factor behind the decrease of profit in Express Post was the increase
in wage costs of the company’s postmen. Hea Lugu, the Group’s book publishing
enterprise earned more or less the same profit as a year ago and this without
any series, publishing only individual titles in 2015. Best selling book was
the biography of the Estonian singer Jaak Joala that has been sold more than
10,000 copies and more than tripled the company’s result in the final quarter
of 2015. 

In the media segment, we continued investing in digital platforms of our
publications. Among others we launched a new digital solution for the Eesti
Ekspress weekly, launched a new evening digital paper for Eesti Päevaleht  and
brought to the market the first digital magazine in the portfolio of AS
Ajakirjade Kirjastus. In 2016 we will launch digital versions of the rural
weekly Maaleht and key magazines, increasing the digital portfolio of the
Group’s subsidiaries and joint ventures to more than ten different titles. In
the field of digital publishing, we have found a very cost-effective solution
that enables us to relatively rapidly and with minimum costs to make progress
in digital media. The digital publication of Õhtuleht and Russian-language news
portal www.vecherka.ee were launched. Costs related to the new activities have
affected EBITDA, but in the long term, they will create an opportunity to
generate additional revenues. 

From print media side we surprised our readers with the introduction of a more
substantial weekly LP newspaper in September. Maaleht has issued successful
book series of Tarkusepuu (Wisdomtree), which supported well the retail sales
of Maaleht. The paper version of Eesti Päevaleht was redesigned. Ajakirjade
Kirjastus acquired the Sensa magazine, widening its activities towards
self-development and psychology. 

During the year we also founded one new legal entity, OÜ Zave Media. It’s a
startup that is building up an online consumer portal in all Baltic countries
to help customers find the best vendor for the products that they need. Every
month, the portal has ca 100 thousand unique users in Estonia, 60 thousand in
Latvia and over 200 thousand in Lithuania who regularly browse products of an
average of 100 different merchants per country. 

During the year, we also made our first passive investment in a startup
enterprise by investing EUR 50 thousand in Jobbatical, a job exchange portal.
On the first month of the new year, Jobbatical completed the next funding round
for development, raising ca USD 2 millions, mainly from US institutional
investors. Although this investment is not directly in line with the Group’s
investment policy, we consider it a good first step in entering the world of
seed companies and will continue to study new potential investment targets. 

In the new year we will continue analysing business areas related to new media
with the objective of finding new activities and enterprises to add to the
Group’s portfolio of subsidiaries. We find that the media sector in all three
Baltic countries is saturated which is why we are looking for growth from
outside the traditional media segment however on targets related to the same
industry. 

Our forecast for the new year is sales growth of 7% and EBITDA growth of 14%
provided, of course, that stable development of the global economy remains
unchanged. 

Our mission remains to offer new and interesting experiences both on paper and
in digital media, without ever compromising on news quality, choice of topics
and journalistic objectivity. 

The Group’s goal is to be a truly modern media group with a strong foothold in
all markets where actively present, with a leading position in online media. 

FINANCIAL INDICATORS AND RATIOS – joint ventures consolidated 50%line-by-line

In consolidated financial reports 50% joint ventures are recognised under the
equity method, in compliance with international financial reporting standards
(IFRS). In its monthly reports, the management monitors the Group’s performance
on a basis of proportional consolidation of joint ventures and the syndicated
loan contract also determines the calculation of some loan covenants by
proportional consolidation. For the purpose of clarity, the management report
shows two sets of indicators: one where joint ventures are consolidated
line-by-line 50% and the other where joint ventures are recognised under the
equity method and their net result is presented as financial income in one
line. 





Performance indicators  - joint       Q4      Q4  Change      Q4      Q4      Q4
 ventures consolidated  50% (EUR    2015    2014       %    2013    2012    2011
 thousand)                                                                      
For the period                                                                  
Sales                             17 181  16 778      2%  16 526  16 447  16 313
EBITDA                             2 720   2 757     -1%   2 015   2 246   1 986
EBITDA margin (%)                  15.8%   16.4%           12.2%   13.7%   12.2%
Operating profit*                  1 936   1 895      2%   1 348   1 496   1 037
Operating margin* (%)              11.3%   11.3%            8.2%    9.1%    6.4%
Interest expenses                  (141)   (186)     24%   (185)   (206)   (523)
Net profit /(loss) for the         1 660   1 614      3%   1 057   1 268     535
 period*                                                                        
Net margin* (%)                     9.7%    9.6%            6.4%    7.7%    3.3%
Net profit for the period in         460   1 149    -60%      (1   1 112   (215)
 financial statements                                       410)                
(incl. impairments and gain on                                                  
 change of ownership interest)                                                  
Net margin (%)                      2.7%    6.8%           -8.5%    6.8%   -1.3%
Return on assets ROA (%)            0.6%    1.4%           -1.8%    1.4%   -0.3%
Return on equity ROE (%)            0.9%    2.4%           -3.3%    2.7%   -0.6%
Earnings per share (EPS)            0.02    0.04          (0.05)    0.04  (0.01)







