Börsiteade

Pealkiri

AS Ekspress Grupp: Consolidated Interim Report for the third quarter and 9-months of 2015

Teade

Tallinn, Estonia, 2015-10-30 15:00 CET (GLOBE NEWSWIRE) --


The 3rd quarter of 2015 was very successful for the Group. The consolidated
EBITDA amounted to EUR 2.1 million, increasing by 24% as compared to the same
period last year. Net profit almost doubled and amounted to EUR 1.2 million.
After elimination of the loss related to Titanic exhibition in the amount of
EUR 1.1 million that was recognised in the first half of 2015, the Group’s
EBITDA and net profit exceeded the result of last year’s 9 months by 2% and
12%, respectively. This result is especially noteworthy because the share of
the media sector in the consolidated result has increased to the extent that
can to cover a significant decline in the printing services segment. The share
of revenue of the media sector has increased from 57% to 60% as compared to the
9 months of last year, and that of EBITDA from 37% to 48%.  The 3rd quarter was
especially successful in online media. We are also pleased with the growth in
newspaper advertising revenue. 

Under the equity method, the EBITDA of the Group’s subsidiaries was 27% higher
in the 3rd quarter than last year and revenue increased by 2%. Net profit
growth reached 84%. 

All publishing companies in the media segment throughout the Baltics posted
very strong revenue growth in the 3rd quarter, ranging from 7-22%. Ekspress
Meedia consisting of AS Delfi and AS Eesti Ajalehed that were legally merged on
1 July, posted especially strong results with revenue growth of 22% and a
fivefold increase in EBITDA. Lithuania is recovering from the euro shock of the
beginning of the year, which reflects in increased advertising volumes. 

The main success factor for Ekspress Meedia in the 3rd quarter were active
sales activities. Online advertising has exceeded our expectations – the key
reasons include our good products and the activities of the advertising team as
well as the synergy created through the merger of the print and online sales
teams. In September, we surprised our readers with the introduction of a more
substantial LP newspaper. In autumn, we continued the book series of Maaleht
Tarkusepuu, which supports well the retail sales of Maaleht. For Delfi, the
main focus was on the major events organised in summer which have increased our
visibility as well as a good sales potential through coverage of various
events. The key event for the editorial office was the coverage of the European
Basketball Championship in Riga in September, where we were visible both in
terms of our marketing as well as content. Delfi TV broadcasts were made and
subscriptions for our digital products were sold in the Estonian fan tent. 

The paper version of Eesti Päevaleht was redesigned. In August, EPL launched a
new evening digital paper which occurred for the first time in our market.
Maaleht provided more unusual approach, selling a mushroom picking trip for its
readers, the groups of which were filled  already in the first days. 

A new Delfi mobile app for iOS devices is ready to be launched, which should
further increase user convenience. One of our priorities is attraction of
mobile users and provision of content in mobile devices, as more than 40% of
our readers already use mobile platforms. 

Delfi Latvia continues the launch of its new topical portals in order to
continue to increase the number of its users and advertising revenue. Revenue
grew by 7% as compared to the 3rd quarter last year. EBITDA was lower primarily
due to on-off expenses related to the costs associated with the launch of new
products and developments made as an investment into the future. 

In the 3rd quarter, the online revenue of Delfi Lithuania  increased by 21% and
EBITDA increased by 78% as compared to the same period last year. Changes made
in the sales department, the European Basketball Championship, successfully
launched content marketing projects and higher demand for video content
contributed to successful sales. The Lithuanian print media is still in a
downward trend. 

In the 3rd quarter we set up a separate company OÜ Zave Media which took over
the teams of the commercial offer portal Zave in all three Baltic countries.
From autumn, our portals offer search services for our users in three countries
not only in respect of special price offers but full product list of retailers,
thus helping users more easily find the best seller of the product they need. 

With regard to joint ventures, AS SL Õhtuleht increased its advertising revenue
by 15% in the 3rd quarter. Growth of advertising revenue is mainly attributable
to the change in the work procedures of the advertising department carried out
at the end of the last year. Also the growth in volume and revenue of special
issues deserves to be mentioned. In September, Õhtuleht stopped cooperation
with advertising partners that has not been profitable and, instead, focused on
its own network and cooperation with the portals of Ajakirjade Kirjastus. The
good work of the editorial department in choosing and covering issues has
increased single copy sales revenues. 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. Starting from 21 September, AS
SL Õhtuleht is being managed by Merle Viirmaa who has significant experience in
the media sector. 

