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AS Ekspress Grupp: Consolidated unaudited interim report for the Third Quarter and Nine Months of 2022

Teade

In  the 3(rd) quarter  of 2022, the  consolidated revenue  of AS  Ekspress Grupp
totalled  EUR 15.1 million  and the  net profit  totalled EUR  0.86 million. The
total  revenue for the first nine months reached EUR 45.0 million, increasing by
20% year-over-year.  The net profit for the first nine months totalled EUR 1.62
million, decreasing by EUR 0.2 million as compared to last year. Digital revenue
increased  by 25% as compared to  the same period last  year and digital revenue
contributed 77% to the Group's total revenue at the end of September.

The  Group's revenue for the 3(rd) quarter continued its growth as expected. The
consolidated  revenue for  the quarter  totalled EUR  15.1 million (Q3 2021: EUR
13.3 million),  increasing by 14% as  compared to last  year. The Group's online
advertising  sales continued to grow  at the time when  the total market did not
significantly  grow. The Group's media companies managed to successfully grow at
the  expense  of  their  competitors,  providing  the  best  solutions  to their
advertising  customers in reaching  consumers. Ad buyers  direct an increasingly
larger  share  of  their  marketing  budget  into  online channels, ensuring the
sustainability  of the Group's key type  of revenue. Nine-month revenue totalled
EUR  45.0 million, increasing  by 20% as  compared to  last year. In addition to
advertising  sales, better nine-month  performance was attributable  to a higher
number  of digital  subscriptions and  the growth  in the  average price of both
paper and digital products.

The number of the digital subscriptions of AS Ekspress Grupp increased by 21% by
the  end of  September as  compared to  the same  period last  year and totalled
151.4 thousand  subscriptions. The  number of  digital subscriptions of Õhtuleht
increased  the  most,  indicating  that  the  customer groups that until now had
preferred  print  periodicals  are  also  more  willing to consumer more digital
media.  In percentage terms, the number  of digital subscribers demonstrated the
highest  growth  in  Lithuania  and  Latvia  where the transition to the digital
subscription  model  started  later  than  in  Estonia  and  where  the Group is
expecting to see further growth potential in the near future.

The  earnings before  interest, tax,  depreciation and  amortisation (EBITDA) of
Ekspress  Grupp  totalled  EUR  2.26 million  in  the 3(rd) quarter and EUR 5.1
million in the first nine months. EBITDA grew by 1% both in the 3(rd) quarter as
well  as in the first nine months as compared to last year. Due to the growth in
input  prices (primarily paper,  printing and energy  costs) and the pressure of
the  overall economic  environment on  wages, the  Group's EBITDA margin for the
first  nine months fell from 13% to 11%. The  Group is aware of the higher risks
related  to the weakening of the economic environment and the potential economic
cooldown  over the next 12 months. We have  already reduced our cost base in the
areas  where revenue has  not met the  Group's expectations. The  effect of cost
reductions will be evident in the next quarters. In addition, we are looking for
opportunities  in the new economic environment  for more efficient management of
processes and increasing sales revenue.

In the 3(rd) quarter of 2022, the consolidated revenue totalled EUR 0.86 million
and  the net profit for the first  nine months totalled EUR 1.62 million. In the
first  nine  months,  the  net  profit  decreased  by  EUR 0.2 million (-11%) as
compared to the previous year. Lower profit was attributable to higher losses of
AS  Express Post that is engaged in home  delivery of print media and the growth
in the depreciation charge due to higher capital expenditures as compared to the
same period last year.

The  Management Board of Ekspress Grupp considers the Group's 9-month results as
positive: the Group was able to grow the digital revenue base (both the turnover
and  share of digital revenues as well as the number of digital subscribers) and
maintain  good profitability despite  the unstable business  environment and the
increase  in input prices and salary expenses. This shows that over the last two
years,  Ekspress Grupp has been able to adapt quickly and efficiently to changed
business  environment,  but  contradictory  future  forecasts  require  to  stay
flexible and react quickly also in the upcoming quarters.