Performance indicators  - joint       12      12  Change      12      12      12
 ventures consolidated  50% (EUR  months  months       %  months  months  months
 thousand)                          2015    2014            2013    2012    2011
For the period                                                                  
Sales                             61 528  61 384      0%  58 427  59 706  57 391
EBITDA                             7 869   8 878    -11%   7 264   7 882   6 968
EBITDA margin (%)                  12.8%   14.5%           12.4%   13.2%   12.1%
Operating profit*                  4 866   5 638    -14%   4 647   4 596   3 443
Operating margin* (%)               7.9%    9.2%            8.0%    7.7%    6.0%
Interest expenses                  (618)   (732)     16%   (763)      (1      (2
                                                                    549)    212)
Net profit /(loss) for the         3 907   4 620    -15%   3 548   2 682     893
 period*                                                                        
Net margin* (%)                     6.4%    7.5%            6.1%    4.5%    1.6%
Net profit for the period in       2 707   5 110    -47%   1 081   2 525   1 683
 financial statements (incl.                                                    
 impairments and gain on change                                                 
 of ownership interest)                                                         
Net margin (%)                      4.4%    8.3%            1.9%    4.2%    2.9%
Return on assets ROA (%)            3.5%    6.6%            1.4%    3.2%    2.0%
Return on equity ROE (%)            5.6%   11.4%            2.5%    6.4%    4.4%
Earnings per share (EPS)            0.09    0.17            0.04    0.08    0.06



* The results exclude allowances on impairments and one-off gains in relation
to the acquisition in Eesti Päevalehe AS in 2011 and the change in ownership
structure in joint ventures AS Ajakirjade Kirjastus and AS SL Õhtuleht in 2014. 





Balance sheet– joint ventures consolidated      31.12.2015  31.12.2014  Change %
 50%                                                                            
(EUR thousand)                                                                  
As of the end of the period                                                     
Current assets                                      15 553      15 189        2%
Non-current assets                                  61 588      65 665       -6%
Total assets                                        77 141      80 854       -5%
incl. cash and bank                                  4 666       6 788      -31%
incl. goodwill                                      38 232      39 432       -3%
Current liabilities                                 12 539      14 110      -11%
Non-current liabilities                             15 928      19 569      -19%
Total liabilities                                   28 467      33 679      -15%
incl. borrowings                                    18 787      24 592      -24%
Equity                                              48 674      47 175        3%







Financial ratios (%) – joint ventures consolidated  50%  31.12.2015  31.12.2014
Equity ratio (%)                                            63%         58%    
Debt to equity ratio (%)                                    39%         52%    
Debt to capital ratio (%)                                   22%         27%    
Total debt /EBITDA ratio                                    2.39        2.61   
Debt service coverage ratio                                 1.79        1.90   
Liquidity ratio                                             1.24        1.08   







FINANCIAL INDICATORS AND RATIOS – joint ventures recognised                    
  under the equity method 

Performance indicators – joint        Q4      Q4  Change      Q4      Q4      Q4
 ventures under the equity          2015    2014       %    2013    2012    2011
 method (EUR thousand)                                                          
For the period                                                                  
Sales (only subsidiaries)         14 811  14 454      2%  14 291  14 165  13 995
EBITDA (only subsidiaries)         2 440   2 413      1%   1 815   2 017   1 740
EBITDA margin (%)                  16.5%   16.7%           12.7%   14.2%   12.4%
Operating profit* (only            1 718   1 661      3%   1 175   1 293     822
 subsidiaries)                                                                  
Operating margin* (%)              11.6%   11.5%            8.2%    9.1%    5.9%
Interest expenses (only            (125)   (158)     21%   (185)   (206)   (524)
 subsidiaries)                                                                  
Profit of joint ventures by          196     182      8%     174     202     208
 equity method                                                                  
Net profit for the period*         1 660   1 601      4%   1 057   1 269     535
Net margin* (%)                    11.2%   11.1%            7.4%    9.0%    3.8%
Net profit for the period in         460   1 136    -60%      (1   1 112   (215)
 financial statements                                       410)                
(incl. impairments and gain on                                                  
 change of ownership interest)                                                  
Net margin (%)                      3.1%    7.9%           -9.9%    7.8%   -1.5%
Return on assets ROA (%)            0.6%    1.5%           -1.8%    1.4%   -0.3%
Return on equity ROE (%)            0.9%    2.4%           -3.2%    2.7%   -0.6%
Earnings per share (EPS)            0.02    0.04          (0.05)    0.04  (0.01)







Performance indicators – joint        12      12  Change      12      12      12
 ventures under the equity        months  months       %  months  months  months
 method (EUR thousand)              2015    2014            2013    2012    2011
For the period                                                                  
Sales (only subsidiaries)         52 773  52 793      0%  50 086  51 290  49 027
EBITDA (only subsidiaries)         6 680   7 894    -15%   6 591   7 345   6 311
EBITDA margin (%)                  12.7%   15.0%           13.2%   14.3%   12.9%
Operating profit* (only            3 920   4 973    -21%   4 071   4 173   2 930
 subsidiaries)                                                                  
Operating margin* (%)               7.4%    9.4%            8.1%    8.1%    6.0%
Interest expenses (only            (550)   (689)     20%   (763)      (1      (2
 subsidiaries)                                                      550)    219)
Profit of joint ventures by          785     557     41%     494     339     421
 equity method                                                                  
Net profit for the period*         3 907   4 621    -15%   3 548   2 682     893
Net margin* (%)                     7.4%    8.8%            7.1%    5.2%    1.8%
Net profit for the period in       2 707   5 110    -47%   1 081   2 525   1 683
 financial statements (incl.                                                    
 impairments and gain on change                                                 
 of ownership interest)                                                         
Net margin (%)                      5.1%    9.7%            2.2%    4.9%    3.4%
Return on assets ROA (%)            3.7%    6.8%            1.4%    3.2%    2.0%
Return on equity ROE (%)            5.6%   11.4%            2.5%    6.4%    4.4%
Earnings per share (EPS)            0.09    0.17            0.04    0.08    0.06