The quarter was also very successful to AS Ajakirjade Kirjastus. Revenue
increased  9% and EBITDA grew 93%, as compared to the same period a year
earlier. Most of the growth came from monthly magazines. The result of weekly
magazines was somewhat more modest. We published several additional magazines
and started the publication of Sensa magazine. Content sales of  magazines as a
whole were 5% higher than last year with subscription revenues playing a key
role. Special mention should be made of sharp rise in the number of subscribers
of women’s magazine Jana that is targeted at Russian speakers. For boosting
retail sales, we launched in the Rimi chain a special stand of Ajakirjade
Kirjastus and have carried out several campaigns. The book market is in strong
downward trend and in nine months publishing of books has decreased 5% year on
year.  The company’s recent bestsellers were Mart Sander’s “Litsid” and
Khodorkovski’s prison book. 

Printall, provider of printing services, is still being affected by the
unstable economic situation in Russia and economic sanctions imposed on Russia.
Sanctions have had a negative impact on the exports of the Scandinavian
printing industry, resulting in the decrease of revenue generated from Russia
and, as a consequence, has created a price pressure in the region. In the 3rd
quarter, Printall’s revenue fell 13% and EBITDA decreased 11% that is similar
to earlier quarters. In spite of fierce price pressure, Printall has managed to
maintain their high EBITDA margin. This is the result of bigger efficiency in
printing of magazine covers by the new sheet-feed machine. However, development
of new products and finding of new customers have taken more than expected. 

In September, the joint syndicated loan signed in July 2012 was refinanced. The
parties to the contract are still SEB Bank and Nordea Bank. As a result of the
transaction, the new maturity date of the loan is October 2020. The new annual
loan repayment will be approximately EUR 2 million, or almost EUR 1.6 million
less than in the previous contract. Refinancing of the loan will increase the
amount of free capital in the company and enables to react in a timely manner
to possible investment needs or increase dividends payable to the shareholders.
Refinancing of the loan contract became possible because the Group’s loan
burden had significantly decreased, making further depreciation of the loan at
current rate no longer justified. 

Our outlook with regard to the fourth quarter is modest. We still hope to see
stable growth of online media and print media, but it may be difficult to reach
the result of the 3rd quarter. In the printing services segment, fierce price
competition continues in the Scandinavian market and although the closure of
printing houses in this region may present additional opportunities for
Printall, we still expect revenue to keep decreasing. In the fourth quarter we
continue strong development of retail offer portal Zave, investing in
recruiting the necessary team. In the final quarter of the year, we expect
consolidated revenue to increase by ca 2-3%, which will be led by media
segment. However EBITDA will remain smaller by 10-12% compared to year earlier.
These figures also include 50% of the results of our joint ventures. 

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

Starting from 2014, in consolidated financial reports 50% joint ventures are
recognised under the equity method, in compliance with new international
financial reporting standards (IFRS). In its monthly reports, the management
has continued to monitor the Group’s performance on a basis of proportional
consolidation of joint ventures and the syndicated loan contract also
determines the calculation of 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% as previously 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     Q3      Q3    Change    Q3      Q3      Q3  
 ventures consolidated  50% (EUR   2015    2014      %     2013    2012    2011 
 thousand)                                                                      
For the period                                                                  
Sales                             14 169  13 833      2%  12 977  13 278  12 969
EBITDA                             2 143   1 732     24%   1 359   1 495   1 568
EBITDA margin (%)                  15.1%   12.5%           10.5%   11.3%   12.1%
Operating profit                   1 423     872     63%     718     676     715
Operating margin (%)               10.0%    6.3%            5.5%    5.1%    5.5%
Interest expenses                  (157)   (189)     17%   (204)   (301)   (554)
Net profit /(loss) for the         1 210     644     88%     455     263     119
 period*                                                                        
Net margin* (%)                     8.5%    4.7%            3.5%    2.0%    0.9%
Net profit for the period in       1 210   1 599    -24%     455     263     119
 financial statements                                                           
(incl. impairments and gain on                                                  
 change of ownership interest)                                                  
Net margin (%)                      8.5%   11.6%            3.5%    2.0%    0.9%
Return on assets ROA (%)            1.6%    2.0%            0.6%    0.3%    0.1%
Return on equity ROE (%)            2.5%    3.5%            1.1%    0.7%    0.3%
Earnings per share (EPS)            0.04    0.05            0.02    0.01    0.00



Performance indicators  -           9        9  Change        9       9        9
 joint ventures consolidated   months   months       %   months  months   months
  50% (EUR thousand)             2015     2014             2013    2012     2011
For the period                                                                  
Sales                          44 346   44 606     -1%   41 901  43 260   41 078
EBITDA                          5 148    6 124    -16%    5 246   5 634    4 988
EBITDA margin (%)               11.6%    13.7%            12.5%   13.0%    12.1%
Operating profit*               2 930    3 743    -22%    3 299   3 102    2 407
Operating margin* (%)            6.6%     8.4%             7.9%    7.2%     5.9%
Interest expenses               (477)    (546)     13%    (578)      (1  (1 689)
                                                                   343)         
Net profit /(loss) for the      2 247    3 005    -25%    2 490   1 414      360
 period*                                                                        
Net margin* (%)                  5.1%     6.7%             5.9%    3.3%     0.9%
Net profit for the period in    2 247    3 960    -43%    2 490   1 414    1 900
 financial statements                                                           
(incl. impairments and gain                                                     
 on change of ownership                                                         
 interest)                                                                      
Net margin (%)                   5.1%     8.9%             5.9%    3.3%     4.6%
Return on assets ROA (%)         2.9%     5.1%             3.2%    1.8%     2.2%
Return on equity ROE (%)         4.7%     9.0%             5.9%    3.6%     5.0%
Earnings per share (EPS)         0.08     0.13             0.08    0.05     0.06