Q3 AND 9 MONTHS RESULTS

REVENUE

In the 3(rd) quarter of 2022, the consolidated revenue totalled EUR 15.1 million
(Q3 2021: EUR 13.3 million). The revenue for the 3(rd) quarter increased by 14%
year-over-year. The consolidated revenue for the first 9 months of 2022 totalled
EUR 45.0 million (9 months 2021: EUR 37.6 million). The revenue for the first 9
months  increased by  20% year-over-year. This  growth was  attributable to both
online  advertising revenue as well as  digital subscriptions revenue. The share
of the Group's digital revenue in total revenue was 77% at the end of the 3(rd)
quarter  of 2022 (at the  end of the  3(rd) quarter 2021: 74% of total revenue).
Digital  revenue for the first 9 months  of 2022 increased by 25% as compared to
the same period last year.

PROFITABILITY

In  the 3(rd) quarter of 2022, the consolidated EBITDA totalled EUR 2.26 million
(Q3  2021: EUR 2.25 million). In the  3(rd) quarter of 2022, EBITDA increased by
1% as  compared  to  the  previous  year  and  the  EBITDA  margin  was  15% (Q3
2021: 17%). The  consolidated EBITDA for the first 9 months of 2022 totalled EUR
5.10 million  (9 months 2021: EUR 5.05 million). In the first 9 months of 2022,
EBITDA  increased by 1% as compared  to the previous year  and the EBITDA margin
was 11% (9 months 2021: 13%).

The  consolidated net  profit for  the 3(rd) quarter  of 2022 totalled EUR 0.86
million  (Q3  2021: EUR  1.15 million).  In  the  3(rd) quarter of 2022, the net
profit  decreased by 25% as compared to  the previous year. The consolidated net
profit for the first 9 months of 2022 totalled EUR 1.62 million (9 months 2021:
EUR  1.82 million). In the  first 9 months of  2022, the net profit decreased by
11% as  compared to the previous year. This  decline is primarily related to the
higher  loss of AS Express  Post for the period  and the increase of the Group's
depreciation  charge due to higher capital  expenditures as compared to the same
period last year.

EXPENSES

In  the first 9 months of  2022, the cost of goods  sold, marketing, and general
and  administrative costs totalled EUR  43.29 million (9 months 2021: EUR 35.56
million). In the first 9 months of the year, operating expenses increased by EUR
7.73 million  (+22%).  Staff  costs  in  the  amount  of EUR 4.39 million (+23%)
increased  the most. The significant  growth in input expenses  is linked to the
outsourcing  of the printing service related to  print media as well as the home
delivery service, the total growth was EUR 0.66 million (+16%).

As  of 30 September 2022, the Group employed  861 employees which is 132 more as
compared  to the same period last  year (30.09.2021: 729 employees). This growth
is  attributable to  56 employees who  were transferred  from OÜ  Geenius Meedia
acquired  at the end of 2021 and the ELTA  news agency acquired in the summer of
2022. 76 employees  were  hired  in  other  companies  in  Estonia,  Latvia  and
Lithuania.  Given the general  economic situation, we  have selectively adjusted
employee salaries in order to retain the best. In addition, we have started with
cost  reductions and layoffs, especially in  Latvia where advertising sales have
failed  to  meet  the  Group's  internal  targets. These activities will have an
impact in the upcoming quarters.

In the first 9 months of the year, the one-off expenditure includes donations to
Ukraine  in the total amount of  EUR 0.20 million (Q3 2022: additional donations
of EUR 0.06 million).

The  war in Ukraine  has had a  major negative effect  on the GDP  growth in the
Baltic  States. As  a result,  the economy  has slowed  down and  created a high
inflation environment (in September 2022, inflation was 24.1% in Estonia, 22.5%
in Lithuania and 22% in Latvia as compared to the previous year) which is one of
the highest in the Eurozone. The Group has neither any operations nor any assets
in Ukraine and Russia, and therefore, the war has only an indirect impact on the
Group.