* The results exclude allowances on impairments and one-off gains in relation
to the acquisition in Eesti Päevalehe AS in 2011 and the change in ownership
structure in joint ventures AS Ajakirjade Kirjastus and AS SL Õhtuleht in 2014. 





Balance sheet– joint ventures under equity        31.12.2015  31.12.2014  Change
 method (EUR thousand)                                                       %  
As of the end of the period                                                     
Current assets                                        12 386      12 303      1%
Non-current assets                                    60 794      64 292     -5%
Total assets                                          73 180      76 595     -4%
incl. cash and bank                                    2 927       5 275    -45%
incl. goodwill                                        36 953      38 153     -3%
Current liabilities                                    9 033      11 481    -21%
Non-current liabilities                               15 473      17 939    -14%
Total liabilities                                     24 506      29 420    -17%
incl. borrowings                                      17 687      23 152    -24%
Equity                                                48 674      47 175      3%







Financial ratios (%) – joint ventures by equity method  31.12.2015  31.12.2014
Equity ratio (%)                                           67%         62%    
Debt to equity ratio (%)                                   36%         49%    
Debt to capital ratio (%)                                  23%         27%    
Total debt /EBITDA ratio                                   2.65        2.93   
Debt service coverage ratio                                1.67        1.77   
Liquidity ratio                                            1.38        1.07   



Cyclicality

All operating areas of the Group are characterised by cyclicality and
fluctuation, related to the changes in the overall economic conditions and
consumer confidence. The Group’s revenue can be adversely affected by an
economic slowdown or recession in home and export markets. It can appear in
lower advertising costs in retail, preference of other advertising channels
like preference of internet rather than print media and changes in consumption
habits of retail consumers e.g. following current news in news portals versus
reading printed newspapers, preference of the younger generation to use mobile
devices and other communication channels, etc. 

Seasonality

The revenue from the Group’s advertising sales as well as revenue in the
printing services segment is impacted by major seasonal fluctuations. The level
of both types of revenue is the highest in the 2nd and 4th quarter of each year
and the lowest in the 3rd quarter. Revenue is higher in the 4th quarter because
of higher consumer spending during the Christmas season, accompanied by the
increase in advertising expenditure. Advertising expenditure is usually the
lowest during the summer months, as well as during the first months of the year
following Christmas and New Year’s celebrations. Book sales are the strongest
in the last quarter of the year. Subscriptions and retail sales of periodicals
do not fluctuate as much as advertising revenue. However the summer period is
always more quiet and at the beginning of the school year in September there is
an increase in subscriptions and retail sale which usually continues until next
summer holiday period. 



Formulas used to calculate the financial ratios                                 
EBITDA       Earnings before interest, tax, depreciation and amortization.      
              EBITDA does not include any impairment losses recognized during   
              the period or result from restructuring.                          
EBITDA       EBITDA/sales x 100                                                 
 margin (%)                                                                     
Operating    Operating profit*/sales x100                                       
 margin*                                                                        
 (%)                                                                            
Net margin*  Net profit*/sales x100                                             
 (%)                                                                            
Net margin   Net profit /sales x100                                             
 (%)                                                                            
Earnings     Net profit / average number of shares                              
 per share                                                                      
Equity       Equity/ (liabilities + equity) x100                                
 ratio (%)                                                                      
Debt to      Interest bearing liabilities /equity x 100                         
 equity                                                                         
 ratio (%)                                                                      
Debt to      Interest bearing liabilities – cash and cash equivalents (net debt)
 capital      /(net debt +equity) x 100                                         
 ratio (%)                                                                      
Total        Interest bearing borrowings /EBITDA                                
 debt/EBITD                                                                     
A ratio                                                                         
Debt         EBITDA/loan and interest payments for the period                   
 service                                                                        
 coverage                                                                       
 ratio                                                                          
Liquidity    Current assets / current liabilities                               
 ratio                                                                          
Return on    Net profit /average assets x 100                                   
 assets ROA                                                                     
 (%)                                                                            
Return on    Net profit /average equity x 100                                   
 equity ROE                                                                     
 (%)                                                                            





* The results exclude allowances on impairments and one-off gains in relation
to the acquisition in Eesti Päevalehe AS in 2011 and the change in ownership
structure in joint ventures AS Ajakirjade Kirjastus and AS SL Õhtuleht in 2014. 

SEGMENT OVERVIEW

From the 3rd quarter of 2014, when the Group’s Lithuanian subsidiaries were
merged, the Group’s activities are divided into the media segment, printing
services segment and entertainment segment launched this year. Previously, the
entities of the media segment were divided into online media and periodicals
segments. 