* The results exclude impairments and the net extraordinary gain in relation to
the acquisition of an additional 50% ownership interest in Eesti Päevalehe AS
in the 1st quarter 2011. The transaction was accounted for in two parts:
firstly, as the sale of the current 50% ownership interest on which the net
extraordinary gain totalled EUR 1 540 thousand and secondly, as the acquisition
of the wholly-owned subsidiary. They also exclude a gain in the amount of EUR
1.0 million from the acquisition of the shares of AS Ajakirjade Kirjastus and
AS SL Õhtuleht from AS Eesti Meedia, their sale to OÜ Suits Meedia and further
restructuring in 2014 where essentially joint ventures with AS Eesti Meedia
were liquidated and new joint ventures with OÜ Suits Meedia were set up. 



Balance sheet– joint ventures consolidated      30.09.2015  31.12.2014  Change %
 50%                                                                            
(EUR thousand)                                                                  
As of the end of the period                                                     
Current assets                                      13 813      15 189       -9%
Non-current assets                                  63 273      65 665       -4%
Total assets                                        77 086      80 854       -5%
incl. cash and bank                                  3 876       6 788      -43%
incl. goodwill                                      39 432      39 432        0%
Current liabilities                                 11 532      14 110      -18%
Non-current liabilities                             17 323      19 569      -11%
Total liabilities                                   28 855      33 679      -14%
incl. borrowings                                    19 420      24 592      -21%
Equity                                              48 231      47 175        2%



Financial ratios (%) – joint ventures consolidated  50%  30.09.2015  31.12.2014
Equity ratio (%)                                            63%         58%    
Debt to equity ratio (%)                                    40%         52%    
Debt to capital ratio (%)                                   24%         27%    
Total debt /EBITDA ratio                                    2.46        2.61   
Debt service coverage ratio                                 1.61        1.90   
Liquidity ratio                                             1.20        1.08   



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



Performance indicators – joint        Q3      Q3  Change      Q3      Q3      Q3
 ventures under the equity          2015    2014       %    2013    2012    2011
 method (EUR thousand)                                                          
For the period                                                                  
Sales (only subsidiaries)         12 105  11 841      2%  10 985  11 377  11 046
EBITDA (only subsidiaries)         1 889   1 487     27%   1 164   1 435   1 476
EBITDA margin (%)                  15.6%   12.6%           10.6%   12.6%   13.4%
Operating profit* (only            1 230     783     57%     544     643     661
 subsidiaries)                                                                  
Operating margin* (%)              10.2%    6.6%            5.0%    5.7%    6.0%
Interest expenses (only            (140)   (175)     20%   (204)   (301)   (555)
 subsidiaries)                                                                  
Profit of joint ventures by          170      87     96%     174      33      53
 equity method                                                                  
Net profit for the period*         1 210     658     84%     455     263     119
Net margin* (%)                    10.0%    5.6%            4.1%    2.3%    1.1%
Net profit for the period in       1 210   1 613    -25%     455     263     119
 financial statements (incl.                                                    
 impairments and gain on change                                                 
 of ownership interest)                                                         
Net margin (%)                     10.0%   13.6%            4.1%    2.3%    1.1%
Return on assets ROA (%)            1.6%    2.2%            0.6%    0.3%    0.1%
Return on equity ROE (%)            2.5%    3.5%            1.1%    0.7%    0.3%
Earnings per share (EPS)            0.04    0.05            0.02    0.01    0.00



Performance indicators – joint         9       9  Change       9       9       9
 ventures under the equity        months  months       %  months  months  months
 method (EUR thousand)              2015    2014            2013    2012    2011
For the period                                                                  
Sales (only subsidiaries)         37 962  38 338     -1%  35 796  37 125  35 032
EBITDA (only subsidiaries)         4 240   5 481    -23%   4 777   5 328   4 577
EBITDA margin (%)                  11.2%   14.3%           13.3%   14.4%   13.1%
Operating profit* (only            2 202   3 313    -34%   2 897   2 879   2 108
 subsidiaries)                                                                  
Operating margin* (%)               5.8%    8.6%            8.1%    7.8%    6.0%
Interest expenses (only            (425)   (531)     20%   (578)      (1      (1
 subsidiaries)                                                      344)    695)
Profit of joint ventures by          589     375     57%     320     137     212
 equity method                                                                  
Net profit for the period*         2 247   3 019    -26%   2 490   1 414     360
Net margin* (%)                     5.9%    7.9%            7.0%    3.8%    1.0%
Net profit for the period in       2 247   3 974    -43%   2 490   1 414   1 900
 financial statements                                                           
(incl. impairments and gain on                                                  
 change of ownership interest)                                                  
Net margin (%)                      5.9%   10.4%            7.0%    3.8%    5.4%
Return on assets ROA (%)            3.0%    5.3%            3.3%    1.8%    2.3%
Return on equity ROE (%)            4.7%    9.0%            5.9%    3.6%    5.0%
Earnings per share (EPS)            0.08    0.13            0.08    0.05    0.06