CASH POSITION

At  the end of the reporting period, the  Group had available cash in the amount
of  EUR 6.1 million and equity  in the amount of  EUR 53.0 million (57% of total
assets).  The comparable data as of  30 September 2021 were EUR 12.4 million and
EUR  54.4 million (61% of total assets), respectively. As of 30 September 2022,
the Group's net debt was EUR 15.8 million (31 December 2021: EUR 11.3 million).

In  the first 9 months of 2022, the Group's cash flows from operating activities
totalled  EUR  3.89 million  (9  months  2021: EUR  4.41 million, incl. printing
services segment) that were positively impacted by the ticket sales platforms in
Estonia  and Latvia. The sales activity of the Latvian ticket sales platform has
recovered and is in a better position due to higher ticket prices as compared to
the pre-Covid-19 period.

In  the first 9 months of 2022, the Group's cash flows from investing activities
totalled EUR -4.76 million (9 months 2021: EUR 4.98 million, incl. the sale of a
discontinued  operation in the  amount of EUR  6.33 million), of which EUR -2.89
million  was  related  to  development  and  acquisition  of property, plant and
equipment  and intangible assets, indicating  higher investments in products and
technologies.  In the first 9 months  of the year, the  Group invested EUR -1.56
million  in new  LED screens,  to be  funded with  a finance  lease in  the last
quarter of 2022.

In  the first 9 months of 2022, the Group's cash flows from financing activities
totalled EUR -4.01 million (9 months 2021: EUR
-3.29  million), of  which EUR  -2.43 million  was the  dividend payment  to the
shareholders  of  AS  Ekspress  Grupp.  Financing  activities also include a net
change in borrowings and principal lease payments, where the changes made to SEB
loan  contracts entered into in summer 2021 had  a positive impact. In the first
9 months  of 2021, treasury  shares were  purchased in  the amount  of EUR 0.45
million.

DIVIDENDS

At  the regular General Meeting of Shareholders  of AS Ekspress Grupp held on 2
May  2022, it was  decided to  pay a  dividend of  8 euro cents per share in the
total  amount of EUR 2.43 million. Dividends were paid to shareholders on 20 May
2022.


Key financial indicators for segments


 (EUR thousand)  Sales

                                                                       12
                                          9 months  9 months           months
                 Q3 2022 Q3 2021 Change % 2022      2021      Change % 2021

 Media segment   14 743  12 925  14%      43 887    36 485    20%      52 093

  incl. revenue
 from all
 digital and
 online channels 12 006  10 061  19%      34 586    27 664    25%      40 453

  % of revenue
 from all
 digital and
 online channels 81%     78%              79%       76%                78%

 Corporate
 functions       1 161   999     16%      3 343     3 106     8%       4 118

 Inter-segment
 eliminations    (784)   (660)            (2 274)   (2 018)            (2 695)

 TOTAL GROUP     15 120  13 265  14%      44 956    37 573    20%      53 516

  % of revenue
 from all
 digital and
 online channels 79%     76%              77%       74%                76%


 (EUR thousand)  EBITDA

                                                                       12
                                          9 months  9 months           months
                 Q3 2022 Q3 2021 Change % 2022      2021      Change % 2021

 Media segment   2 614   2 401   9%       6 007     5 478     10%      8 927

 Corporate
 functions       (311)   (134)   -132%    (802)     (423)     -90%     (669)

 Inter-segment
 eliminations    (39)    (16)             (109)     (3)                (18)

 TOTAL GROUP     2 264   2 251   1%       5 096     5 051     1%       8 240


 EBITDA margin Q3 2022 Q3 2021 9 months 2022 9 months 2021 12 months 2021

 Media segment 18%     19%     14%           15%           17%

 TOTAL GROUP   15%     17%     11%           13%           15%



Consolidated balance sheet (unaudited)