The segments’ EBITDA does not include intragroup management fees, impairment of
goodwill and trademarks. Volume-based and other fees payable to advertising
agencies have not been deducted from the advertising sales of segments, because
the management monitors gross advertising sales. Discounts and rebates are
reduced from the Group’s sales and are included in the combined line of
eliminations. 

Key financial data of the segments Q4 2011-2015



(EUR thousand)                         Sales                     Sales          
                              Q4 2015  Q4 2014  Change  Q4 2013  Q4 2012      Q4
                                                     %                      2011
media segment  (by equity       8 399    7 535     11%    7 617    7 049   6 550
 method)                                                                        
incl. revenue from all          4 544    4 015     13%    3 389    3 029   2 618
 digital and online channels                                                    
printing services segment       7 386    8 083     -9%    7 566    8 046   8 143
entertainment segment               0        0       -        0        0       0
corporate functions               543      459     18%      393      308      71
intersegment eliminations     (1 517)  (1 624)          (1 286)  (1 238)   (769)
TOTAL GROUP by equity method   14 811   14 454      2%   14 291   14 165  13 995
media segment by               11 041   10 141      9%   10 043    9 532   9 030
 proportional consolidation                                                     
incl. revenue from all          4 832    4 257     14%    3 584    3 184   2 773
 digital and online channels                                                    
printing services segment       7 386    8 083     -9%    7 566    8 046   8 143
entertainment segment               0        0       -        0        0       0
corporate functions               543      459     18%      393      308      71
intersegment eliminations     (1 789)  (1 905)          (1 476)  (1 439)   (931)
TOTAL GROUP by proportional    17 181   16 778      2%   16 526   16 447  16 313
 consolidation                                                                  







(EUR thousand)                            EBITDA                  EBITDA        
                                     Q4      Q4   Change      Q4      Q4      Q4
                                   2015    2014        %    2013    2012    2011
media segment by equity method    1 299   1 103      18%   1 014     611     511
media segment by proportional     1 579   1 448       9%   1 214     839     758
 consolidation                                                                  
printing services segment         1 355   1 623     -17%   1 604   1 650   1 495
entertainment segment               (4)       0        -       0       0       0
corporate functions               (210)   (313)      33%   (763)   (242)   (268)
intersegment eliminations             0       0             (40)     (1)       2
TOTAL GROUP by equity method      2 440   2 413       1%   1 815   2 017   1 740
TOTAL GROUP by proportional       2 720   2 757      -1%   2 015   2 246   1 986
 consolidation                                                                  







EBITDA margin                        Q4 2015  Q4 2014  Q4 2013  Q4 2012  Q4 2011
media segment  by equity method          15%      15%      13%       9%       8%
media segment  by proportional           14%      14%      12%       9%       8%
 consolidation                                                                  
printing services segment                18%      20%      21%      21%      18%
TOTAL GROUP by equity method             16%      17%      13%      14%      12%
TOTAL GROUP by proportional              16%      16%      12%      14%      12%
 consolidation                                                                  





Key financial data of the segments 12 months 2011-2015



(EUR thousand)                      Sales                       Sales           
                               12        12  Change        12       12        12
                           months    months       %    months   months    months
                             2015      2014              2013     2012      2011
media segment  (by         30 063    27 459      9%    25 842   25 562    23 789
 equity method)                                                                 
incl. revenue from all     15 530    13 449     15%    11 595   10 561     9 111
 digital and online                                                             
 channels                                                                       
printing services          25 842    28 951    -11%    27 462   29 167    27 736
 segment                                                                        
entertainment segment         517         0       -         0        0         0
corporate functions         1 937     1 731     12%     1 530      996       209
intersegment              (5 586)   (5 347)           (4 748)  (4 435)   (2 707)
 eliminations                                                                   
TOTAL GROUP by equity      52 773    52 793      0%    50 086   51 290    49 027
 method                                                                         
media segment by           39 943    36 930      8%    34 955   34 773    32 771
 proportional                                                                   
 consolidation                                                                  
incl. revenue from all     16 577    14 306     16%    12 226   11 147     9 673
 digital and online                                                             
 channels                                                                       
printing services          25 842    28 951    -11%    27 462   29 167    27 736
 segment                                                                        
entertainment segment         517         0       -         0        0         0
corporate functions         1 937     1 731     12%     1 530      996       209
intersegment              (6 711)   (6 228)           (5 520)  (5 230)   (3 325)
 eliminations                                                                   
TOTAL GROUP by             61 528    61 384      0%    58 427   59 706    57 391
 proportional                                                                   
 consolidation                                                                  







(EUR thousand)                     EBITDA                       EBITDA          
                               12        12  Change        12       12        12
                           months    months       %    months   months    months
                             2015      2014              2013     2012      2011
media segment by equity     3 724     3 025     23%     2 123    2 089     1 325
 method                                                                         
media segment by            4 913     4 013     22%     2 792    2 624     1 977
 proportional                                                                   
 consolidation                                                                  
printing services           4 966     5 944    -16%     5 862    6 052     5 959
 segment                                                                        
entertainment segment     (1 110)         0       -         0        0         0
corporate functions         (899)   (1 076)     16%   (1 356)    (797)     (980)
intersegment                    0         0              (38)        1         7
 eliminations                                                                   
TOTAL GROUP by equity       6 680     7 894    -15%     6 591    7 345     6 311
 method                                                                         
TOTAL GROUP by              7 869     8 878    -11%     7 264    7 882     6 968
 proportional                                                                   
 consolidation                                                                  