* The results exclude impairments and the net extraordinary gain in relation to
the acquisition of an additional 50% ownership interest in Eesti Päevalehe AS
in the 1st quarter 2011. The transaction was accounted for in two parts:
firstly, as the sale of the current 50% ownership interest on which the net
extraordinary gain totalled EUR 1 540 thousand and secondly, as the acquisition
of the wholly-owned subsidiary. They also exclude a gain in the amount of EUR
1.0 million from the acquisition of the shares of AS Ajakirjade Kirjastus and
AS SL Õhtuleht from AS Eesti Meedia, their sale to OÜ Suits Meedia and further
restructuring in 2014 where essentially joint ventures with AS Eesti Meedia
were liquidated and new joint ventures with OÜ Suits Meedia were set up. 



Balance sheet– joint ventures under equity        30.09.2015  31.12.2014  Change
 method (EUR thousand)                                                       %  
As of the end of the period                                                     
Current assets                                        11 288      12 303     -8%
Non-current assets                                    62 256      64 292     -3%
Total assets                                          73 544      76 595     -4%
incl. cash and bank                                    2 640       5 275    -50%
incl. goodwill                                        38 153      38 153      0%
Current liabilities                                    9 319      11 481    -19%
Non-current liabilities                               15 994      17 939    -11%
Total liabilities                                     25 313      29 420    -14%
incl. borrowings                                      18 245      23 152    -21%
Equity                                                48 231      47 175      2%



Financial ratios (%) – joint ventures by equity method  30.09.2015  31.12.2014
Equity ratio (%)                                           66%         62%    
Debt to equity ratio (%)                                   38%         49%    
Debt to capital ratio (%)                                  24%         27%    
Total debt /EBITDA ratio                                   2.74        2.93   
Debt service coverage ratio                                1.51        1.77   
Liquidity ratio                                            1.21        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
(e.g. preference of internet rather than print media) and changes in
consumption habits of retail consumers (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 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 financial ratios                                     
EBITDA margin (%)   EBITDA/sales x 100                                          
Operating margin*   Operating profit*/sales x100                                
 (%)                                                                            
Net margin* (%)     Net profit*/sales x100                                      
Net margin (%)      Net profit in financial statements/sales x100               
Earnings per share  Net profit / average number of share                        
Equity ratio (%)    Equity / (liabilities + equity) x100                        
Debt to equity      Interest bearing liabilities /equity x 100                  
 ratio (%)                                                                      
Debt to capital     Interest bearing liabilities – cash. and cash equivalents   
 ratio (%)           (net debt)/(net debt +equity) x 100                        
Total debt/EBITDA   Interest bearing borrowings /EBITDA                         
 ratio                                                                          
Debt service        EBITDA/loan and interest payments for the period            
 coverage ratio                                                                 
Liquidity ratio     Current assets / current liabilities                        
Return on assets    Net profit /average assets x 100                            
 ROA (%)                                                                        
Return on equity    Net profit /average equity x 100                            
 ROE (%)                                                                        

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, and
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 Q3 2011-2015

(EUR thousand)                          Sales                     Sales         
                               Q3 2015  Q3 2014  Change  Q3 2013      Q3      Q3
                                                    %               2012    2011
media segment  (by equity        7 098    6 017     18%    5 551   5 841   5 501
 method)                                                                        
incl. revenue from all           3 549    2 918     22%    2 479   2 315   2 045
 digital and online channels                                                    
printing services segment        5 753    6 596    -13%    6 147   6 263   6 126
entertainment segment               64        0       -        0       0       0
corporate functions                434      427      2%      396     268      64
intersegment eliminations      (1 245)  (1 200)     -4%  (1 109)   (995)   (643)
TOTAL GROUP by equity method    12 105   11 841      2%   10 985  11 377  11 046
media segment by proportional    9 432    8 202     15%    7 724   7 929   7 577
 consolidation                                                                  
incl. revenue from all           3 809    3 101     23%    2 621   2 435   2 164
 digital and online channels                                                    
printing services segment        5 753    6 596    -13%    6 147   6 263   6 126
entertainment segment               64        0       -        0       0       0
corporate functions                434      427      2%      396     268      64
intersegment eliminations      (1 514)  (1 392)          (1 290)      (1   (798)
                                                                    182)        
TOTAL GROUP by proportional     14 169   13 833      2%   12 977  13 278  12 969
 consolidation                                                                  