 (EUR thousand)                                           30.09.2022 31.12.2021
-------------------------------------------------------------------------------
 ASSETS
-------------------------------------------------------------------------------
 Current assets
-------------------------------------------------------------------------------
 Cash and cash equivalents                                     6 077     10 962
-------------------------------------------------------------------------------
 Trade and other receivables                                  10 496      9 323
-------------------------------------------------------------------------------
 Corporate income tax prepayment                                 246          2
-------------------------------------------------------------------------------
 Inventories                                                     317        266
-------------------------------------------------------------------------------
 Total current assets                                         17 136     20 553
-------------------------------------------------------------------------------
 Non-current assets
-------------------------------------------------------------------------------
 Other receivables and investments                             1 586      1 671
-------------------------------------------------------------------------------
 Deferred tax asset                                               42         42
-------------------------------------------------------------------------------
 Investments in joint ventures                                   895      1 011
-------------------------------------------------------------------------------
 Investments in associates                                     2 255      2 210
-------------------------------------------------------------------------------
 Property, plant and equipment                                 8 829      7 964
-------------------------------------------------------------------------------
 Intangible assets                                            61 497     60 807
-------------------------------------------------------------------------------
 Total non-current assets                                     75 104     73 705
-------------------------------------------------------------------------------
 TOTAL ASSETS                                                 92 240     94 258
-------------------------------------------------------------------------------
 LIABILITIES
-------------------------------------------------------------------------------
 Current liabilities
-------------------------------------------------------------------------------
 Borrowings                                                    1 865      3 201
-------------------------------------------------------------------------------
 Trade and other payables                                     16 630     17 664
-------------------------------------------------------------------------------
 Corporate income tax payable                                    136         82
-------------------------------------------------------------------------------
 Total current liabilities                                    18 631     20 947
-------------------------------------------------------------------------------
 Non-current liabilities
-------------------------------------------------------------------------------
 Long-term borrowings                                         20 023     19 018
-------------------------------------------------------------------------------
 Other long-term liabilities                                     601        601
-------------------------------------------------------------------------------
 Total non-current liabilities                                20 624     19 619
-------------------------------------------------------------------------------
 TOTAL LIABILITIES                                            39 255     40 566
-------------------------------------------------------------------------------
 EQUITY
-------------------------------------------------------------------------------
 Minority interest                                               141        140
-------------------------------------------------------------------------------
 Capital and reserves attributable to equity holders of
 parent company:
-------------------------------------------------------------------------------
 Share capital                                                18 478     18 478
-------------------------------------------------------------------------------
 Share premium                                                14 277     14 277
-------------------------------------------------------------------------------
 Treasury shares                                               (334)      (384)
-------------------------------------------------------------------------------
 Reserves                                                      2 057      1 920
-------------------------------------------------------------------------------
 Retained earnings                                            18 365     19 261
-------------------------------------------------------------------------------
 Total capital and reserves attributable to equity
 holders of parent company                                    52 843     53 552
-------------------------------------------------------------------------------
 TOTAL EQUITY                                                 52 984     53 692
-------------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                                 92 240     94 258
-------------------------------------------------------------------------------



Consolidated statement of comprehensive income (unaudited)