EBITDA margin               12 months  12 months  12 months        12  12 months
                                 2015       2014       2013    months       2011
                                                                 2012           
media segment  by equity          12%        11%         8%        8%         6%
 method                                                                         
media segment  by                 12%        11%         8%        8%         6%
 proportional                                                                   
 consolidation                                                                  
printing services segment         19%        21%        21%       21%        21%
TOTAL GROUP by equity             13%        15%        13%       14%        13%
 method                                                                         
TOTAL GROUP by                    13%        15%        12%       13%        12%
 proportional                                                                   
 consolidation                                                                  

MEDIA SEGMENT

The media segment includes Delfi operations in Estonia, Latvia and Lithuania,
publishing of Estonian newspapers Maaleht, Eesti Ekspress and Eesti Päevaleht,
book publishing in Estonia, magazine publishing in Lithuania, activities of the
retail offer portal Zave and holding company Delfi Holding. This segment also
includes 50% joint ventures AS SL Õhtuleht (publisher of Õhtuleht and
Linnaleht), magazine publisher AS Ajakirjade Kirjastus and home delivery
company AS Express Post. 

Delfi companies’ EBITDA is presented before the trademark royalty fees that
were paid to the direct parent company Delfi Holding until April 2015. In May
2015, Delfi group was restructured, as a consequence of which Delfi’s local
companies are directly owned by AS Ekspress Grupp. The ownership was changed in
Lithuania in October 2015. The new structure reflects better the actual
management structure which has gradually changed over the years. 

In July 2015 AS Delfi and newspaper publisher AS Eesti Ajalehed were mergered
in Estonia. New company continues to operate under name AS Ekspress Meedia. A
year earlier Delfi UAB and magazine publisher Ekspress Leidyba UAB were merged
in Lithuania. In Lithuania mergered entity continued under name of Delfi. 

News portals owned by the Group



Owner            Portal        Owner            Portal         
Ekspress Meedia  www.delfi.ee  Ekspress Meedia  www.ekspress.ee
                 rus.delfi.ee                   www.maaleht.ee 
Delfi Latvia     www.delfi.lv                   www.epl.ee     
                 rus.delfi.lv                                  
Delfi Lithuania  www.delfi.lt  AS SL Õhtuleht   www.ohtuleht.ee
                 ru.delfi.lt                    www.vecherka.ee







(EUR thousand)                                                Sales          
                                                   Q4 2015  Q4 2014  Change %
Ekspress Meedia AS (Delfi Eesti + Eesti Ajalehed)    4 756    4 365        9%
incl. Delfi Estonia online revenue                   1 592    1 439       11%
Delfi Latvia                                           927      786       18%
Delfi Lithuania (incl. Ekspress Leidyba)             2 414    2 250        7%
incl. Delfi Lithuania online revenue                 1 887    1 679       12%
OÜ Hea Lugu                                            304      202       50%
OÜ Zave Media                                            2        0         -
Other companies (Delfi Holding)                          0        0         -
Intersegment eliminations                              (4)     (68)          
TOTAL subsidiaries                                   8 399    7 535       11%
AS SL Õhtuleht*                                      1 066    1 022        4%
AS Ajakirjade Kirjastus*                             1 218    1 205        1%
AS Express Post*                                       648      654       -1%
Intersegment eliminations                            (289)    (275)          
TOTAL joint ventures                                 2 643    2 606        1%
TOTAL segment by proportional consolidation         11 041   10 141        9%







(EUR thousand)                                               EBITDA          
                                                   Q4 2015  Q4 2014  Change %
Ekspress Meedia AS (Delfi Eesti + Eesti Ajalehed)      425      434       -2%
Delfi Latvia                                           157      126       25%
Delfi Lithuania (incl. Ekspress Leidyba)               723      523       38%
OÜ Hea Lugu                                             85       23      270%
OÜ Zave Media                                         (87)        0         -
Other companies (Delfi Holding)                        (4)      (4)       -3%
Intersegment eliminations                              (1)        1          
TOTAL subsidiaries                                   1 299    1 103       18%
AS SL Õhtuleht*                                        113      127      -11%
AS Ajakirjade Kirjastus*                                86      104      -18%
AS Express Post*                                        82      114      -28%
Intersegment eliminations                              (0)      (0)          
TOTAL joint ventures                                   281      344      -19%
TOTAL segment by proportional consolidation          1 579    1 448        9%