(EUR thousand)                            EBITDA                  EBITDA        
                                     Q3      Q3   Change    Q3        Q3      Q3
                                   2015    2014     %      2013     2012    2011
media segment by equity method      889     323     175%     102     330     334
media segment by proportional     1 143     567     101%     297     390     426
 consolidation                                                                  
printing services segment         1 178   1 326     -11%   1 245   1 310   1 417
entertainment segment               (1)       0        -       0       0       0
corporate functions               (178)   (162)     -10%   (183)   (206)   (278)
intersegment eliminations           (0)     (0)    -520%       0       1       3
TOTAL GROUP by equity method      1 889   1 487      27%   1 164   1 435   1 476
TOTAL GROUP by proportional       2 143   1 732      24%   1 359   1 495   1 568
 consolidation                                                                  



EBITDA margin                        Q3 2015  Q3 2014  Q3 2013  Q3 2012  Q3 2011
media segment  by equity method          13%       5%       2%       6%       6%
media segment  by proportional           12%       7%       4%       5%       6%
 consolidation                                                                  
printing services segment                20%      20%      20%      21%      23%
TOTAL GROUP by equity method             16%      13%      11%      13%      13%
TOTAL GROUP by proportional              15%      13%      10%      11%      12%
 consolidation                                                                  



Key financial data of the segments 9 months 2011-2015

(EUR thousand)                      Sales                       Sales           
                         9 months  9 months  Change  9 months        9  9 months
                             2015      2014     %        2013   months      2011
                                                                  2012          
media segment  (by         21 663    19 923      9%    18 225   18 513    17 240
 equity method)                                                                 
incl. revenue from all     10 986     9 434     16%     8 206    7 532     6 495
 digital and online                                                             
 channels                                                                       
printing services          18 457    20 868    -12%    19 896   21 121    19 593
 segment                                                                        
entertainment segment         517         0       -         0        0         0
corporate functions         1 394     1 271     10%     1 137      688       138
intersegment              (4 068)   (3 725)     -9%   (3 462)  (3 197)   (1 939)
 eliminations                                                                   
TOTAL GROUP by equity      37 962    38 338     -1%    35 796   37 125    35 032
 method                                                                         
media segment by           28 899    26 788      8%    24 912   25 241    23 741
 proportional                                                                   
 consolidation                                                                  
incl. revenue from all     11 745    10 050     17%     8 643    7 963     6 900
 digital and online                                                             
 channels                                                                       
printing services          18 457    20 868    -12%    19 896   21 121    19 593
 segment                                                                        
entertainment segment         517         0       -         0        0         0
corporate functions         1 394     1 271     10%     1 137      688       138
intersegment              (4 921)   (4 321)           (4 044)  (3 790)   (2 394)
 eliminations                                                                   
TOTAL GROUP by             44 346    44 606     -1%    41 901   43 260    41 078
 proportional                                                                   
 consolidation                                                                  



(EUR thousand)                     EBITDA                       EBITDA          
                         9 months  9 months  Change  9 months        9  9 months
                             2015      2014     %        2013   months      2011
                                                                  2012          
media segment by equity     2 425     1 922     26%     1 109    1 478       814
 method                                                                         
media segment by            3 334     2 565     30%     1 579    1 785     1 225
 proportional                                                                   
 consolidation                                                                  
printing services           3 611     4 321    -16%     4 258    4 402     4 464
 segment                                                                        
entertainment segment     (1 106)         0       -         0        0         0
corporate functions         (689)     (763)     10%     (593)    (555)     (712)
intersegment                    0         0    -69%         2        2        11
 eliminations                                                                   
TOTAL GROUP by equity       4 240     5 481    -23%     4 777    5 328     4 577
 method                                                                         
TOTAL GROUP by              5 148     6 124    -16%     5 246    5 634     4 988
 proportional                                                                   
 consolidation                                                                  



EBITDA margin                9 months   9 months   9 months  9 months   9 months
                                 2015       2014       2013      2012       2011
media segment  by equity          11%        10%         6%        8%         5%
 method                                                                         
media segment  by                 12%        10%         6%        7%         5%
 proportional                                                                   
 consolidation                                                                  
printing services segment         20%        21%        21%       21%        23%
TOTAL GROUP by equity             11%        14%        13%       14%        13%
 method                                                                         
TOTAL GROUP by                    12%        14%        13%       13%        12%
 proportional                                                                   
 consolidation                                                                  



MEDIA SEGMENT

The media segment includes Delfi operations in Estonia, Latvia and Lithuania,
publisher of Maaleht, Eesti Ekspress and Eesti Päevaleht, book publisher in
Estonia, magazine publisher 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 AS Express Post engaged in home
deliveries. 