                                             9 months                 12 months
 (EUR thousand)        Q3 2022   Q3 2021         2022 9 months 2021        2021
-------------------------------------------------------------------------------
 Continuing
 operations
-------------------------------------------------------------------------------
 Sales                  15 120    13 265       44 956        37 573      53 516
-------------------------------------------------------------------------------
 Cost of sales        (11 272)   (9 849)     (34 712)      (28 543)    (39 674)
-------------------------------------------------------------------------------
 Gross profit            3 849     3 415       10 243         9 030      13 842
-------------------------------------------------------------------------------
 Other income              209       291          526           609         929
-------------------------------------------------------------------------------
 Marketing expenses      (695)     (494)      (2 133)       (1 593)     (2 359)
-------------------------------------------------------------------------------
 Administrative
 expenses              (2 125)   (1 799)      (6 442)       (5 422)     (7 435)
-------------------------------------------------------------------------------
 Other expenses           (54)      (13)        (139)          (62)       (113)
-------------------------------------------------------------------------------
 Operating profit
 /(loss)                 1 183     1 401        2 056         2 563       4 864
-------------------------------------------------------------------------------
 Interest income             9         9           28            25          35
-------------------------------------------------------------------------------
 Interest expenses       (183)     (175)        (529)         (537)       (709)
-------------------------------------------------------------------------------
 Other finance
 income/(costs)            (3)      (67)          194          (62)         339
-------------------------------------------------------------------------------
 Net finance cost        (177)     (233)        (308)         (574)       (335)
-------------------------------------------------------------------------------
 Profit/(loss) on
 shares of joint
 ventures                (107)        42        (327)         (128)       (281)
-------------------------------------------------------------------------------
 Profit/(loss) on
 shares of associates       53        16          326            83         161
-------------------------------------------------------------------------------
 Profit /(loss)
 before income tax         953     1 226        1 747         1 944       4 409
-------------------------------------------------------------------------------
 Income tax expense       (94)      (81)        (129)         (120)       (276)
-------------------------------------------------------------------------------
 Net profit /(loss)
 from continuing
 operations                859     1 145        1 618         1 823       4 133
-------------------------------------------------------------------------------
 Net profit /(loss)
 from discontinued
 operation                   0   (2 180)            0       (1 876)     (1 876)
-------------------------------------------------------------------------------
 Net profit /(loss)
 for the reporting
 period                    859   (1 035)        1 618          (53)       2 257
-------------------------------------------------------------------------------
 Net profit /(loss) for the reporting
 period attributable to
-------------------------------------------------------------------------------
 Equity holders of
 the parent company        857   (1 037)        1 617          (57)       2 243
-------------------------------------------------------------------------------
 Minority interest           2         2            1             4          14
-------------------------------------------------------------------------------
 Total comprehensive
 income /(loss)            859   (1 035)        1 618          (53)       2 257
-------------------------------------------------------------------------------
 Comprehensive income /(loss) for the reporting period attributable to
-------------------------------------------------------------------------------
 Equity holders of
 the parent company        857   (1 037)        1 617          (57)       2 243
-------------------------------------------------------------------------------
 Minority interest           2         2            1             4          14
-------------------------------------------------------------------------------
 Earnings per share (euro) - continuing operations
-------------------------------------------------------------------------------
 Basic earnings per
 share                  0.0282    0.0377       0.0533        0.0602      0.1362
-------------------------------------------------------------------------------
 Diluted earnings per
 share                  0.0273    0.0364       0.0515        0.0581      0.1316
-------------------------------------------------------------------------------
 Earnings per share (euro)
-------------------------------------------------------------------------------
 Basic earnings per
 share                  0.0282  (0.0343)       0.0533      (0.0019)      0.0742
-------------------------------------------------------------------------------
 Diluted earnings per
 share                  0.0273  (0.0331)       0.0515      (0.0018)      0.0716
-------------------------------------------------------------------------------


Consolidated cash flow statement (unaudited)