*Proportional share of joint ventures



(EUR thousand)                                             Sales                
                                               12 months      12 months   Change
                                                    2015           2014        %
Ekspress Meedia AS (Delfi Eesti + Eesti           18 248         16 350      12%
 Ajalehed)                                                                      
incl. Delfi Estonia online revenue                 5 931          4 953      20%
Delfi Latvia                                       3 066          2 562      20%
Delfi Lithuania (incl. Ekspress Leidyba)           8 230          8 047       2%
incl. Delfi Lithuania online revenue               6 051          5 557       9%
Delfi Ukraine                                          0              2    -100%
OÜ Hea Lugu                                          651            792     -18%
OÜ Zave Media                                          5              0        -
Other companies (Delfi Holding)                        0              0        -
Intersegment eliminations                          (136)          (294)         
TOTAL subsidiaries                                30 063         27 459       9%
AS SL Õhtuleht*                                    4 154          3 909       6%
AS Ajakirjade Kirjastus*                           4 347          4 224       3%
AS Express Post*                                   2 477          2 415       3%
Intersegment eliminations                        (1 099)        (1 077)         
TOTAL joint ventures                               9 879          9 471       4%
TOTAL segment by proportional                     39 943         36 930       8%
 consolidation                                                                  







(EUR thousand)                                            EBITDA                
                                               12 months      12 months   Change
                                                    2015           2014        %
Ekspress Meedia AS (Delfi Eesti + Eesti            1 899          1 306      45%
 Ajalehed)                                                                      
Delfi Latvia                                         301            188      60%
Delfi Lithuania (incl. Ekspress Leidyba)           1 590          1 495       6%
Delfi Ukraine                                          0           (51)     100%
OÜ Hea Lugu                                           91             94      -3%
OÜ Zave Media                                      (147)              0        -
Other companies (Delfi Holding)                      (9)           (10)       9%
Intersegment eliminations                            (1)              2         
TOTAL subsidiaries                                 3 724          3 025      23%
AS SL Õhtuleht*                                      508            356      43%
AS Ajakirjade Kirjastus*                             392            257      52%
AS Express Post*                                     289            372     -22%
Intersegment eliminations                            (0)              2         
TOTAL joint ventures                               1 189            987      20%
TOTAL segment by proportional                      4 913          4 013      22%
 consolidation                                                                  



*Proportional share of joint ventures

DELFI and its related products

As a market leader Delfi continues to invest into new technologies and IT
solutions to improve user experience of its readers and advertisers. During a
year a new Delfi mobile applications for both IOS and Android devices were
launched providing possibility of using more creative solutions in mobile
environment. Launch of different programmatic direct platforms for advertisers
was done independently by each country. Also HTML5 animated technology for
displaying advertising banners was deployed in all three countries. New modern
DELFI TV platform with a responsive design was launched. Newly made design and
interactive technological features improved viewing of DELFI video content,
made it more convenient and adjusted to watch on different devices like
computer, mobile, tablet. Delfi Lithuania built a new video streaming system in
cooperation with TEO. This solution will help to maintain about 25-30 thousand
video viewers at the same time. 

Several Delfi sub-sites and topical portals were updated and diversified
including improvement of the comments section. A new article view was presented
in almost all channels. Each country continues to develop vertical products
depending on the demand of the market. During the year Delfi Estonia launched a
new cooking portal www.maitsed.ee, pet portal www.lemmikloom.ee, fashion portal
www.catwalk.ee, Russian-language travel portal www.turist.ee. In Latvia a
Russian-language hobby vertical www.zhurnal.lv, gardening portal
www.mansdarzs.lv, home design portal www.manamaja.lv, technology portal
www.techlife.lv, pet portal www.MansDraugs.lv, radio stream aggregator
www.radioplayer.lv. were launched. Delfi Lithuania has launched portals
www.daraupats.lt, targeted at those who want to do things themselves, a portal 
www.vyriskai.lt, dedicated to men and includes such themes like leisure, style,
hobbies, other practical info. In connection with the European Basketball
Championship, a new portal for basketball fans www.krepsinis.lt was launched
with the aim of becoming Lithuanian largest top-quality basketball portal. In
Latvia a new e-commerce platform offering booking opportunities of beauty
services www.tobook.lv was launched as a pilot project. 

In all countries there is a focus on writing more long-read analytical articles
in order to increase Delfi’s position in all qualitative indexes like “trust”,
“usability”, “originality” and etc. In Estonia this has been provided in
co-operation with editorial teams of our daily and weekly newspapers Eesti
Päevaleht, Eesti Ekspress and Maaleht. 

All Delfies contribute to society by supporting different charity projects,
cultural, sport, social and business events in all countries. 

Estonian online readership 2014-2015

In the 4th quarter 2015, Delfi remains the largest online portal in Estonia.
There is more competition for the attention of readers and competitors have
managed to increase their readership by active marketing activities. Special
attention continues to be paid on mobile users as their number keeps growing.
Delfi is the market leader among mobile users. New mobile applications that
were launched in the 4th quarter will definitely improve convenience of use
and, as a result, increase customer satisfaction. In 2015, online readership of
Delfi grew by 10% in average. Most of this growth has come from the increase in
the number of mobile devices. The growth rate of new devices is expected to
slow down in 2016 since the majority of new telephones are already smartphones.
At the same time we expect readership of video content to increase. 



Latvian online readership 2014-2015

2015 was full of changes for Latvian online portals as a whole. At the start of
the year, Delfi overtook Inbox.lv and was Latvia’s largest portal for several
months. At the end of the year, however, Inbox.lv regained the leader position
in readership. The gap between news portals Delfi and Tvnet has remained
largely unchanged. Unlike in Estonia, the number of mobile users in Latvia is
not growing as rapidly and there is less competition. At the same time, the
number of mobile users is expected to increase notably in 2016. 