The companies’ EBITDA is currently 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 the actual management
structure in a better way as it has changed over the years because of financial
considerations. 

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



Classified portals owned by the Group

Owner            Portal       Owner              Portal             
Delfi Lithuania  www.alio.lt  AS Eesti Ajalehed  www.ej.ee          
                                                 www.ekspressauto.ee



(EUR thousand)                                                Sales          
                                                   Q3 2015  Q3 2014  Change %
Ekspress Meedia AS (Delfi Eesti + Eesti Ajalehed)    4 373    3 576       22%
Delfi Latvia                                           678      635        7%
Delfi Lithuania (incl. Ekspress Leidyba)             1 941    1 768       10%
incl. Delfi Lithuania online revenue                 1 377    1 135       21%
OÜ Hea Lugu                                            106       99        7%
OÜ Zave Media                                            3        0         -
Other companies (Delfi Holding)                          -        -         -
Intersegment eliminations                              (2)     (61)       96%
TOTAL subsidiaries                                   7 098    6 017       18%
AS SL Õhtuleht*                                      1 001      923        8%
AS Ajakirjade Kirjastus*                             1 024      939        9%
AS Express Post*                                       564      569       -1%
Intersegment eliminations                            (256)    (246)       -4%
TOTAL joint ventures                                 2 333    2 185        7%
TOTAL segment by proportional consolidation          9 432    8 202       15%



(EUR thousand)                                               EBITDA          
                                                   Q3 2015  Q3 2014  Change %
Ekspress Meedia AS (Delfi Eesti + Eesti Ajalehed)      613      113      442%
Delfi Latvia                                            33       43      -23%
Delfi Lithuania (incl. Ekspress Leidyba)               311      175       78%
incl. Delfi Lithuania online revenue                                         
OÜ Hea Lugu                                            (5)      (5)        0%
OÜ Zave Media                                         (60)        0         -
Other companies (Delfi Holding)                        (2)      (3)       33%
Intersegment eliminations                              (1)        0         -
TOTAL subsidiaries                                     889      323      175%
AS SL Õhtuleht*                                        111      115       -4%
AS Ajakirjade Kirjastus*                               107       55       93%
AS Express Post*                                        36       75      -51%
Intersegment eliminations                              (0)      (1)      100%
TOTAL joint ventures                                   254      244        4%
TOTAL segment by proportional consolidation          1 143      567      101%

*Proportional share of joint ventures



(EUR thousand)                                             Sales                
                                                9 months      9 months  Change %
                                                    2015          2014          
Ekspress Meedia AS (Delfi Eesti + Eesti           13 491        11 985       13%
 Ajalehed)                                                                      
Delfi Latvia                                       2 139         1 776       20%
Delfi Lithuania (incl. Ekspress Leidyba)           5 816         5 797        0%
incl. Delfi Lithuania online revenue               4 164         3 878        7%
Delfi Ukraine                                          0             2     -100%
OÜ Hea Lugu                                          347           590      -41%
OÜ Zave Media                                          3             0         -
Other companies (Delfi Holding)                        -             -         -
Intersegment eliminations                          (133)         (227)       41%
TOTAL subsidiaries                                21 663        19 923        9%
AS SL Õhtuleht*                                    3 089         2 887        7%
AS Ajakirjade Kirjastus*                           3 130         3 019        4%
AS Express Post*                                   1 828         1 761        4%
Intersegment eliminations                          (810)         (801)       -1%
TOTAL joint ventures                               7 237         6 865        5%
TOTAL segment by proportional                     28 899        26 788        8%
 consolidation                                                                  



(EUR thousand)                                             EBITDA               
                                                9 months      9 months  Change %
                                                    2015          2014          
Ekspress Meedia AS (Delfi Eesti + Eesti            1 474           872       69%
 Ajalehed)                                                                      
Delfi Latvia                                         144            61      136%
Delfi Lithuania (incl. Ekspress Leidyba)             867           973      -11%
incl. Delfi Lithuania online revenue                                            
Delfi Ukraine                                          0          (51)      100%
OÜ Hea Lugu                                            6            71      -92%
OÜ Zave Media                                       (60)             0         -
Other companies (Delfi Holding)                      (5)           (7)       29%
Intersegment eliminations                            (1)             3         -
TOTAL subsidiaries                                 2 425         1 922       26%
AS SL Õhtuleht*                                      396           229       73%
AS Ajakirjade Kirjastus*                             306           153      100%
AS Express Post*                                     206           258      -20%
Intersegment eliminations                            (0)             2     -100%
TOTAL joint ventures                                 908           643       41%
TOTAL segment by proportional                      3 334         2 565       30%
 consolidation                                                                  

*Proportional share of joint ventures



Delfi Estonia

·        New topical portals www.maitsed.ee and Russian-language travel portal
www.turist.ee were launched. 