                                                                      12 months
 (EUR thousand)                          9 months 2022 9 months 2021*     2021*
-------------------------------------------------------------------------------
 Cash flows from operating activities
-------------------------------------------------------------------------------
 Operating profit /(loss) for the
 reporting year                                  2 056            709     3 060
-------------------------------------------------------------------------------
 Adjustments for (non-cash):
-------------------------------------------------------------------------------
 Depreciation and amortisation                   3 039          3 349     4 162
-------------------------------------------------------------------------------
 (Gain)/loss on sale, write-down and
 impairment of property, plant and
 equipment                                          30             35      (10)
-------------------------------------------------------------------------------
 Change in value of share option                    27             27        36
-------------------------------------------------------------------------------
 Loss on sale of discontinued operation              0          2 077     2 077
-------------------------------------------------------------------------------
 Cash flows from operating activities:
-------------------------------------------------------------------------------
 Trade and other receivables                   (1 168)        (1 370)   (1 599)
-------------------------------------------------------------------------------
 Inventories                                      (51)           (79)      (33)
-------------------------------------------------------------------------------
 Trade and other payables                          607            337     1 464
-------------------------------------------------------------------------------
 Income tax paid                                 (319)          (272)     (281)
-------------------------------------------------------------------------------
 Interest paid                                   (327)          (405)     (803)
-------------------------------------------------------------------------------
 Net cash generated from operating
 activities                                      3 892          4 409     8 073
-------------------------------------------------------------------------------
 Cash flows from investing activities
-------------------------------------------------------------------------------
 Acquisition of subsidiaries/ associates
 (less cash acquired) and other
 investments /
 cash paid-in equity-accounted investees       (2 600)          (201)   (3 325)
-------------------------------------------------------------------------------
 Disposal of discontinued operation, net
 of cash disposed of                                 0          6 326     6 326
-------------------------------------------------------------------------------
 Receipts of other investments                      10             51        51
-------------------------------------------------------------------------------
 Interest received                                   1              3         3
-------------------------------------------------------------------------------
 Purchase of property, plant and
 equipment and intangible assets               (2 891)        (1 901)   (2 786)
-------------------------------------------------------------------------------
 Proceeds from sale of property, plant
 and equipment and intangible assets                60              3         3
-------------------------------------------------------------------------------
 Loans granted                                    (30)          (130)     (212)
-------------------------------------------------------------------------------
 Loan repayments received                           86              0       156
-------------------------------------------------------------------------------
 Dividends received                                601            828       828
-------------------------------------------------------------------------------
 Net cash used in investing activities         (4 763)          4 978     1 044
-------------------------------------------------------------------------------
 Cash flows from financing activities
-------------------------------------------------------------------------------
 Dividends paid                                (2 425)              0   (3 028)
-------------------------------------------------------------------------------
 Payment of lease liabilities                  (1 305)        (1 389)   (1 814)
-------------------------------------------------------------------------------
 Loans received / Repayments of bank
 loans                                           (284)        (1 455)       864
-------------------------------------------------------------------------------
 Purchases of treasury shares                        0          (446)     (446)
-------------------------------------------------------------------------------
 Net cash used in financing activities         (4 014)        (3 290)   (4 424)
-------------------------------------------------------------------------------
 NET (DECREASE)/INCREASE IN CASH AND
 CASH EQUIVALENTS                              (4 885)          6 096     4 693
-------------------------------------------------------------------------------
 Cash and cash equivalents at the
 beginning of the period                        10 962          6 269     6 269
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end of
 the period                                      6 077         12 364    10 962
-------------------------------------------------------------------------------

*No  adjustments  have  been  made  to  the  consolidated cash flows for 2021 in
accordance  with the  requirements of  IFRS. Cash  flows related to the printing
services segment are still consolidated line-by-line.


Signe Kukin
Group CFO
AS Ekspress Grupp
Telephone: +372 669 8381
E-mail address: [email protected] (mailto:[email protected])

AS Ekspress Grupp is the leading Baltic media group whose key activities include
web media content production, publishing of newspapers, magazines and books. The
Group also operates an electronic ticket sales platform and ticket sales sites
in Estonia and Latvia. Ekspress Grupp that launched its operations in 1989
employs more than 1400 people, owns leading web media portals in the Baltic
States and publishes the most popular daily and weekly newspapers as well as the
majority of the most popular magazines in Estonia.