Starting from January 2015, the method of the Gemius online survey has changed.
The readership in 2015 includes statistics of users in the age group 7-74 years
of age. In previous periods, statistics was published on the age group 15-74
years of age. 



Lithuanian online readership 2014-2015

Delfi remains Lithuanian largest online portal. In the 4th quarter 2015, there
were no major changes in preferences of online users in Lithuania. However,
competition on the market is increasing because MTG has acquired products of
Tipro group including several online portals and merged them with tv3.lt,
creating Lithuanian fourth largest group of online portals. However, its
readership has been decreasing as is characteristic to the merger of various
portals. Among mobile users, the two leading competitors in Lithuania are
Delfi.lt and 15min.lt. In 2016 it is expected that the fastest-growing business
will be creating and marketing video content. 

PRINT MEDIA IN ESTONIA

Estonian newspaper circulation 2014-2015



Circulations of newspapers in Estonia are falling moderately, although in the
second half of 2015 the circulations once again posted growth. The newspaper
market is clearly stabilizing and the number of subscribers and retail buyers
remains unchanged or is even growing. This may be partly due to stronger
marketing of digital newspapers that is bringing people back to local
newspapers. Stable and even growth of Õhtuleht and Maaleht is encouraging. In
different months, both newspapers had Estonian largest print circulations. One
also needs to add to these figures the number of subscribers of digital
newspapers which totalled more than 12 thousand for newspapers published by the
Ekspress Group at the end of 2015. 

Estonian newspaper readership 2014-2015

With regard to the circulation of newspapers, also the readership of
publications has remained relatively stable, although in the long run it is
decreasing ca 3-5% a year. Since this survey does not cover the readership of
digital newspapers, it does not represent the actual readership. The number of
digital subscribers of periodicals of the Ekspress Group exceeds 12 thousand.
Increasing the readership of digital newspapers remains the main task for the
Group’s publications. There have been no significant changes in the competition
situation in readership in 2015. The only newspapers that have increased
readership from the 4th quarter 2015 were Eesti Päevaleht and Maaleht. 

PRINTING SERVICES SEGMENT

All printing services of the Group are provided by AS Printall which is one of
the largest printing companies in Estonia. Printall is able to print both
newspapers (coldset) and magazines (heatset). 





(EUR thousand)             Sales          
                Q4 2015  Q4 2014  Change %
AS Printall       7 386    8 083       -9%







(EUR thousand)            EBITDA          
                Q4 2015  Q4 2014  Change %
AS Printall       1 355    1 623      -17%







(EUR thousand)                   Sales                  
                12 months 2015  12 months 2014  Change %
AS Printall             25 842          28 951      -11%







(EUR thousand)                   EBITDA                 
                12 months 2015  12 months 2014  Change %
AS Printall              4 966           5 944      -16%





Sanctions against Russia and the related decrease in orders and price pressure
in Scandinavia characterize the whole year, resulting in the decrease of sales
revenue and EBITDA. Situation has stabilized in December thus giving hope for
better results next year. Due to changes in the political landscape there have
also been changes in the structure of export markets where the share of Russia
continues to decrease. The increase of the proportion of services sold to
Estonia is primarily attributable to the new sheet-fed machine installed at the
beginning of 2015, used for printing magazine covers, small-circulation
magazines and advertising products. 



Printing services and the environment

In addition to its very strong financial position, Printall also focuses on
environmentally conscious production.  Printall has been granted ISO 9001
management and ISO 14001 environmental certificates. 

The Minister of the Environment of the Republic of Estonia and the waste
managing company AS Ragn-Sells has awarded Printall with the title of the Top
Recycler of the Year, because the company recycles 95% of its waste. 

The Nordic Council of Ministers has awarded Printall with the environmental
label “The Nordic Ecolabel”, used to acknowledge the companies in the Nordic
countries that use environmentally efficient production. Printall also has FSC
and PEFC Chain of Custody (COC) certificates, which the company uses to promote
a green way of thinking in the printing industry. Both of those certificates
indicate compliance with monitoring and product production process requirements
which are issued to businesses that comply with the requirements established by
the FSC (Forest Stewardship Council) and the PEFC (Programme for the
Endorsement of Forest Certification). A business that is issued these
certificates helps to support the environmentally friendly, socially fair and
economically viable management of the world’s forests. 

Printall cares about the environment and uses green energy. The POWERED BY
GREEN certificate is a proof that the company buys electricity, 70% of which
has been generated by renewable sources of energy. 