·        A new Delfi mobile application for IOS devices was finished for beta
testing. 

·        A new mobile comments' section in m.delfi.

·        New layout for Eesti Ekspress website and digital newspaper.

·        A new article view in almost all channels.

·        Deployment of HTML5 animated technology for displaying advertising
banners. 

·        Special projects and categories for covering the Opinion Festival,
Weekend Festival, European Basketball Championships, Eurobasket, European
Volleyball Championships and Rally Estonia. 



Estonian online readership 2014-2015

In the third quarter 2015, Delfi remains the largest online portal in Estonia.
There have been no significant changes in the competition of online websites.
The number of mobile users of Delfi continues to increase. This in turn is
boosting the total number of online users and is creating a situation where the
share of content consumed by mobile devices grows. Readership has recovered
from the summer downturn and the third quarter included a week with the largest
readership of all times. 



Delfi Latvia

·        Several new topical portals were launched: Russian-language hobby
vertical www.zhurnal.lv, gardening portal www.mansdarzs.lv, home design portal
www.manamaja.lv. In total, Delfi Latvia now operates sixteen different topical
portals. 

·        A new e-commerce platform offering booking opportunities of beauty
services www.tobook.lv was launched. 

·        The focus remains on longer production of original content and further
development of Delfi TV video platform. 

·        In the 3rd quarter, several improvements were made in technology. One
important step was deployment of HTML5 animated technology for displaying
advertising banners. 

·        A new self-service system for e-commerce customers was launched that
enables to reach direct customers faster and better. 

·        Media partner of several concert tours, teams and events.

·        In September, advertising agency DDB named Delfi as “The most
influential Latvian media brand in social networks”. 



Latvian online readership 2014-2015

In the third quarter 2015, the readership of the three largest portals has been
relatively stable, without significant changes. Inbox.lv remains the largest
online portal in Latvia and Delfi.lv is the largest news portal in Latvia. One
change on the media market was the transaction where UP Invest OÜ acquired
Latvia’s largest news agency LETA. 

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. 



Delfi Lithuania

·        In connection with the European Basketball Championship, a new portal
for basketball fans www.krepsinis.lt was launched with the objective of
becoming Lithuania’s largest top-quality basketball portal. 

·        A new more modern and user-friendly mobile application for IOS users
was launched. The Android version is expected to be launched in December. 

·        The editorial department launched a new exclusive media project “the
most influentials of Lithuania“. 



Lithuanian online readership 2014-2015

Delfi.lt remains Lithuania’s largest online portal. In the 3rd 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 that had several online portals and merged it with
tv3.lt. Tv3.lt together with alfa.lt were the only ones, whose number of
readers increased in September. Among other portals there is no major changes
in readership numbers. 



Print media in Estonia

Estonian newspaper circulation 2014-2015



Circulations of Estonian newspapers are falling moderately in the long run. The
circulation of daily newspapers is falling faster than that of weekly
newspapers. In 3rd quarter 2015 there have been new significant developments on
the market – circulations of Õhtuleht and Postimees are now on the same level.
Maaleht has continued to increase its circulation in a stable manner. One also
needs to add to these figures the number of subscribers of digital newspapers
which totalled more than 13 thousand for both Eesti Ekspress and Eesti
Päevaleht, as of the end of the 3rd quarter 2015. 

                                        

Estonian newspaper readership 2014-2015

As with regard to the circulations of newspapers, also the readership of
publications has remained relatively stable, but in the long run 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 is approximately 13 thousand
for Eesti Päevaleht and Eesti Ekspress and over 9 thousand for Maaleht.
Therefore, the main task of the periodicals of the group in the next few years
is to increase the readership of digital newspapers. There have been no
significant changes in the competition situation in readership in the 3rd
quarter 2015. 

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          
                Q3 2015  Q3 2014  Change %
AS Printall       5 753    6 596      -13%



(EUR thousand)            EBITDA          
                Q3 2015  Q3 2014  Change %
AS Printall       1 178    1 326      -11%



(EUR thousand)                   Sales                
                9 months 2015  9 months 2014  Change %
AS Printall            18 457         20 868      -12%



(EUR thousand)                  EBITDA                
                9 months 2015  9 months 2014  Change %
AS Printall             3 611          4 321      -16%



Sanctions against Russia and the related decrease in orders and price pressure
in Scandinavia continued also in the 3rd quarter, resulting in the decrease of
sales revenue and EBITDA as in the first half of the year. Due to changes in
the political landscape there have been changes in the structure of export
markets where the share of Russia continues to decrease. The increase of the
share of 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 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)                   30.09.2015  31.12.2014
ASSETS                                                 
Current assets                                         
Cash and cash equivalents             2 633       3 656
Term deposit                              7          19
Trade and other receivables           6 439       6 519
Corporate income tax prepayment         112          37
Inventories                           2 097       2 072
Total current assets                 11 288      12 303
Non-current assets                                     
Term deposit                              0       1 600
Trade and other receivables           1 152       1 170
Deferred tax asset                       65          65
Investments in joint ventures           811         500
Investments in associates               191         164
Property, plant and equipment        14 154      14 506
Intangible assets                    45 883      46 287
Total non-current assets             62 256      64 292
TOTAL ASSETS                         73 544      76 595
LIABILITIES                                            
Current liabilities                                    
Borrowings                            2 251       5 213
Trade and other payables              6 959       6 249
Corporate income tax payable            109          19
Total current liabilities             9 319      11 481
Non-current liabilities                                
Long-term borrowings                 15 994      17 939
Total non-current liabilities        15 994      17 939
TOTAL LIABILITIES                    25 313      29 420
EQUITY                                                 
Share capital                        17 878      17 878
Share premium                        14 277      14 277
Treasury shares                       (166)        (64)
Reserves                              1 794       1 440
Retained earnings                    14 448      13 644
TOTAL EQUITY                         48 231      47 175
TOTAL LIABILITIES AND EQUITY         73 544      76 595

Consolidated statement of comprehensive income (unaudited)

(EUR thousand)                                    Q3      Q3  9 months  9 months
                                                2015    2014      2015      2014
Sales revenue                                 12 105  11 841    37 962    38 338
Cost of sales                                     (9      (9  (30 660)  (29 906)
                                                315)    545)                    
Gross profit                                   2 790   2 296     7 302     8 432
Other income                                     132     116       378       338
Marketing expenses                             (502)   (446)   (1 634)   (1 411)
Administrative expenses                           (1      (1   (3 764)   (3 943)
                                                161)    164)                    
Other expenses                                  (29)    (19)      (80)     (103)
Gain from change in joint ventures                 0     955         0       955
Operating profit                               1 230   1 738     2 202     4 268
Interest income                                   11       2        32         5
Interest expense                               (140)   (175)     (425)     (531)
Foreign exchange gains/(losses)                  (1)       0       (4)        35
Other finance costs                             (26)    (15)      (57)      (48)
Total finance income/costs                     (156)   (188)     (454)     (539)
Profit on shares of joint ventures               170      87       589       375
Profit (loss) on shares of associates              5     (7)        14      (16)
Profit before income tax                       1 249   1 630     2 351     4 088
Income tax expense                              (39)    (17)     (104)     (114)
Net profit  for the reporting period           1 210   1 613     2 247     3 974
Net profit for the reporting period                                             
 attributable to:                                                               
Equity holders of the parent company           1 210   1 613     2 247     3 974
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)         0       0         0      (34)
Comprehensive income (expense) for the         1 210   1 613     2 247     3 940
 reporting period                                                               
Attributable to equity holders of the parent   1 210   1 613     2 247     3 940
 company                                                                        
Basic and diluted earnings per share            0.04    0.05      0.08      0.13

Consolidated cash flow statement (unaudited)

(EUR thousand)                                             9 months     9 months
                                                               2015         2014
Cash flows from operating activities                                            
Operating profit for the reporting year                       2 202        4 268
Adjustments for:                                                                
Depreciation, amortisation and impairment                     2 038        2 168
Gain from change in holdings in joint ventures                    0        (955)
(Gain)/loss on sale and write-down of property, plant           (3)          (8)
 and equipment                                                                  
Change in value of share option                                  98          102
Cash flows from operating activities:                                           
Trade and other receivables                                     (7)          603
Inventories                                                    (25)          201
Trade and other payables                                      (434)      (2 600)
Cash generated from operations                                3 869        3 779
Income tax paid                                               (110)        (150)
Interest paid                                                 (425)        (531)
Net cash generated from operating activities                  3 334        3 098
Cash flows from investing activities                                            
Term deposit (placement)/release                              1 600      (1 600)
Purchase of other investments                                  (50)            0
Proceeds from restructuring of holdings in joint                  0          820
 ventures                                                                       
Investments in joint ventures                                     0          (3)
Purchase of associates                                            0         (80)
Interest received                                                32            5
Purchase of  property, plant and equipment                  (1 429)      (1 107)
Proceeds from sale of property, plant and equipment             147           11
Loans granted                                                     0         (22)
Loan repayments received                                         74            4
Net cash used in investing activities                           374      (1 972)
Cash flows from financing activities                                            
Dividends received from joint ventures                          278          203
Finance lease repayments                                       (62)         (56)
Change in use of overdraft                                  (1 117)          228
Loan received                                                   687            0
Repayments of bank loans                                    (4 414)      (2 758)
Purchase of treasury shares                                   (103)         (44)
Net cash used in financing activities                       (4 731)      (2 427)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS        (1 023)      (1 301)
Cash and cash equivalents at the beginning of the year        3 656        2 111
Cash and cash equivalents at the end of the year              2 633          810






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