                                        

Consolidated balance sheet (unaudited)

(EUR thousand)                   31.12.2015  31.12.2014
ASSETS                                                 
Current assets                                         
Cash and cash equivalents             2 927       3 656
Term deposit                              0          19
Trade and other receivables           6 741       6 519
Corporate income tax prepayment           0          37
Inventories                           2 718       2 072
Total current assets                 12 386      12 303
Non-current assets                                     
Term deposit                              0       1 600
Trade and other receivables           1 149       1 170
Deferred tax asset                       42          65
Investments in joint ventures         1 007         500
Investments in associates               215         164
Property, plant and equipment        13 791      14 506
Intangible assets                    44 590      46 287
Total non-current assets             60 794      64 292
TOTAL ASSETS                         73 180      76 595
LIABILITIES                                            
Current liabilities                                    
Borrowings                            2 240       5 213
Trade and other payables              6 679       6 249
Corporate income tax payable            114          19
Total current liabilities             9 033      11 481
Non-current liabilities                                
Long-term borrowings                 15 447      17 939
Deferred tax liability                   26           0
Total non-current liabilities        15 473      17 939
TOTAL LIABILITIES                    24 506      29 420
EQUITY                                                 
Share capital                        17 878      17 878
Share premium                        14 277      14 277
Treasury shares                       (176)        (64)
Reserves                              1 787       1 440
Retained earnings                    14 908      13 644
TOTAL EQUITY                         48 674      47 175
TOTAL LIABILITIES AND EQUITY         73 180      76 595

Consolidated statement of comprehensive income (unaudited)

(EUR thousand)                                    Q4      Q4        12        12
                                                2015    2014    months    months
                                                                  2015      2014
Sales revenue                                 14 811  14 454    52 773    52 793
Cost of sales                                    (11     (10  (41 781)  (40 688)
                                                121)    781)                    
Gross profit                                   3 690   3 673    10 992    12 105
Other income                                     281     132       659       470
Marketing expenses                             (743)   (600)   (2 377)   (2 011)
Administrative expenses                           (1      (1   (5 236)   (5 438)
                                                472)    495)                    
Other expenses                                  (38)    (49)     (118)     (153)
Gain from change in ownership interest in          0     978         0     1 933
 joint ventures                                                                 
Impairment of goodwill                            (1      (1   (1 200)   (1 443)
                                                200)    443)                    
Operating profit                                 518   1 196     2 720     5 463
Interest income                                   10      22        42        27
Interest expense                               (125)   (158)     (550)     (689)
Foreign exchange gains/(losses)                  (1)     (2)       (6)        33
Other finance costs                             (15)    (43)      (71)      (90)
Net finance cost                               (131)   (181)     (585)     (719)
Profit (loss) on shares of joint ventures        196     182       785       557
Profit (loss) from investments in associates      72      39        86        23
Profit before income tax                         655   1 236     3 006     5 324
Income tax expense                             (195)   (100)     (299)     (214)
Net profit  for the reporting period             460   1 136     2 707     5 110
Net profit for the reporting period                                             
 attributable to:                                                               
Equity holders of the parent company             460   1 136     2 707     5 110
Other comprehensive income (expense) that                                       
 may be subsequently reclassified to profit                                     
 or loss                                                                        
Currency translation differences                   0       0         0      (34)
Total other comprehensive income (expense)       460   1 136     2 707     5 076
Comprehensive income (expense) for the                                          
 reporting period                                                               
Attributable to equity holders of the parent     460   1 136     2 707     5 076
 company                                                                        
Basic and diluted earnings per share            0.02    0.04      0.09      0.17

Consolidated cash flow statement (unaudited)

(EUR thousand)                                           12 months     12 months
                                                              2015          2014
Cash flows from operating activities                                            
Operating profit for the reporting year                      2 720         5 463
Adjustments for:                                                                
Depreciation, amortisation and impairment                    2 760         2 921
Loss on goodwill impairment                                  1 200         1 443
Gain from change in ownership interest in joint                  0       (1 933)
 ventures                                                                       
(Gain)/loss on sale and write-down of property,                (4)             6
 plant and equipment                                                            
Change in value of share option                                 91           136
Cash flows from operating activities:                                           
Trade and other receivables                                  (191)           334
Inventories                                                  (645)           251
Trade and other payables                                       361       (2 250)
Cash generated from operations                               6 292         6 371
Income tax paid                                              (118)         (185)
Interest paid                                                (525)         (692)
Net cash generated from operating activities                 5 649         5 494
Cash flows from investing activities                                            
Term deposit (placement)/release                             1 600       (1 600)
Received on restructuring of joint ventures                      0         2 354
Investments in joint ventures                                    0           (3)
Acquisition of associate                                         0         (135)
Purchase of other investments                                 (50)             0
Interest received                                               33             6
Purchase of  property, plant and equipment                 (1 575)       (3 101)
Proceeds from sale of property, plant and equipment             33            13
Loans granted                                                    0          (24)
Loan repayments received                                        74             7
Net cash used in investing activities                          115       (2 483)
Cash flows from financing activities                                            
Dividends paid                                             (1 187)         (298)
Dividends received from joint ventures                         278           203
Finance lease repayments                                      (89)          (75)
Change in use of overdraft                                 (1 117)         1 117
Loan received                                                  687         1 346
Repayments of bank loans                                   (4 952)       (3 695)
Purchase of treasury shares                                  (112)          (64)
Net cash used in financing activities                      (6 492)       (1 466)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS         (729)         1 545
Cash and cash equivalents at the beginning of the            3 656         2 111
 year                                                                           
Cash and cash equivalents at the end of the year             2 927         3 656




         Additional information:
         Gunnar Kobin
         Chairman of the Management Board
         GSM: +372 5188111
         e-mail: [email protected]